What east Africa needs to become truly an IT hubFollow @MadeItInAfrica
East Africa has made great strides in technology. Last year Time magazine dubbed Kenya ‘Silicon Savanna’ due to the country’s ICT revolution. However, the region’s ICT sector still faces numerous challenges.
John Kieti, manager of m:lab East Africa, a mobile innovation and entrepreneurship development facility, points at internet connectivity as one of the major challenges in the region.
“Infrastructure is still not even across the countries. The density of connectivity points in Kenya, for instance, is much more in Nairobi than in other towns across the country. If we assume that Nairobi is the infrastructure centre, we might as well say that Nairobi is the hub, not the country or the region,” notes Kieti.
“We are still faced with … challenges like limited mobile coverage especially in the rural areas, which has also led to poor internet connectivity. Mobile operators are always seeking a win-win market situation, therefore they would rather invest in areas which make profitable sense,” says Bas Hoefman, founder of Text to Change, an organisation that uses SMS to challenge mobile phone users on their knowledge of personal health.
The gap between the technology innovators and investors, Kieti adds, is a big challenge. He reckons that entrepreneurs at some point give up for lack of access to finance and opt to go for employment where innovation might be stifled. He warns that this could slow down the region’s prospects of becoming an ICT hub.
“East Africa cannot become an ICT hub just because Microsoft, Intel and other tech multinationals have set base here. That way we will always become lesser than the hub they come from. We need to build companies that can originate from here. That way we would have all the intellectual property assets, competitive advantage and grow outwardly to other continents,” says Kieti.
The region needs to begin exporting services and not just be a consumer of innovations from elsewhere. This, Kieti argues, cannot be achieved without the infusion of capital in the technology sector.
Technology entrepreneur Jeremy Gordon concurs, adding that foreign investors coming into the region are risk averse and most entrepreneurs’ efforts are frustrated by the difficulty in accessing financing.
While foreign investors have shown a lot of interest in technology in the region, financing from local investors has not been that forthcoming. “Local investors need to begin investing beyond traditional markets like real estate and look at technology as a serious investment. They can make good return on investments in technology,” says Kieti.
The region is also lacking in human capital, especially in areas like project management. According to Michael Pedersen, managing director of Uhasibu, a web and mobile cloud based accounting system for SMEs, east Africa is very young in the IT space and therefore knowledge is limited.
“It is one thing to have a great product and another thing to brand and market it and achieve international uptake. There are solutions that are already working at a small scale but what will happen when we convince the bigger global market to take up these products and the demand is higher? We don’t seem to have enough capacity to scale up,” says Kieti.
Hoefman adds that the region is characterised by too many ICT pilots of which most have not materialised to ongoing impact generating programmes.
A lot of technologies in the region are targeted towards small markets. Kieti argues that the region needs to plan for when the market will become bigger and start serving millions as opposed to hundreds of thousands.