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Africa’s digital boom rises to the challenge | Analyst Picks| RiskMap 2021

Africa

Africa’s digital boom rises to the challenge 

Barnaby Fletcher | Associate Director

While “African tech” has been a buzzword for a few years now, the COVID-19 pandemic may prove the sector is more than just hype in 2021. Contact tracing apps, health advice and self-assessment tools will continue to be developed to work through platforms such as WhatsApp. E-commerce platforms that became more popular as lockdowns limited access to physical retail will remain, as will digital solutions – such as farm-to-consumer platforms – designed to overcome border closures and other supply-chain disruptions caused by COVID-19 restrictions. 

The growth African tech has seen in the past few years has been remarkable, driven by a similarly remarkable growth in African connectivity. The huge increases in mobile phone and internet penetration, social media use and data traffic has facilitated the emergence of tech solutions in everything from agriculture to education. But there have also been high-profile failures and suspicions that some start-ups are seeking to benefit from the excitement by simply replicating successes elsewhere in African markets, without fully understanding the unique landscapes in which they are now operating. 

The key lesson of the industry’s development so far is that Africa technology is not driven by the Silicon Valley creed of disruption but by the need to solve the challenges still present in so many African markets. High-tech concepts are not always appropriate to solve low-tech problems. Mobile money, arguably Africa’s most successful tech innovation, is the prime example: it addressed a clear problem in Africa’s lack of formal financial inclusion and ensured its widespread adoption by being built around SMS services rather than requiring a smartphone. 

COVID-19 has highlighted and exacerbated these challenges. But this is not a temporary boost to the sector. Many of the projects currently being developed to address the problems of the pandemic have potential application well beyond its end. Digital healthcare solutions designed to reach as many people as possible have clear post-pandemic use in a region where access to modern healthcare facilities is severely limited, and such efforts should enjoy government support; 41 African governments already have digital healthcare strategies in place. Digitalisation of agriculture and supply chains designed to cope with pandemic-caused shortages have clear longer-term benefits for a sector that accounts for around two-thirds of the continent’s employment. 

Despite all the opportunity, companies should be aware that the increases in connectivity that underpin the sector come with their own risks. As digital solutions play an ever-growing role in an increasing number of sectors the potential for cybercrime – already an often-under-estimated risk in Africa – becomes more prevalent. And influence operations, the spread of disinformation, or inflammatory content by malicious actors, can pose serious reputational risks to companies caught unaware. 

 

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