Ex Africa semper aliquid novi — Out of Africa always something new. ~Pliny the Elder
This week marks my company’s 3rd anniversary of working in Africa within our emerging markets service practice. Helping companies in the region to understand and serve the needs of their customers has been enriching on a personal level. I’ve had the privilege of witnessing the growth of the sub-Sahara’s nascent service industry and I marvel at its favorable impact on a growing number of people in the region.
The ascendant mobile industry illustrates the point. On a continent where few people have landlines due to the high cost of installing cabling, cell phones are bridging the communications gap. In many sub-Saharan markets, like Ghana where we work, mobile growth rates have been approaching 50% annually. While less than 20% have mobile phones now, hundreds of millions of Africans are expected to get handsets in the next few years. Keep in mind that this is a continent of almost a billion people. That’s a lot of potential new subscribers.
I’ve written about how people in emerging markets are using their new cell phones to perform essential functions like transferring money (m-banking). But mobile technology is connecting people in wondrous, new ways every day. Local entrepreneurs are devising inventive means of helping people meet their needs. TradeNet, a company in Ghana, has developed an eBay-like site enabling buyers and sellers of agricultural products to post their needs and offerings using text messaging. MPedigree, another Ghanaian venture, lets consumers check the serial numbers of malaria or other drugs to determine if they are legitimate, a pressing regional concern.
Mobile technology is a “disruptive force” that is quietly but inexorably changing the lives of Africans across all socio-economic strata. The industry employs thousands of workers, improving living standards and slowing the region’s talent drain. A recent London Business School study found that a 10% increase in mobile-phone penetration adds 0.6 percentage points to the economic growth rate. According to Columbia University’s Jeffrey Sachs, “The cell phone is the single most transformative technology for development”. It’s the region’s best hope for bridging the growing digital divide.
Make no mistake: the challenges of building on the early successes are steep. Despite inroads by equipment makers, handsets are still too pricey for people at the bottom of the pyramid who live on less than a couple dollars a day. Governments and companies must work more closely to make low cost handsets available to more people. Telecom firms must invest in tools and practices to meet the growing needs of customers as their markets grow crowded with new competitors. The mobile business is pushing Africa’s service industry forward rapidly.
There is growing uncertainty about how the global economic crisis will affect the region. While developing economies are tanking, analysts believe that regional GDP growth will slow but not recede. And, the region is expected to bounce back sooner than developed nations. While I’m not confident in analysts’ rosy predictions these days, I’d wager that we’ll see growth, albeit below the robust 5% rate the region has enjoyed in recent years.
When it comes to Africa, my rule is to always expect the unexpected. Stability is something that people in the region don’t take for granted. In January, Ghana witnessed a peaceful transfer of power from one political party to another. But memories of coups and tyranny are too recent and too close at hand to take stability for granted.
I genuinely enjoy working and spending time in the West Africa. It stimulates my mind, quells my restlessness and, at times, tries my patience. Often projects take longer to develop than seems reasonable to a Westerner, and it’s imperative to figure that into any timetable. But if you’re wired for adventure, it’s one of the most compelling business destinations on the globe. I’ve had the pleasure of collaborating with some of the sharpest, most resourceful entrepreneurial minds I’ve ever encountered. And, there’s nothing like the thrill of making things happen in a region where doing so has such a profound impact on people’s daily lives. There’s nothing like that.
More on the impact of the mobile industry in Africa from BusinessWeek.