NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, June 11, 2015

A decade on from the Gleneagles Summit, Africa is undergoing a remarkable transformation. Standards of living are increasing, the middle class is set to double in the next ten years and a continent that was then a scar on the conscience of the world is now the most exciting. Africa’s challenges are still better known than its prospects; but with a digital revolution in full-swing and data revolution underway, African nations have a chance to leapfrog stages of development.

In the early 90s, average growth in sub-Saharan Africa was around -2%. Nearly two-thirds of external finance came from aid, while exports were just $700 million. Today, 10 of the 15 fastest growing economies are in Africa, with countries such as Kenya, Rwanda and Ghana growing by 6%-8% a year, exports are more than $150 billion and aid makes up around a fifth of external finance.

There has also been an explosion in the growth of digital technologies. There are now 650 million mobile phone subscribers on the continent – a more than 40-fold increase since 2000. In countries such as Nigeria, mobile phone ownership among adults is the same as it is in the US. This growth far exceeds growth in access to basic services. But mobile technology is now simply universal personal technology – and it has the potential to revolutionise the delivery of services in Africa, both in the private and public sector.

This change is profound – and it is already happening. The mobile money service, M-Pesa, dramatically altered payments for goods and services in Kenya, ending queues to pay for utilities in an instant and turning the cash economy upside down. It was an innovation that had clear and immediate application for public services. Similarly mobile health services, mHealth, has the potential to radically improve health outcomes in Africa, through simple uses such as reminding patients to attend appointments or to disseminate public messaging such as those during the Ebola outbreak.

Through tapping into the world marketplace of ideas and applying existing technology to build new systems of delivery, African nations have the potential to skip traditional stages of development. But those who succeed today will not only need to continually source new ideas irrespective of where they originate, but also create new knowledge.