Silicon Savanna: Mobile Phones Transform Africa

Thursday, July 21, 2011

The buzz at Pivot25, a conference for mobile-phone software developers and investors held this June, is all about the future of money. Ben Lyon, the 24-year-old business-development VP of Kopo Kopo, wants $250,000 to produce his app for shops to process payments made by text message. Paul Okwalinga, 28, describes his money app – called M-Shop, it allows you to buy travel tickets and takeout via mobile phone – as “not reinventing the wheel but pimping it.” Kamal Budhabhatti, 35, claims Elma, the latest product from his company Craft Silicon, lets a phone do and be almost anything financial – act like a credit card or an online bank (a “digital wallet,” he says), trade shares or forex, organize a company’s payroll and (incidentally) surf the Web and phone home. Cash suddenly seems very old. The previous week, Joe Mucheru, a senior manager at Google, declared credit cards prehistoric. Adding to the giddy mood is the thought that the inventions on display might make some lucky Pivot25ers gazillionaires. And where are these extraordinary futures being imagined and plotted? The giraffes and zebras grazing in the game park outside rule out Silicon Valley, Seattle and Bangalore. Try Nairobi.

Cell phones have taken all the world forward, but they are positively transforming Africa. Lack of infrastructure – few hospitals, landlines and roads; little power, education or running water; small banks; sparse insurance; tiny stock exchanges – is a large part of what economists mean when they say poverty. And much of Africa is a giant, dark infrastructural void, as anyone who has flown over the continent at night can attest. See pictures of the cell phone’s history.

The arrival of the mobile phone changed that forever. For the first time, hundreds of millions of people found themselves on some sort of grid, one that allowed them to talk to one another and the world. The take-up was astonishing. From almost none a decade ago, there are now half a billion mobile phones in Africa, roughly one for every two Africans, according to industry analyst Informa Telecoms & Media. The economic effect has been just as dramatic. According to studies by the London Business School, the World Bank and consultants at Deloitte, for every 10 additional mobiles per 100 Africans, GDP rises 0.6% to 1.2%. “Mobile tech has the fastest adoption rate of any technology in the world,” said Miguel Granier, founder of Boston-based technology and development fund Invested Development, who was attending Pivot25. “For rapid, catalytic growth, it’s the biggest opportunity there is.”

But this is not a story merely of how technology is changing Africa. Africans are changing technology right back. They now use text-message networks to send e mail, run social networks (South Africa’s MXit) and even verify from a bar code whether a drug is genuine or fake (mPedigree in Ghana and Sproxil in Nigeria). Africa’s influence on global technology is most marked in mobile banking: with its M Pesa service (M for mobile, pesa meaning money in Swahili), Kenyan operator Safaricom became the first-ever telecom company to create a mass mobile-banking service, setting industry standards now being copied from California to Kabul.

Source: Time (link opens in a new window)