With more than 50 per cent of Africa’s
urban dwellers connected to the Internet, the continent of Africa is
changing. Changing irreversibly.
In Lions go Digital: The Internet’s transformative potential in Africa,
respected global consultancy group McKinsey reveals remarkable findings
of a continent with massive growth potential, and with ICT at the
centre of it all.
By 2025, internet penetration in the
continent will rise from 16 per cent today to more than 50 per cent, or
600 million users. The contribution of internet to GDP will skyrocket
from $18 billion today to $300 billion. E-commerce sales will hit $75
billion and productivity gains will exceed $300 billion.
In
this leapfrog scenario, the report says, increased Internet penetration
and use could propel private consumption almost 13 times higher than
current levels of $12 billion, reaching some $154 billion by 2025.
Above all, Kenya is among the leading nations on internet contribution
to GDP.
In spite of the numbers looking staggering, we
are in for greater things, that is, if we get to work after reading this
piece. When Michael Joseph was being hired back in the year 2000, the
expectations were that by 2005, he would grow the subscriber base to
500,000. Come 2005, mobile subscription had hit 5 million, ten times
more than projected.
Although McKinsey may have
factored such leapfrogs in their estimation, in my considered view,
there is going to be more. The rate at which young people are embracing
ICTs, the sector may easily contribute 30 percent or equivalent to what
agriculture contributes today.
How did we unlock this potential? And what do we need to do to take advantage of the emerging opportunity?
Perplexed
In
early 2006, we held a conference at Safari Park Hotel attended by the
then President Hon. Mwai Kibaki. We were to unveil the demand-side of
broadband that we were pushing to have in Kenya. The President was
supposed to open the conference and leave. He did not leave, but chose
to listen what else we had planned.
Myself and the
then Minister for Communications, Hon. Mutahi Kagwe, were perplexed but
we somehow managed to gather ourselves and presented a few slides of
what we wanted to achieve. There was no Master Plan. A seven-page,
poorly prepared document served as one.
“Your
Excellency, our first objective is to deal with infrastructure, then
second, we want to push for content, innovation and applications” (Here
Hon Kagwe showed me a white sheet of paper on which was written ‘you are
getting too technical for HE’).
“Your Excellency,
for the third objective, we want to leverage on the private sector to
build most of the infrastructure, I mean, use the public private
partnership (PPP) model to build infrastructure”.
As
the President nodded approvingly, I gathered courage to throw in a joke.
“You see, Your Excellency, I am having it really hard to stand here
because we had not planned it this way”. Then he nodded once more and
with his characteristic prose, said “Endelea tu” (just continue) with
laughter from the audience. “Fourthly, we want to build massive human
resource capacity and finally create considerable employment”.
We
had been barely two months in office, but managed to get the President
on our side. A relationship was born that eventually created confidence
in Treasury to give us seed the money to get the PPP on infrastructure
going. The rest, as they say, is history.
In 2009, the
first ever undersea fibre optic cable landed in Mombasa, opening the
floodgate of other cables to land at our sea port. In parallel, we
sought Treasury assistance to lay a 5,000 kilometer terrestrial fibre
optic cable. The problem shifted from infrastructure to content,
innovation and applications.
Erik Hersman had
approached me to provide at least 40 MB broadband to some building on
Ngong Road, ostensibly to precipitate demand. I gave directives that we
give some 20MB to start with.
This did not resonate
well with my team, who leaked my intentions to the media. I was put on
the defensive, and in that position could not fully articulate why I
should give Erik that amount of broadband. The plan had been scuttled
completely, but Erik was not solely dependent on my promises.
He
moved on, but we had made a serious error. We should have supported
the youth to get some space and broadband to share their creativity and
hopefully lead to some innovation. Nevertheless, Kenya today is a
factory of myriad applications.
I stayed in touch with
Erik, often giving fireside chats which were attended by many
developers. These meetings yielded Kenya Open Data, when they
challenged me to get data for them to build new applications. With lots
of convincing, and while creating several enemies, Open Data was
launched once again with President Kibaki.
Some
progress was made on the three policy objectives but not to what we
originally wanted to achieve. We, for example, were not able to finance
the creative economy initiative. This remains an opportunity to create
jobs, but we have not utilized its potential.
A series
of pilot projects on automation show that productivity gains are indeed
possible. Today, mobile money transfer in Kenya is redefining global
financial standards. In agriculture, new applications have helped
farmers create greater efficiencies. More applications are being
developed to improve health care, education as well as government. The
McKinsey report indeed validates some of the gains we have made thus
far.
There is need to read it with a tooth comp and
possibly get them to further elaborate these opportunities. It will be
absurd if only foreigners take advantage of the report, only for us, a
few years down the road, to begin complaining why foreign firms
dominate.
The predictions that McKinsey made in its 2010 report, Lions on the move: The progress and potential of African economies, have come to pass.
The report described a continent in transition, with urbanization and the rise of the middle-class consumer fuelling growth.
Today, following a decade of economic expansion, Africa is going digital, with a middle income larger than that of India.
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