The African tech scramble originally posted in 2014 via Medium.
History repeats itself. The “Scramble and Partition” of Africa is here, again. Naturally, many people might disagree with this but get through this and you might feel a little different.
Firstly, what was the Scramble and Partition for Africa?
Without going into too much detail, this begun at the famous Berlin Conference (1884) in which the powers of Europe met to discuss the splitting of Africa into states for financial benefit (majorly). Africa was split into countries with powers like England taking huge chunks in the East, France took up majorly the West and Central Africa. Other countries that took part include Belgium, Germany, Portugal etc. I’m not discussing whether any of this matters today, all i know is it happened, period.
Today a new wave of the Scramble exists, the race for tech dominance in Africa. Why? As compared to what happened in the 1900s, it is not powerful countries scrambling and rumbling, it is powerful corporations like Rocket Internet & Millicom doing it all.
I have a LoveHate relationship with the corporations that are participating this new age scramble. I say LoveHate because on one hand, I totally love what they are doing and on the other I totally hate it. Rocket Internet with Millicom and MTN (an African business) have setup the African Internet Holding Group (AIH).
Love
These corporations have gone on to setup several establishments/businesses and e-commerce stores in Africa. With more businesses being setup, African economies are benefiting in the form of tax revenue, job employment and an increased confidence in the tech scene of Africa as a whole.
I don’t have stats or anything to show how much governments are earning in the form of tax or jobs that are availed to Africans as a result but one thing that is evident is that the tech arena in Africa is attracting more crowds. Companies like Evernote have recently moved into Africa in hopes of finding “greener pastures” so too speak.
AIH has managed to setup multiple platforms (71 businesses to be exact) and this has given Africans a belief that they can contribute to the tech scene. Africans now believe they can use that IT degree to create a startup as opposed to sticking with the corporate environment.
Another barrier that AIH has managed to tackle, is the trust issue electronic commerce companies face. I believe the more e-commerce companies that setup, the quicker that stigma will fade and Africa will grow to a digital era.
Credit to AIH for taking down these barriers but...
Hate
Unlike companies like Microsoft, IBM, Thoughtworks and so on that have setup permanent residence in Africa and pushing innovation to another level, AIH is purely here to make money.
I don’t like that because they are operating in a purely “Capitalist mindset” (which they have every right to). But Africa is known for its struggles and it would be more beneficial to spend time and resources on carrying out research, educating and training Africans. These programmes create relationships and go further than setting up flags or establishing territories/zones in the areas with great potential and high maturity like Nigeria and South Africa where they are dominant. They are scrambling to be the first into the market.
AIH is also using models that have worked elsewhere and applying them to the African market which is not a bad strategy as it has proved to work in some markets (they have had some wins and losses). My issue here is, they are not contributing anything fresh or new to the tech community. There is no innovation, no creativity, all of which is essential and is what Africa needs in order to prosper in the digital era.
AIH was founded 2yrs ago (2012), it is currently operating in 23 countries and has created 71 companies. Clearly, the group has its finances in check. Just this week, Rocket announced two investments within a week, $445m investment from Philippines Long Distance Telephone(PLDT) and $582m from United Internet. This values the company at $5.6bn pre-IPO (cha-ching).
However, this cripples an individual’s ability/belief to create a startup from ground up knowing that Goliath is right around the corner and can practically setup over night. It almost feels like a scramble all over again.
Moving On
I hope that in the future, AIHcan do more than just validate the African tech market but push the envelope into really educating Africans and actually innovating which they are more than capable of doing.
An African entrepreneur and techie, Jason Njoku, wrote this article which explains a few things I have been talking about from a different perspective.
Africa needs more Davids to rise to the occasion and not be afraid to setup their ideas whether or not they are in direct competition with AIH or another giants for that matter.
So are you a David? If so, l’d love to learn from you. Cheers