Posts Tagged ‘africa’

Tips on managing African fake news articles and websites

Today, I was faced with the challenge of having to choose between two conflicting quotes attributed to the same spokesperson, during the same press conference. Attempting to uncover an authoritative source for the content in order to discern which of the two was authentic led me down a rabbit hole of fake news sites allegedly from Kenya. The exercise led me to write up my experience, and share my thoughts on navigating the minefield of fake news articles and entire websites, now that the issue has taken over African content as well.

The subject matter concerned China’s alleged takeover of Kenya’s Mombasa Port in case of default on the infrastructure loans for the Standard Gauge Railway (SGR). This has been making the headlines, together with Zambia’s purported problem with seized infrastructure. Matters came to a head today as yet another report – this time by the reasonably credible ZeroHedge – repeated the same messaging without digging further to check whether any of the anti-China allegations were, in fact, true.

At the same time, the daily news curation was churning up reports of a Chinese government spokesperson refuting the allegations that China was poised to take over the Port of Mombasa. So I went digging for more on the topic and churned up a news website that named the very same spokesperson as stating something outrageously unbelievable.

Note: All the sites linked below on How to spot fake from true have been vetted by me by reading through their advice, and their credentials. Someone has to watch the watchers!

Standard tips on distinguishing fake news from genuine tend to highlight two main points:

1. Is the article so outrageous that it makes you blind with anger? If so, it is very likely fake.

2. And, if so, check the website’s About page* to assess its credibility. This was the result when I followed through on the outrageous:

Sure looks like a credible source to me, no? Once I was able to identify the fake news website, I went looking for more authoritative sources to establish the credibility of the Chinese refutations, in case they, too, turned out to be faked.

An Embassy of China page offered the first data point that the refutations were indeed official, and later, on Twitter, Anzetse Were, linked directly to the Chinese Ministry of Foreign Affairs website, doubly ensuring that the refutations to the allegations of China’s take over were official and authentic.

Therefore, we can now state with confidence that China is NOT taking over the Port of Mombasa in case of default on the SGR loan*. And, we discover that the other African story used to support this one, that of Zambia’s ZESCO being taken over by China for default in loan payments is ALSO false, having been refuted by the Zambian government, and reported by a reasonably credible news source, in this case, Reuters.

This goes to show that the fake news problem in Africa has gone beyond electioneering, and social media, and invaded mainstream news media via search engines such as Google News. It thus behooves us to be doubly careful in ensuring that outrageous actions allegedly conducted by one global power or another are carefully verified and vetted before repeating them mindlessly like ZeroHedge had done.

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I am working on making up a list of the most common African news sites that show up in the popular news engines, like Google, to be wary of, or they are outright fakes.

* The Kenya Times was a genuine newspaper that closed in 2010. That makes this site doubly suspicious.

Emergence of a decentralized digital economy? Snippets from Nigeria and Kenya

Continuing the conversation from the recent posts on app enabled demand redistribution as well as digital platforms being used by informal sector economic actors to boost their own productivity and efficiency, I thought to share snippets from these two recent articles I just came across, as cases in point.

From Nigeria, West Africa: How WhatsApp groups are fostering collaboration in Ikeja Computer Village

“I stay because it has helped my business in so many ways. Right now, from the comfort of my shop, I can reach out to other vendors when I need an item so that when they respond, I know exactly where I’m going to get it.”

And, from Kenya, East Africa: Drivers’ group launches Bebabeba taxi app

As I mentioned in my previous post, anyone can afford to build their own app to manage demand and supply, and, spurred on by the introduction of global players like Uber or Taxify, local drivers’ associations are doing exactly that, except now, its on their terms.

All Hail the Business Model Behind the Global Gig Economy

Uber driver Mohammed, New Delhi, 26th November 2018

The first world’s ardent embrace of the gig economy is already over. Buyer’s remorse is setting in, even though it may have helped global unemployment hit its lowest point in forty years. What will remain, however, is its impact on the usually overlooked Rest of the World, where the ability of an app to drive demand and scale reach, affordably and instantly, is currently transforming informal economies across the African continent, opening up whole new opportunity spaces for the social, mobile, youthful generation. Easy to set up and deploy, this app driven business model offers a flexible and negotiable solution to the age old problem of demand and supply in a mobile first world. My only question is whether it’ll turn out to be as world changing as prepaid mobile airtime?

From the Caterpillar to the Butterfly: Africa’s Mobile Boom Years Are Over, Here’s What Next

For the past 15 years, Africa watchers have been waiting for her mobile phone industry to reach a critical landmark – almost full saturation of the market. This milestone may be close at hand, as recent news and data show. In June 2018, Kenyan mobile subscriptions reached 98% penetration, a 13% jump over the previous year, the highest ever recorded, even with all the caveats of youthful demographics and many users owning more than one line.

And, it isn’t just Kenya, long known to be early adopters of innovation and technology. The African mobile market, as a whole, maybe reaching saturation point as the latest IDC data shows. Phone sales continue to show signs of decline. Unlike previous slowdowns of smartphone sales1 which were economy related and feature phones continued selling, this time the decline can be seen in both categories, implying the great African mobile subscriptions growth boom may now be over.

Even Nigeria, recently found to have more people living below the poverty line than India, has achieved more than 80% mobile phone penetration, with hopes that the end of 2018 will see 100%.

The number of mobile subscribers grew astronomically in 2017 and its penetration increased to 84% in comparison with 53% in 2016. With an increase in the number of affordable phones entering the Nigerian market and looking at the trajectory of growth between 2016 & 2017 (31% growth year-on-year), there is a strong indication that by the end of 2018, there might be a 100% penetration of mobile subscriptions.2

Healthier West African economies such as Ghana and Ivory Coast have already crossed the magic 100% threshold, as has conflict riven Mali.

Achieving this landmark has not been consistent across the continent, and some countries like Malawi and Chad are still below the halfway mark. However, it is known that Africa may never achieve the same level of penetration as seen elsewhere, given that 40% of the continent’s population is under the age of 163. And so, the current decline in new phone sales can already be considered the signal of a mature market, showing signs of saturation.

From the caterpillar to the butterfly

In a very short generation, Africans have gone from being mostly isolated – from each other, and the rest of the world – to being plugged in, all because of this very powerful device in their hands. The decline of phone sales, or the slowing down of subscriber growth numbers, should be cause for jubilation. The continent is now connected to the rest of the world, and Africans are talking to African across the span of mountains and deserts. Traditional pastoralists receive satellite data informing them of the best locations for forage for their livestock, and they can access insurance in times of famine and drought. Urban youth are trading bitcoins, while their mothers gather in social media groups to trade in goods and information. The entire operating environment of the African economic ecosystem has been transformed.

Where just over ten years ago, Nokia’s greatest concern was how to design ever more affordable and robust mobile devices which could connect people across languages and literacy barriers, now we have a population that has a decade of experience in information technology, regardless of their education levels. Even the most remote or marginalized have seen the phone, and can access its use, through intermediaries and access points. Digital Africa has become a daily matter of fact rather than an unusual achievement for the development crowd. You can see it in the tenor of the research articles, and read the difference between the way the growth of the mobile ecosystem was covered in 20054 and the way its taken for granted now.

The end of an era – double digit growth of the African mobile market – signals the beginning of a whole new phase of development and opportunity – a connected continent, ready for commerce and communication with the world.

Ten years of transformation

Over the past decade, mobile phone ownership has gone from a novelty to commonplace. It has bridged the rural – urban divide, strengthening linkages, both social and commercial. In turn, innovation diffusion pathways have proliferated from the urban centers, and the adoption of new ideas and goods has accelerated, changing aspirations and expectations, particularly among the younger generation. The global African does not need to leave her childhood village in order to speak to the rest of the world or be recognized for her achievements. Social media is there to give him a voice, and a platform.

It is this new reality that has not yet be recognized by the long established experts on Africa and its many varied challenges and unmet needs. The mindset, worldviews, and the consumer culture have changed far more rapidly than the now obsolete snapshot of the poverty stricken, marginalized African that media and researchers base their assumptions and their writing on. Policymakers and programme designers are even less in the know, and the gap between generations has never been wider.

On the upside is a whole new playing ground – my friend and colleague Michael Kimani calls it the informal economy’s digital generation. Young people like himself, graduating with university degrees into a business landscape without the jobs to hire them, are turning to the platform made available by their smartphones to establish themselves and earn a living. In the four short years I’ve known Michael, I’ve seen him grown and evolve into the voice of African blockchain and cryptocurrency, soon to be an educator on the subject, and already organized as the Chairman of the Blockchain Association of Kenya.

“What a great time to be alive,” Michael’s joyful voice still rings in my ear after our call last week. The digital future is all around him, a playground for him to build and make whatever his mind’s eye can envision.

The end of the world for a caterpillar (the decline of sales & subscriptions) is the birth of a whole new one for a butterfly (the global digital African with a powerful computer in his hands).

We need to throw a party and celebrate!

 

1 Smartphone sales, driven by more affordable Chinese brands, may continue to see growth, but as the IDC states, this growth may come from those transitioning from featurephones.
2 Jumia Mobile Report 2018 in Nigeria
3 The Mobile Economy: Sub-Saharan Africa 2018, GSMA Intelligence
4 Cellphones Catapult Rural Africa to 21st Century, August 2005, New York Times

Competitive Advantage & Customer Relationships: Lessons from Market Mummies of Ghana

Source: Gerry van Dyke presentation

Source: Gerry van Dyke presentation

How would you differentiate yourself in this informal retail market? Ghanaian market research guru Gerry van Dyke took a closer look at the market ‘mummies’ – Mama Biashara, as we call her – and their consumer marketing techniques in the “non-label environment”. His findings form an excellent foundation for understanding marketing and customer relationships in the informal sector. You can explore insights from his presentation here (PDF).

The story that follows tells the interesting marketing skills that reside in the traditional African market and the similarities in the tools employed by modern marketing.

The comparative global impact of Alibaba vs. Amazon

Alibaba Business School and the United Nations Conference on Trade and Development (UNCTAD) brought 29 young entrepreneurs from 11 countries across Africa to the Alibaba campus in Hangzhou, China for the third eFounders Fellowship cohort.

Chinese corporate soft power influence is production driven, not consumption focused. Alibaba, the e-commerce giant with digital payment tentacles, has been graduating cohorts of young entrepreneurs from Asia and Africa this past year. This initiative is the outcome from Jack Ma’s seminal visit to Nairobi last year, when thousands of young Kenyans waited for him in the sun.

Photo Credit: Abdishakur Mohammed, July 2017, University of Nairobi grounds, Kenya

He talks about entrepreneurship in a digital world, and personally shows up to meet visiting cohorts to talk about taking the lessons learnt from e-commerce in the most challenging environments in China (rural, mobile, social) back home to their own not dissimilar operating environments.

Contrast this with the first thing that comes to mind when you think about Amazon these days – a desperate workforce unable to take a leak, afraid to lose their low waged jobs as worker bees in a humongous warehouse. It keeps prices down and the consumption that runs the billions flowing, but whom does it benefit beyond the shareholders?

It struck me when I saw the news about “Alibaba Global Leadership Academy” that Chinese soft power was increasingly about driving production and growth aka development along their entire value chain, even among putative new consumer markets, whilst the American model was still stuck in a consumption driven mindset of the 1980s first wave of globalization. Buy more cola, wear our jeans, use our credit card, say the American brands in Jakarta or Accra or Nairobi.

The difference in mindset is stark when you think about the tech giants of Silicon Valley looking to uplift with low cost connectivity and internet basics for free, and compare to the Chinese giants thinking about raising the purchasing power first. The english language media would have you believe its all about neo-colonialism for natural resources, but the recent shifts in tactics and strategy seem to imply a less demoralizing mindset than anything evidenced by charitable good works handing out goodies to the downtrodden. Because whatever the agenda, the bottomline will be that at end of the exercise there will be a group left inspired to build their own markets on their mobiles, versus a group left holding a palliative goodie.

“My experience here has shifted my thinking. Before, we were focused on pleasing the investors, but now I see the importance of putting our customers first, then my employees, then the investors,” said Andreas Koumato, 26, from Chad , the founder of Mossosouk, an e-commerce platform. “Let others [benefit], then later, we will gain.”

Production driven social impact is far more powerful than consumption driven. Human centered productivity even more so.

Ibn Battuta in Timbuktu

An ongoing project has me immersed in the history of West African trade, and of course, contemporary accounts of regional cross border trade. Rather than not blog, here’s a link heavy post on Ibn Battuta‘s travels in the region back in the 14th Century. Click on the image for a larger version of the map.

“Histories and biographies there are in quantity, but the historians for all their picturesque details, seldom show the ability to select the essential and to give their figures that touch of the intimate which makes them live again for the reader. It is in this faculty that Ibn Battuta excels.”

Thus begins the book, “Ibn Battuta, Travels in Asia and Africa 1325-1354” published by Routledge and Kegan Paul.

Abu Abdullah Muhammad Ibn Battuta, was a Moroccan Muslim scholar and traveler. He is known for his traveling and going on excursions called the Rihla. His journeys lasted for a period of almost thirty years. This covered nearly the whole of the known Islamic world and beyond, extending from North Africa, West Africa, Southern Europe and Eastern Europe in the West, to the Middle East, India, Central Asia, Southeast Asia and China in the East, a distance readily surpassing that of his predecessors. After his travel he returned to Morocco and gave his account of the experience to Ibn Juzay.

He wrote what was possibly the world’s first account of globalization.

His adventures reveal, as Dunn writes, “the formation of dense networks of communication and exchange.” These networks “linked in one way or another nearly everyone in the hemisphere with nearly everyone else.

“From Ibn Battuta,” Dunn continues, “we discover webs of interconnection that stretched from Spain to China, and from Kazakhstan to Tanzania.” Even in the 14th century, an event in one part of Eurasia or Africa might affect places thousands of miles away.

Battuta crossed over 40 modern countries and covered over 70,000 miles. He became one of the greatest travelers the world has ever seen. He left behind a travelogue of his life’s journeys filled with details on the places, people and politics of medieval Eurasia and North Africa.

Trained judge (qadi), scholar, and observer, he’s been called a true Renaissance man, surpassing his contemporary, that other, more famous traveler Marco Polo.

Primer on African Fintech: Myths, Misconceptions, Opportunities, Hotspots and Roadblocks

As we prepare to start work for our third African fintech client, I thought it was time to quickly and briefly introduce the opportunity space and clear up some misunderstandings around fintech in Africa.

  • The first point is the common confusion between Fintech and financial inclusion. Investopedia’s definition of Fintech says financial inclusion, that is, affordable and accessible financial services to the underserved and unbanked is only one of the many areas fintech is actively addressing. While technology helps provide cheaper solutions for emerging markets such as those on the African continent, all fintech cannot be said to be equivalent to financial inclusion.
  • This leads us to a clarification on what exactly is Fintech. I prefer to quote Investopedia since the entry in Wikipedia defines it as the industry itself. “Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century. Originally, the term applied to technology applied to the back-end of established consumer and trade financial institutions. Since the end of the first decade of the 21st century, the term has expanded to include any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even crypto-currencies.
  • Thus, while financial inclusion is a key untapped opportunity space for fintech innovation of all kinds, there are numerous other opportunities along the entire value chain of financial service provision both B2B and B2C, including intermediary services, which are ripe for disruption in the African context.
  • Beyond the conventional preference for disruption of the existing context, there are as many if not more opportunities for meeting the unmet needs of African businesses and consumers. History, geography, economics and conventional wisdom have together combined to create a vacuum of solutions and services that address the unique circumstances of the African operating environment which still tends to be heavily cash dependent and is described commonly as “informal”. And this commercial environment has lagged in custom designed tools and services for small business productivity or household enterprise management.
  • Hotspots: Kenya overwhelming leads in mindshare as the leading fintech innovation market on the continent, and grabs the lion’s share of investments in East Africa. However, the GSMA’s latest report implies West Africa is rapidly catching up, and may outspend East Africa. The WAEMU region is a hidden hotspot, and Ghana leads the anglophone countries.
  • The largest market opportunity, by population, remains a challenge however, for a variety of reasons including policy and regulation. Nigeria’s payments innovators have made a name for themselves but their domestic market has not felt the impact of their efforts. Even mobile money, introduced more than 5 years ago, has only achieved 1% penetration. On the other hand, it took India years and years before digital payments reached visibly transformational critical mass. There’s hope.
  • Lastly, Chinese investment has just entered the African fintech space, talking up financial inclusion – a clear sign of its economic importance for the future development of trade and industry.

How informal financial services can lower the barriers to formal financial inclusion

Around 2 and a half years ago, I was on a short visit to Abidjan, the capital of Cote D’Ivoire as a guest of the African Development Bank. They were holding an innovation weekend for young women and men in the Francophone West African region who were interested in becoming entrepreneurs.

David O. Capo Chichi, who used to work back then for MTN, a major telco very kindly took me around the informal markets on his day off and we got to talking to market women about their financial management habits. One interesting behaviour linking the informal with the formal came to light.

An established spice seller told us she had a savings account at the bank, but accessing the bank’s services were a huge barrier – the opening times ate into her business hours and the long wait times meant loss of income from potential customers. At the same time, because she was dependent on cash income from daily sales, it was more convenient for her to put a portion of money aside on a daily basis. So what she was doing was paying a tontine collector for the service of showing up at her shop everyday and collecting her small amount of cash set aside for savings. He would hold it safely for her for a month and then she would take the total saved up amount back from him, take the day off work and go deposit it in her bank account. That was the only way she could have the flexibility and negotiability that budgeting on her irregular cash flow required and still access the benefits of a secure safe interest earning savings account at the bank.

Now today I came across this article describing a pilot program in Benin where the private susu (small small) or tontinier, such as that used by the lady in Cote D’Ivoire, have been formalized into a more secure and insured service for the same demographic of informal market women and traders. There’s even a digital component that updates the accounts via the mobile phone.

“The reality is that we can’t be everywhere, and the Susu collectors are near the population. We have to work with them and find the best business model to get them into the formal system.”

Now, this exact same model being piloted by the MFI in Benin may not apply in exactly the same way elsewhere, depending on the conditions prevalent in the operating environment, but its clear that the structures and systems in place at the formal institution can be made more flexible and negotiable – given a “human face” – by working together with the pre-existing informal financial services already in operation.

This behaviour also resembles that seen among the informal cross border traders at the Uganda/Kenya borderland. Teresia who sells clothes under a tree has established a trusted relationship with her mobile money agent. He shows up at closing time to help her transfer her cash into mPesa, thus securing it for her and saving her both time and effort through this personalized service. Though she said she had an account at the bank, it lies dormant, for the same reasons given by the spice seller in Abidjan – “Who can afford to close shop during the day to spend hours at the bank?”

Innovations aimed at increasing inclusion for financial services need not always contain a digital component for them to make a difference for the customer, and lower the barriers to adoption and usage. All it takes is a deeper understanding of the challenges and constraints of the end user in the context of their day to day life.