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?
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.