The opening plenary of SWIFT’s 23rd African Regional Conference brought together industry leaders from across Africa to discuss the most important issues facing the continent.
Recurring themes from the panel discussion included the need for a united African approach to common problems, policy maker support to encourage entrepreneurship and harmonisation across rules, regulation and infrastructure.
Sido Bestani, head of Middle East, Turkey and Africa at SWIFT, set the scene by outlining some of the trends that will be shaping Africa in the years to come. ”
Africa is still in a good economic position and is an attractive destination for investment but it faces some major challenges, such as a large unbanked population and low levels of intra-African trade. At the same time, it has a young and growing population, an expanding middle class and is leading the way in mobile technology innovation.”
Eric Osiakwan, founding director of Chanzo Capital, says Africa’s continued development is directly linked to the technological revolution. “Many expected Africa to industrialise during the last 20 years. In fact, Africa leap-frogged this stage and had a tech revolution that no one predicted. In 1998 there were more landlines in the US than in the whole of Africa.
“Ten years later there were more mobiles in Africa than in the US. And when broadband came to Africa, it came on mobile phones, not on desktops. We live in a mobile world.”
Across Africa, he said startups are providing weather reports for farmers, access to solar energy and access to healthcare advice – all through mobile devices.
“Mobile is transforming the way we collect and use data, taking it from a top down to a bottom up approach”, says Osiakwan. “This is driving profound change. Citizens can now consult doctors through their mobile phones. The way the healthcare is delivered is being disrupted entirely.”
David Lubinski, senior policy advisor for the Bill & Melinda Gates Foundation, says health and poverty are closely related in Africa. “When African families fall back into extreme poverty, more than 605 of the time it is due to health-related incidents.
“However, we increasingly see synergy between innovations in low cost digital financial services and the ability for individuals to build cushions against the financial shocks that would otherwise pull them back into poverty.”
Similarly, mobile money is transforming people’s lives in other ways. “The lives of the 2-billion unbanked can be transformed with access to mobile technology and formal financial services,” adds Lubinski. “Life without a bank account is expensive, but digital financial services play a key role in helping the unbanked manage their expenses, build resiliency and set a path to stay out of poverty for good.”
Technology is helping to drive social change across the continent but several panel members noted that it can sometimes be held back by policy frameworks.
Alain Raes, chief executive: EMEA and Apac at SWIFT, says: “It’s clear that technology is making huge advances. However, technology can only reach its full potential if the right rules, frameworks and interoperability are in place. Often, it is this lack of harmonization which is the obstacle to development rather than the technology itself.”
Demographics will also influence the continent’s development. The world’s population is predicted to increase by 1-billion by 2050, with 50% of that growth expected to come from Africa. This “demographic dividend” is creating a young and vibrant labour force ready to be accessed and utilised, but will also create challenges in terms of resource stress and meaningful employment.
Osiakwan sees Africa’s youthful population as an asset. “Millennials see that they can use technology to make change and progress. They are identifying challenges and using tech to solve them. Governments need to recognise this paradigm shift and ensure that they support it with the right policies.”
Terence McNamee, deputy director of the Brenthurst Foundation, has a different perspective on and says Africa cannot be compared to China. “African growth levels are nowhere near high enough to support the population expansion. Not enough was done during Africa’s boom times in terms of economic diversification and improving governance to support growth.
“Now that many economies are suffering from loss of commodity income, this creates a challenge in dealing with a booming population.”
Osiakwan argued that governments need to better support and ‘enable’ the private sector. “Policy making is not as moving as fast as innovation. Governments need to be more flexible; they need to look at what the private sector is doing, learn from it and support it. Policy makers need to see the private sector as partners and set a clear focus and agenda.
“There is still an ‘us versus them’ mentality and this needs to change. There needs to be more collaboration.”
The need for governments to work together more effectively was also identified as an issue by McNamee. He highlighted the need for a united African approach to address the continent’s challenges and maximise the opportunities.
“While the ‘Africa Rising’ narrative still rings true, the continent is still at the margins of global politics. It needs to better leverage regional integration and confront change more collectively than in the past.”
He pointed to the barriers to trade that are still present across the continent. “If a company in South Africa wants to transport a truckload of goods to Zambia, for example, it needs 1 600 documents to get there. If an African businessman were to do business in every country across the continent, he would need at least 30 visas to do so. Often being an African firm is not an advantage. There are real issues with the ease of doing business, with labour and mobility, and it stems from a certain mindset,” says McNamee.
That said, there are clear examples of Africa’s political will to cooperate. These include various regional harmonisation projects such as the Southern Africa Development Community (SADC) and the East African Community.
“Projects like Siress, the SADC regional payment system, are helping to make intra-regional payments – and therefore intra-regional trade – quicker, easier and cheaper,” says SWIFT’s Raes. “Volumes on the system have risen dramatically since it was launched. This shows what can be achieved through collaboration.”