African techno-euphoria and the origins of Kenyan mobile exceptionalism

August 30, 2012 11 By admin

I’m struck by one of those periodic waves of Africa techno-euphoria as I catch up on my post holiday reading (Google Reader, twitter, email, random subscriptions – is there no end to it?). The Guardian has pieces on how the web is changing Africa and 15 innovations that are transforming the continent. Meanwhile the Economist has a fascinating piece on mobile technologies in Kenya. Some highlights:

“In 2002 Kenya’s exports of technology-related services were a piffling $16m. By 2010 that had exploded to $360m. To its boosters, Nairobi is “Silicon Savannah”.

However, it differs from its silicon sisters in one crucial regard. From the start, its tech firms have designed their products for mobile mobile money by countryphones rather than computers. Kenya is still a poor country; few of its people own laptops. But there are 74 mobile phones for every 100 Kenyans, well above the African average of 65. And nearly 99% of internet subscriptions in Kenya are on mobile phones.

Three factors helped Nairobi to become an African tech hub. The first is a supportive government. In 2005, when Bitange Ndemo was appointed as permanent secretary to the ministry of information and communications technology (ICT), Kenya was a technological backwater. Access to the internet was available only through satellite connections and was wallet-sappingly expensive. In 2009 Mr Ndemo brought the first of four undersea internet cables to the Kenyan coast. Prices plummeted and bandwidth exploded. Just under 12m of the country’s roughly 40m people now use the internet, a number that has trebled since 2009.

Second, Kenya has undergone a revolution since 2007, when M-PESA, a mobile-payments system operated by Safaricom, a phone company, was launched (see chart). Many start-ups use it as a base for their business. One team streamlined the payment of school fees through the service by helping institutions and parents keep track of upcoming and late deposits. Another offered an electronic version of Kenya’s popular informal savings groups. M-PESA has also inspired others. In May Google launched Beba, a pre-paid card for commuters using Nairobi’s local buses. Insiders say that this is a test run for a much larger cashless-payment system.

Third, since 2010 Nairobi has had a place, called the iHub, for local techies to get together and exchange ideas. The iHub has expanded to include a consulting arm, a research department and an incubation space called m:lab, which supports start-ups developing mobile applications.

Will Nairobi then compete with other emerging tech hubs such as Bangalore and Tel Aviv? Not at once, says Joe Mucheru, head of Google in Kenya. Nairobi has exported two notable innovations: M-PESA (which began life in London) and Ushahidi, a non-M-PESA Kiberaprofit platform for crowdsourcing information during disasters. But most Kenyan tech firms are coming up with solutions to local problems. One team has built a service to help poultry farmers, who waste hours sitting around watching their chickens, keep track of their brood with text-message alerts. “We need to solve the nitty-gritty first and then we can invent new things,” says Mr Mucheru.

Yet this may ultimately be the key to Kenya’s success. “We have so many problems that can also be opportunities,” says Mr Ndemo. M-Farm, a service that gives farmers access to market prices for the cost of a text message and allows them to group together to buy and sell products, has won several supporters and awards. It is the sort of thing Kenya could export to other poor countries.”

Even taken with the necessary pinch of salt (tech fixes are seldom a pain-free substitute for sorting out inequality, injustice and exclusion), these are still fascinating developments. And I’m still waiting for a really convincing explanation of Kenyan exceptionalism: according to the accompanying editorial, Safaricom handles more than half the world’s mobile money transactions.