Is African Boom Fair and Sustainable?

The latest figures released from the World Bank suggests that many African economies are certainly booming.  Nigeria, Ethiopia and Kenya head the growth list and are among the fastest growing economies in the world.   However when you travel around these countries there are two questions that naturally come to mind – is this growth both sustainable and is it genuinely helping all sectors of  society.


One of the problems with classing a country as a boom economy is that this often obscures genuine problems.  Just because a country is experiencing high economic growth doesn’t mean that the benefits are being distributed fairly.  For example in Nigeria, the riches are being made by the few with much of the benefits being taken out of the country.

A better measure of success is often to see how much of that growth is filtering into projects which can benefit all.  Africa is plagued by lots of problems and investment in roads, infrastructure, electricity and technology is needed practically everywhere.  The secret to sustainable success is to invest profits, to invest in Africa and the African people.

It’s when Africa sees positive benefits for normal people through improvements in their lives that you can feel that the growth is real and a positive force in the continent.  Growth which includes profits made by foreign countries, led by foreign CEOs supported by foreign investment is normally of little benefit.  In fact watching African resources plundered for profits made by outsiders can be quite depressing.

There are some very positive signs, you can now access the internet in most major African towns, something that was unlikely a decade a go.  People use the internet regularly and it’s not uncommon to see the BBC iPlayer being streamed to a mobile phone or tablet in Africa now using this technology to watch British TV online.

There is a growing appetite for business within Africa yet there is still much need for improvement.  It is difficult to start businesses and create wealth in Africa especially in areas where corruption is rife, yet this needs to happen.  Governments can encourage employment and growth but they can’t create employment directly – vast centralised economies are not really an option here.

Further Reading

Starting a New Business in Africa

It is of course, difficult to start up a new business anywhere in the world.   Which is why entrepreneurs with the know how and determination to do so are so highly valued.  However in Africa there are very specific problems to starting up and this article attempts to summarise them.


Defining your market and assessing competition is crucial, what will work in Europe is not necessarily going to be a success in Africa.  Start up companies possibly have more opportunities in Africa where markets are less mature and are not always completely dominated by established brands.  Most businesses without a high level of investment are best suited to niche markets where the competition is less intense.    Don’t pick a market which is already saturated, try and bring something new and different which will help define a target audience.

You do need to step back and look carefully at the area and market you choose.  Is there an effective demand for your product?  The word ‘effective’ is important here, it basically means that people both want and can afford your product.  Don’t set up a high end expensive restaurant in an area with high unemployment and low living standards, it simply won’t work.

The next important step is of course employees, in some countries you can usually be assured of finding people with the right skills in most industries.  However in Africa this is not always the case, it is important to source the right people within your budget.  If they don’t have the skills, the should be able to develop and attain them through mentoring and training.

One area that is seeing great progress in Africa is digital companies.  These are basically companies that exists and trade primarily online, which has a huge advantage.   Not only can you locate in areas diverse from your target market, also the costs can be significantly lower.  Take this web site for example which demonstrates a digital product called a proxy to allow people to watch the BBC iPlayer abroad.  It’s a product and market that is probably accessible in Africa and you don’t need retail outlets in Harare and Cape Town to sell them – just a web site.

Of course this does mean  that you can’t use ‘cookie cutter’ type web sites to sell products to African markets.  You’ll obviously need to adapt your approach depending on both the product and countries you are targeting.   Including native language support is also a good idea, selling in a native language is always a good idea and differentiates from  your competitors

James Hallaway




African Entrepreneurs Face Multiple Hurdles

There is something of an opportunity in Africa at the moment, for people who are comfortable online. Although Africa as is often the case has lagged behind the digital revolution, this is now beginning to change. THe infrastructure is improving quickly, partly due to the mobile phone which spread across Africa like no other technology in history. African’s love their mobile phones and these have developed so quickly that now many people have access to the internet through their phone networks rather than needing expensive computers and tablets which are often not available.


This means that there is a huge potential for ordinary African entrepreneurs to set up digital businesses. THere is no need for lots of capital, which is one huge barrier for Africans although financial systems are improving too. Goods and services can be marketed and sold online by anyone with a modicum of technical knowledge and a drive to succeed. Of course some investment is required but this is firstly quite minimal and secondly is often in knowledge, an investment that will pay dividends in other areas.

Some African entrepreneurs are even selling globally, although there are some extra difficulties they face. One of the biggest is the stigma of many African nations with regards to other people – Nigerian business people can have huge problems online because of the existence of the Nigerian scammers reputation. There are unfortunately a lot of online criminals based in Nigeria which makes it more difficult for legitimate business people who tend to get tarred with the same brush. This can mean not only a reputation causes problem with potential customers, it also can be difficult to get payment processors like Paypal and Credit Card companies to accept Nigerian businesses without a track record.

Fortunately there are methods around this, software like this can be used, to actually hide your real location. Combined with a remote virtual office and foreign postal address, an African businessman can operate virtually from another country if needed. This can be combined with a foreign based bank account to put them on an equal playing field to a European or North American online business man.

These might seem trivial obstacles for an online business, but in reality they’re substantial ones that people in the developed world don’t face. However there are increasing signs that digital entrepreneurs are creating wealth and prosperity in Africa. In Nigeria there are many thousands of legitmate online businesses being created, whether they’re internet marketers, programmers or web designers these are real people earning income online. The potential earnings may be small initially but compare favorably with African cost of living, and supplement many families incomes.

Further Technical information
Technical citation –

More Digital Companies Invest in Africa

Africa as a region has certainly concentrated in the IT sector in the last two years because of the vast increase opportunities and continues to be bringing attention. Seagate has set its existence and investments to develop using their essential focus being Algeria, Nigeria and Kenya. In accordance with the business, Seagate began investing in station plans and individuals to expand their market presence on the other side of the continent. South Africa is just another sizeable marketplace for the firm as a result of direction and its market share in the united states.

There is a growing digital industry in South Africa and some of the other more developed nations. The improvement in both infrastructure and the availability of smart phones has boosted this sector. Although the majority of digital sales from Africa are made in the same country and continent – more and more firms are now selling globally leveraging a highly skilled work force and lower wage costs. There are now thousands of digital entrepreneurs who run their businesses online, although do to some restrictions they are often using software like this – details here, to hide their real locations.


“As Seagate, we find tremendous potential for assorted states inside the African continent.

It’s empowered driving the increase as well as chances associated with growth of cloud.

Long term demands continues to develop quickly and fuel the interest in enterprise storage systems for scalable storage; particularly together with the increasing popularity. “In addition, the find an enormous increase in sections like company NAS and surveil, as well the enormous demand for more sophisticated consumer storage devices,” Assaf included.

Included in Seagate’s go to-market strategy their local Station Relationship Managers’ key focus will be to drive the growth of the Seagate Partner Program (SPP).

Seagate considers that investing in individuals is the key that will drive future growth.

For investors with steady nerves, the bulls say, Africa offers an opportunity to reap a better return than they would in the “old” emerging markets — an opportunity to cash on greater growth than they can expect from, say, the BRICs or the MINTs. While economic growth and a rising stock market don’t always occur in tandem, some investors see the two creating a virtuous cycle in Africa.

“We believe that Africa could be the ‘emerging market’ story of the next decade,” said Mark Mobius, executive chairman of Templeton Emerging Markets Group and manager of the Templeton Africa Fund,

Source: Technical Reference

Further Reading:

21st Century Transport Apps in South Africa

If you are stuck in South Africa without your own car, it can be hard work. For anyone who has been stuck in a South African city trying to catch a cab is a very difficult job for those unfamiliar with the environment. However, that is all set to change with a new range of applications for your phone which can actually hail a cab for you.

They work using GPS technology, meaning they are able to actively locate the nearest available cab to your position. There are quite a few different companies targeting this space including Zapacab, Snappcab and Afta Robot to name a few. Zapacab seems to be leading the way in South Africa though, releasing the first cab hailing application last summer. Many more people now have smart phones so the economics of these applications is starting to make real sense.

The primary goals of the application are efficiency and safety. Obviously it’s far more efficient for a taxi to pick up a nearby fare than to drive across town, which save time and money for the user as well. The user is also aware of the drivers name and cab before they are picked up and a record remains of the journey which should discourage the practice of making unnecessary diversions to bump up the fare.

These are local firms who are creating these applications so they are tailored for the South African market, however there are companies trying to create global applications like this. Uber have also launched an application in South Africa, which is tailored for the luxury market.

You can try these applications out for yourself or check the local media to get some feedback on them. As always if travelling be careful how you user your smartphone and internet connections. Try and avoid using untrusted wifi networks when accessing personal or private data, it’s a smart move to use a secure vpn or proxy service like this.

James Greenhoff is a regular contributor to this and other blogs/online publications. He also records and distributes technology videos like this one demonstrating how to buy proxy connections for use when travelling.

Internet Usage in Africa

There are many people who believe that one of the biggest chances that Africa has to develop and vastly improve the standard of living there is the internet.  There is no doubt that throughout the world there is a huge correlation between successful developed countries and internet usage in those countries.  Of course you could argue that it is merely representative of previous success which enables the infrastructure to be developed and implemented.  However I believe that is far too simplistic.

The internet is more than a way to keep up with your friends or waste a few hours browsing around.  The internet is the most powerful, market place for skills, goods and services that there has ever been.  There is simply no sort of physical business that can’t benefit from some sort of internet presence and literally millions of businesses that simply exist online with no physical location. For Africa this is important, one of the biggest obstacles faced by the African entrepreneur is the lack of seed or investment funding to start a business.  African banks have simply not provided this service in the past although thankfully it is changing.   However an internet business can be started for virtually nothing, time and effort goes a long way online and it’s a great way for an entrepreneur to start and make a worthwhile living.

It can be used to promote or develop a localised business or with a little investment in things like proxies or VPNs as illustrated here, you can reach markets globally.  However if you look at some of the statistics representing internet usage in Africa you can see a worrying trend developing.  Have a look at some of the stats on this site – Africa Internet Usage, you can see that internet penetration is dominated by the traditional economic successes in Africa.  Countries like Egypt and South Africa have a very high proportion of internet users, also Kenya has invested heavily in an usable infrastructure.  However the largest by far is that of Nigeria where at least a proportion of the massive oil revenues has been utilised to improve internet availability.   These countries alone have well over 50% of the internet users in Africa, but places like the Congo or Ethiopia have a depressingly small amount of internet users.

Of course the internet is going to solve all these countries problems but falling behind in yet another economic advantage isn’t going to help them either.

Further Reading

Africa and Asia Compared

Every continent has its own unique flavor that makes it special. And of course this character is composed of many different cultures. Thus, it is difficult to talk of Asian culture that contains such different countries as China, India, Japan and Thailand. Similarly, northern Africa with its desert and Arabian culture is very different to sub-Saharan Africa with its jungles, animals and blend of tribes and religions. Nevertheless, there are some pertinent generalizations that can be drawn about the two continents for the sake of comparison.

Firstly, there are the sterotypes. The Western world views Asia as the economic power house of the world. Japan and now China and Korea are leading the way in manufacturing industries. Asia is renowned for making cars and other high-tech goods such as computers cheaper, faster and better than the West. Today, China leads the world in terms of new patent creation. India for several years has been the brains behind many software and IT breakthroughs. Silicon Valley is full of people of Indian descent.

In contrast, Africa is seen as a backwater by the West; as a continent of basket-case economies that have been slow to enter the world stage provided by globalization. Corruption, civil war, natural disasters, draught, famine and even genocide are remembered only too well as part of Africa’s past, and perhaps part of Africa’s fate. African countries with the possible exception of South Africa have a very small manufacturing base compared to Asia.

It is not just manufacturing. From visiting the two continents it is very noticeable that small businesses abound in Asia – street stalls, noodle stands, markets, repair men on the side of the road, itinerant barbers  – you name it and you can find it on the streets of many of the mega cities of Asia. In contrast, in African cities there often seems a dearth of small businesses. It leads many to think that Africans have less entrepreneurial sense than Asians. Indeed many Chinese and Indian shopkeepers have set up successfully all over Africa.

It is time that we Africans address these real and imagined deficiencies in our cultures. Bringing better information technology to Africa and showing that we can be just as innovative as the Indians and just as industrious as the Chinese is part of the task that lies ahead for Africa.

African Renaissance

It is a common mistake to make to think that developing countries will go through a similar evolution to that experienced by the now developed countries. This is naive thinking. The industrial revolution started in England in the late Eighteenth Century. It was focused around steam power, coal and the ability to trade with a huge Empire at very profitable rates.

Now all countries have access to the combustion engine, to fossil fuel generated electricity. Several, to the chagrin of the West, have even managed to make foryas into nuclear power. Moreover, the West is no longer the factory of the world. This dubious accolade belongs to Asia, and primarily to China.

Manufactuiring is at the heart of a strong economy but this must be balanced by the need to better husband natural resources, prevent environmental deterioration and to plan for a future where water, oil, coal, metal ores, minerals, wood and food will be the most precious commodities.

This is the great irony for Africa is rich in natural resources, and yet remains very poor in terms of GDP. Africa’s natural resources are being exchanged for expensive manufactured and designed products from abroad – cars, planes, weapons, infrastructure projects and the like.

The solution is for Africa to redress this post-colonial imbalance. It must manufacture its own cars, set up its own IT services, form its own companies to make precision tooling equipment, to make electrical goods, to create aerospace parts etc. Naturally, outside know-how is necessary but the interference from outside corporate elements must be reduced as much as possible over a planned time table. This is about economic sustainability. Africa has the resources, it just needs to better use these resources. Africa used to be the richest continent in the world. It can be a real challenger for that mantle again with the correct macro management.