Africa’s lure is a difficult path
Grame Barty: The opportunities in Africa are huge, but so are the challenges for our tech SMEs
Africa is big, diverse, rapidly digitising and has huge promise as well as many dangers for export oriented Australian tech outfits.
So says veteran tech entrepreneur and trade expert Grame Barty, who has run his ruler over Africa and sent a submission in to the Senate Foreign Affairs, Defence and Trade Committee inquiry into Australia’s trade and investment relationships with Africa. Submissions to this inquiry close on August 18.
Mr Barty was General Manager of Austrade's Growth and Emerging Markets section from 2013 to 2015 which included responsibility for the trade and investment strategy for the countries of Africa.
As he notes in his submission, the potential around digital services delivered over mobile phones in Africa is massive.
“The African continent delivers one of the world's top three mobile phone – and increasingly smart phone – connected regional populations and will reach 725 million unique subscribers by 2020,” Mr Barty writes in his submission.
“This places the region up there behind China and India, and soon will have all of its continental and maritime space covered by low earth orbiting satellite solutions being offered by Space X, Google, Facebook, OneWeb and Space X.
“The entire African population – regardless of location, nationality, tribe, age or gender will shortly be able to access mobile and smart phone delivered services.
“This means that high volume, mass market, low cost cloud based universal new service delivery will be possible,” he writes.
Add in burgeoning electronic payment infrastructure, a growing tech development ecosystem with 173 tech hubs and incubators in Africa and venture capital funding in African tech startups increasing by a factor of 10, from $41 million in 2012 to $414 million in 2014 with $600 million expected by 2018.
But Mr Barty warns that many African countries are not for the faint hearted, with bribery and corruption prevalent as well as a lack of infrastructure and security and health concerns.
“As a generalisation many countries within Africa lack sufficient skilled, local blue collar and white collar talent, efficient infrastructure (power, transport, logistics, and urban utilities in particular), enforceable rule of law and are often beset by opaque business practices, bribery, corruption, facilitation payments and lack of adherence to contractual agreements,” he says.
Also African leaders can get very populist when it comes to foreign interests.
As an example, Mr Barty offers up Tanzanian strongman President John Magufuli who has got tough with foreign mining interests of late and has threatened to close every mine in the country if they don’t cough up the required taxes and royalties.
Other markets with rapidly growing middle classes such South America, India and China can be much easier and safer to negotiate for Australian exporters than the African countries, Mr Barty said in an interview with InnovationAus.com.
“There is no real middle class in Africa. The critical mass stuff is not there yet,” he said.
Nevertheless, the opportunities are rising in the African countries especially for those who can broadcast their products and services digitally without committing too many feet on the ground or having to negotiate with corrupt officials.
“Every African has a mobile phone and they can all access mobile payment systems,” he says and that is the conduit for being able to reach into the African market.
“You don’t think AliCloud is going to be sticking servers in Africa, do you? Those servers will be in China,” he says.
Because of burgeoning smart phone use in Africa, Mr Barty sees remotely delivered health services as a possibility.
“Let’s look at cloud based services using AI that can detect symptoms through a mobile phone. If the ailment doesn’t fit the AI parameters it spits out to a practitioner and there will be health practitioners around the world who log on like Uber drivers.”
There is also potential for Australia to export online education to Africa.
In his submission, Mr Barty raises the potential of linking Australia’s vocational training system to the African market through smartphone and tablet delivery systems.
“Australia has the best vocational training system in the world. Africa will have the world's largest unskilled population. We know that new jobs will need to be created in new industries which creates additional strains for Africa’s economies. Australia’s training system is highly capable of supporting Africa’s countries define this requirement/opportunity and deliver on it,” he writes.
This courseware would not necessarily need to offer accreditation, instead it could be offering simple skill development.
“I may or may not get accreditation for that skill – but before I start in a mine I have to complete an occupational health and safety course or learn the basics of operating a piece of equipment,” Mr Barty said.