Top in ICT in Sub-Saharan Africa -Mauritius, South Africa and ...The Gambia?

Sub-Saharan Africa did very poorly on the latest World Economic Forum’s Networked Readiness Index (NRI) with the majority of the region lagging in the bottom half of the 138 countries being ranked in the report. Exceptions were Mauritius (which ranks 47th) and South Africa (which ranks 61st).
Burundi (137th) and Chad (138th) were the worst ranked of all countries on the list.
Rwanda, which probably would have fared pretty well within Sub-Saharan Africa, was not ranked. This is rather strange since Rwanda’s ICT efforts are mentioned in the report. Moreover, Rwanda’s government has set the country on a fast-lane to technology growth.
The ranking holds some surprises. The Gambia and Senegal rank higher than Kenya even though Kenya did rise 9 places since the 2010 report. Hmmm. How much did The Gambian and Senegalese governments pay? :)
Here are the rankings of Sub-Saharan African countries

Country	Rank	Notable Improvement
Mauritius	47
South Africa	61
Gambia	76
Senegal	80
Kenya	81	up 9 spots since 2010
Namibia	82	up 7 spots since 2010
Cape Verde	84
Botswana	91
Ghana	99
Zambia	102
Nigeria	104
Malawi	105	up 14 since 2010
Mozambique	106	up 10 since 2010
Uganda	107	up 8 since 2010
Côte d’Ivoire	113
Benin	114
Tanzania	118
Mali	120
Lesotho	121
Burkina Faso	122
Ethiopia	123
Cameroon	125
Mauritania	130
Zimbabwe	132
Angola	133
Swaziland	134
Burundi	137
Chad	138

The full report is available of the World Economic Forum website for download (pdf)

Technorati Tags: Africa,Africatech,ICT,NRI,WEF,INSEAD,Sub-Saharan Africa,report

African Innovation Needs Real Venture Capital

I came across this Forbes article today by Mfonobong Nsehe in which he decries the absence of venture capitalists to support the technology innovators on the continent:

Africa has its own Mark Zuckerbergs, Andrew Masons, Mark Pincuses, Larry Pages and Sergey Brins. But it lacks its own Yuri Milners, John Doerrs, Vinod Khoslas and Y Combinators.

He adds:

Africans can create hugely successful tech products that will sweep the world off its feet. There are several entrepreneurs out there waiting to break through, but their ideas might never see the light of day because of a lack of seed finance. This is the reason Africa might never produce a Facebook, Groupon, Zynga or Google: There are no venture capital firms in Africa to fund these ventures.

Nsehe is right. When it comes to African technology, there is no, or little venture capital available to African entrepreneurs. The financing that is available generally comes from “social’ or ‘development’ type funders, not from venture capitalists wanting to get a huge return on investment. As a result, the funding comes in very small increments of $10,000 to $25,000. This is a lot of money in Africa but it cannot help African innovation compete at a worldwide scale.

Ushahidi is a perfect example of this. This revolutionary technology, whose founder is Kenyan woman entrepreneur Ory Okolloh (pictured). The technology has received worldwide acclaim and has been used around the world. But their funding mostly came from this social/development community. In fact, the funders listed on the Ushahidi web site almost all end in “Foundation.”

Sure, you could argue that Ushahidi has a “social benefit” aspect to it and therefore, it is normal that the funding would come primarily from the development or social funding community. But I wonder if the funders’ list had been different, if the technology could not have evolved into a profitable business venture as well.

A few years ago, I ran into a VC firm that had raised money from Vivendi and other big players. Their sole objective was to fund African technology. This was exciting. However, they were only interested in these mom and pop tech firms that had a ‘social’ benefit. The VC firm soon disappeared.

As an African woman, it is worse. You say funding, and the automatic reaction is “Micro-Finance,” a real pet peeve for me. As if African women entrepreneurs were incapable of managing anything more than a $50 loan. (Don’t let me get going on the women and finance thing here…). Development, social and micro-finance are not evil. They have their role and do help keep millions out of poverty. But Africa cannot develop by simply trying to not be poor. We need real multi-million dollar financing for African innovation. Is there risk? Of course there is, but no more than funding an online pet shopping site in Silicon Valley.

Technorati Tags: African technology,venture capital,africa entrepreneur,Forbes,Ushahidi

, Mfonobong Nsehe

Some Progress with Internet Availability

One of the greatest frustrations in living and working in this African country is access to internet at decent prices. About a year ago, a new provider came in with a huge campaign for the mass-market. Others have tried before but this company seems to have been quite successful. In fact, in a little over a year, they have signed over 25,000 customers. This may not seem like much but when you consider that there are only 100,000 total fixed telephone lines after 50 years, you can quickly see how 25,000 customers becomes important.

A customer first has to buy the equipment; a book size modem for about $150 or a small USB flash card sized modem for about $20. The smaller modem is definitely cheaper but the reception is not as good. Then customers buy prepaid cards denominated between about $2 and $50. the $50 card gets you unlimited usage for 30 days. The other cards have a per minute cost. For about $10 you can get about 16 hours of usage. This is really not bad at all.

The modems work in the three cities and there are plans to deploy to several other smaller towns within the next few months. The speed is pretty slow but fast enough for basic browsing and email.

The other day, I was passing by some security guards. One should note that security guards here make about $60-80 per month so they are on the very low end of the salary grade. But I overheard one explaining to the others how this modem worked and how he could connect for about 30 minutes at a time and get everything he needed done. That is the most exciting part of this solution. It will allow greater internet penetration to sectors of the population who could simply not afford to have the internet installed at home.

Since internet use is "socialized" one connection will serve several people. In one study I saw, one internet connection served an average of 12 users.

This important price decrease has not extended to the business sector where prices still seem exceedingly high. The provider I mentioned in this post recently extended its offerings to the business market. We asked for a quotation. They sent us a proposal for a one year commitment at $900 a month before tax (almost $1,100 including tax) for a 256k connection! Come on y'all.

So as you can see, there is still some ways to go but I am pleased that we seem to be heading in the right direction.

Changing Internet Providers

We decided to change internet providers. Our current provider does a pretty good job but at the US $ equivalent of almost $2,000 a month for a 256k connection, it was just too much for our budget. We found another provider (call them OW) that could provide a dedicated 128k connection at a little more than $400. Since the connection is dedicated, we should get roughly the same bandwidth with OW as with the 256k shared we got from the current provider.

We had contacted OW a few months ago and they had given us a quotation that was even higher than our current provider. When we decided last week to look for alternatives one of our interns told us his dad could get us a connection very fast. It turns out that his dad was merely an unofficial reseller for OW. But since our name was not mentioned by the Dad when OW gave him the quote, he was able to get a much better quote than we ever could (people just assume that we are incredibly rich and quotations here are often based on who is buying and not what is being sold).

OW was definitely a little disappointed to find out we were the client. They thought they could have gotten a much higher rate from us. Anyway, their claim to fame is to get you up and running the same day. We placed the order on a Thursday. No installation. They promised to do it on Friday. No installation. Then they promised to come on Saturday. No one showed up. Yesterday, we finally wrote a letter to them saying that if the installation was not complete by 3 PM, we would cancel and they would have to refund the entire installation fee and one month prepayment we had paid (installation cost was over $700 even after negotiations). Their manager agreed to have everything done by then. No one showed up until 2:30 PM. They started working on the roof to set up their equipment. Until 8 PM they were still on the roof. They promised to come this morning by 7 AM to continue. They did not arrive until 10.

A couple hours later, the technical manager comes to see us to explain that they would not be able to install the equipment after all. Their installation requires line of sight and there was a tall building between us and them (I guess they had never noticed it before now) and their equipment would not be tall enough to overcome that. So we have this gigantic beam on our roof that they now have to remove.

We had already cancelled service from our previous provider and we have no internet. Our second choice was with the state owned telecom. They are the exclusive provider of fiber optic service to the other ISPs and are themselves providers using ADSL. The paperwork to get a connection reads like a loan application. In addition to certified copies of this and that, they want photographs of the top manager as well as a copy of his national identity card. We have been customers forever since they have exclusivity over land lines but we don’t exist in their internet system and have to apply like everyone else. The application has to be accompanied with payment (cash or certified check) for the installation charge and one month of service. Then, they send the application to another city where their headquarters are for processing. The application then comes back and we wait until they have an “available port” to connect us to. They are suggesting two or three weeks. That is civil servant speak for “You will get connected in a few months if you are lucky but if you give me enough money I can move your file up and you will get your connection in a week.”

I am not sure what we will do. We might bite the bullet and go back to our previous provider. So frustrating. Such an essential element of development is incredibly expensive and difficult to obtain. There must be a better way.

Update: We went back to our original provider. Unfortunately, the new provider had sabotaged the original installation (removed the antenna, cut cables, disabled the radio) and after 2 weeks, our former provider is still working to fix the problem. So still no Internet.

OLPC's Fatal Flaw

I have a lot of admiration for Nicholas Negroponte and the OLPC (One Laptop Per Child) team. By in large, they got the technology right. They brought the right partners together and created an unbelievable product. The technological advances that are found in the $100 (OK, $300) laptop will certainly impact the way computers are built tomorrow.

OLPC has not had the expected success. There is nothing technically wrong with it. The pricing is reasonable. So why hasn't the laptop caught on in the developing world it was designed for?

The name says it all: ONE laptop PER child. The idea might be appealing to the western world but it is not a cultural fit for the developing world, or at least Africa where I am blogging from. Africans are very communal in nature. Outside of the wealthy elite that is not the target of the OLPC anyway, Africans don't individually own things, especially not children. Whoever has a radio or a television shares it with not just the immediate family, but the entire community. One never watches TV alone and one does not sit in a corner and read alone or get on a computer alone. People still do things together. Not because they are forced to but because that is the way they prefer it.

How do you reconcile this communal culture with the OLPC technology? Probably through a new approach. As well intended as the project sponsors are, I simply cannot imagine any African politician buying into the idea in any meaningful way. It is one of those things that are difficult to explain. Kind of like explaining to a white person what is it like to be black. You can't really put it into words.

Maybe they could rename it "laptops for all" and set them up for multiple users. Maybe they could change the target from children to families. It might not sound very politically correct but a business owner could leverage the technology a lot more and turn the laptop into increased revenue. By keeping track of inventory, accounting, communicating with customers and vendors electronically, the businessperson would use it in the day and his/her kids could use it in the evening. You could then have the government partially subsidize the computer and set up a loan through credit union or other micro-credit institution to finance the rest. Then you would have "One Laptop per Family" which is more in tune with our culture.... and, because it is contributing to economic growth, would be more sustaining long term.

Africans Don't Trust Africans with Technology

One would logically think that the most likely consumers of African technology would be Africans. Not so. Africans do not trust each other to provide quality technology.

Last year, we heard that a large company that is almost across the street from us wanted to implement a CRM (Customer Relationship Management) system. Since we are one of the few companies with experience in that area and given that we worked with several of this company's sister companies in various countries, including the US, we thought we had a good shot at getting the project. We approached them and offered to make a presentation. They explained to us that we were way too small for them and that they were going through an invitation only bidding process. Only European companies would be invited. Because there are few CRM implementations in this country, we thought that we would offer to assist them, at no cost, so that there would be a reference for a CRM project in the country. They refused. They were hiring consultants from Europe to provide project support. OK. Even free, our services are not worth it. Jeez.

A few months later, we received a call from a European company that was bidding on a CRM project in Africa. They did not have any experience and did not have any resources and they wanted to know if we would partner with them. You guessed it. Same client. Same project. We agreed.

We had to prepare the entire proposal and provide OUR references. Our partner company prettied up the proposal with their logo and made no reference to us. They redid the resumes so that our name would not appear anywhere. The proposal was shortlisted and the client requested a presentation. Oops. Our partner's sales folks flew in but, unable to answer any technical questions, had to include us. So we accompany them across the street for the presentation. Client did not hide their surprise. Our proposal turned out to be the best one. We (our partners) won. So here it was. We were not allowed to interact directly with the client so our partner sent a "project manager" to this country. Over a period of six months, we actually saw 4 different ones.

So here we were in this ridiculous process of having to send the project manager emails that he then copied and pasted into his emails to the client. The client would answer and he would forward the emails to us. Then, in the fine European tradition, our partner's project manager had to go on vacation so the project was at a standstill while he went on holiday. Then they sent someone new (after all, this is an African country, you send the people none of your European clients would accept). We lost 4 months on a project that should have lasted 3 as a result of the project management problems.

We would get sign off, send it to Europe, send them our bill. They would send their bill (our bill multiplied by 3) to the client. Client would wire the money to Europe and then, eventually (sometimes months later), partner wired money back to us. We eventually finished the project and the client was very pleased. Of course, our partner gets the reference and they profiled their success on their web site. As logical as it might seem for the client to contact us directly next time, they probably won't. They are too ashamed.

This was not the first time we faced the distrust of an African client. Before this subsidiary opened, we were contacted in the US by a large American software company for training on their technology in an African country. They knew that we had resources that could train in French (language of the client) and asked for some resumes. We sent the resume of our most qualified instructor. I got a phone call from the software company's African training manager. She asked if there was another resume I could send because our instructor's name sounded African. She said the African client complained that for the daily rate we were charging they "expected a White person." We did not do the training.

We do expect some push back from American and European clients when we, Africans, show up telling them we can provide them the best technology. Africans are poor starving people, not innovators or technology experts. We are prepared for that and have been succesful selling to large multinational clients or government entities outside of Africa.

To get this from our own African brothers and sisters is all the more frustrating. And we are no exception. Many other African entrepreneurs have shared similar stories with me. How can we progress if we so distrust our own people?

It's the About the Application of the Law Stupid!

The Managing Director of the IMF recently visited the country I am in. I read and re-read his concluding statement and it seemed very on-point:

"...Creating an environment conducive to private sector development is another priority area. In this context, strengthening governance, including a sound and predictable legal and regulatory framework, and an efficient judiciary is important."

It sounded almost as pertinent as the New Year speeches our President makes every year. Just as the Director of the IMF, our President really does seem to understand what is wrong with the country. The problem with him is the same as the problem with the Director of the IMF, they are either powerless to do anything about it other than making speeches that give people like me a half an hour's worth of hope that things will change, or they want to look the other way.

A few years ago, our President, in his New Year's speech announced the passage of a law eliminating taxes and duties on all information technology products. I was still living in the States then. About a month after his declaration, I landed in this country with computers, printers and other equipment for our local subsidiary. The customs officers were quick to tell me that we had to pay an inordinate amount of customs duty. We reminded them that the Head of State had announced that there was no more customs duty. They said that they had heard the speech as well and the law had been passed but that the “texts of application” of the law had not yet been drafted so we still had to pay. Of course, they offered a "discount" to keep it off the books. I thought that the receipt would be a weapon to use in the struggle to improve the business environment so we paid up.

A month later, the “texts of application” were published. Before anyone had a chance to take advantage of the new law, they repealed it. Taxes and duties were back on. No speech, no announcement, just those nasty “texts of application” that cancelled the law. Imagine the consequences for a company that placed a large technology order from overseas that had not yet received its merchandise? Not a nice surprise, especially not when the taxes and duties are about 50% of the value of the technology.

Back to the recent IMF visit. Of course, high on the list of the discussions was the fight against corruption. As in the President’s New Year’s speech and in many other political speeches, the government reiterated its commitment against corruption. But that little problem of the “texts of application” of the law creeps up again. In their Letter of Intent following the visit of the IMF, the country stated:

In April 2006, the government enacted a law defining the modalities for application of [the law], which refers to the disclosure of assets by senior government officials. Nevertheless, the commission that was to have been set up under this law to receive the asset declarations has not yet been established because the legal texts governing the application of the law have not yet been prepared. Similarly, the National Commission to Fight Corruption, created in March 2006, is not yet operational as its members have not yet been named, given the considerable time needed to ascertain the integrity of potential members.

Given that corruption is the government’s top priority, you start to understand why nothing changes here. And every time the World Bank, the IMF or US Government officials come in, our government will proudly display the laws on the books to fight corruption, to improve the environment for the private sector, to fight poverty, improve education, etc. And the World Bank and friends will have their conscience relieved that their admonitions were effective and that finally the Country is "behaving." The laws are well written and sound great. The problem is not just that they are not applied but that there is no consequence for not applying them. The judges can see the laws and chose to ignore them with no consequence, same with the police, the custom agents and all other public servants. Until the Country has to account for the non-application of its laws, it will not establish mechanisms to enforce them.

New Technology Initiative in Africa

There is a really great story about another starry eyed entrepreneur who is wiring up Rwanda. http://www.spiegel.de/international/spiegel/0,1518,457000,00.html.

"Africa offers many investment opportunities," says an enthusiastic Greg Wyler, a boyish-looking man in his mid-thirties. "We simply have to bring the Internet into each of these huts, and the rest will fall into place." Wyler, an American entrepreneur, hopes to launch an "African Renaissance" with his project.

His optimism reminds me of mine, a few years ago. I want him to succeed because I want the me of a few years ago to be right about Africa's potential and our ability to come back from very far. I remember that when we were looking for a motto for our non-profit, we chose "beyond the digital divide." The point was that we should not try to catch up but to leap forward. This meant that we should not be accepting old PCs that could not utilize the latest in technology but try to acquire and develop cutting edge technology which would bring Africa to the forefront of the digital age.

To make this happen, we developed a project called the African Center for Technology Innovation and Ventures (ACTIV). This center was to be a sort of incubator for high-tech entrepreneurs and a place where all types technologies from Africa and elsewhere could be showcased. The ACTIV offices are open and wired up but the center is non-operational because our business was funding the project and we could no longer fund ourselves, let alone this project. It is a pity but the experiences we have had in the country on the business side will help us in better guiding the entrepreneurs once the project is able to launch again. The most important lesson we have learned is that the main impediments to the development of technology are not infrastructure and lack of skills, but corruption and government intervention.

I am still hoping that we will one day be able to make the project happen. The Rwandan example is one of an American entrepreneur contributing to development in Africa through technology. As much as we encourage the Gregs of the world and welcome their initiatives, we also want to empower Africans themselves to build technology businesses. Just wish our governments were not so against us.