Africa’s Digital Trek: From Kenya to the World

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November 15, 2019

Prior to posting this article, I had considered numerous alternative titles before settling for Africa’s Digital Trek: From Kenya to the World. Before I go into the details of the post, I think it is only fair that I shared what could have been the title and why.

First, I thought about “The Long Walk to (Digital) Freedom” mapped against Nelson Mandela’s biopic “The Long Walk to Freedom.”

A second option could have been “Digital footprints on the Silicon Sands of Africa poised on developments in the burgeoning innovation hubs in Africa.

However, “Africa’s Digital Trek: From Kenya to the World,” it is! And here’s why. It is the most appropriate considering all the hype around the digital exploits of Africa.

With this upfront disclaimer, I opine that there is a need for caution in the hype. Yes, numerous innovation (mostly digital) hubs have sprouted across Africa and a range of stakeholders including policy makers, the media and scholars (yes I am also complicit in this category) have gone ahead lost in optimism of the emerging entrepreneurial system and Africa’s response to the “Silicon Valley” innovation exploits.

However, it has since become obvious that this model has its darksides with the job cuts of tech developers in the sub-region and the inappropriateness of the so-called emergent “digital footprints” responding to the well-established “Silicon Valley” narrative.

At this point, however, I would like to reflect on my recent book entitled “Digital Entrepreneurship in Sub-Saharan Africa” and its precursor “Digital Kenya” both published my the Palgrave-Singer alliance. Indeed, in one of the chapters from the latter book entitled The KINGS of Africa’s Digital Economy Eric Osiakwan points out that:

“The tech wave is now moving through Kenya and has produced some of the country’s and the continent’s leading tech innovations—for example, Erik Hersman’s iHub and Safaricom’s M-PESA (made possible because of Vodacom’s prepaid airtime). The wave is now making its way to Lagos, Nigeria, and Abidjan, Ivory Coast. In my view, the wave’s route across and within these countries—namely, Kenya, Ivory Coast, Nigeria, Ghana, and South Africa (KINGS)—is worthy of exploration.”

“The digital economy in Africa started in Cape Town, South Africa, in 1995 when Mark Shuttleworth built Thawte, a leading certificate authority, and sold it to Verisign when Vodacom championed prepaid airtime.”

He also pointed out that:

“The wave then moved to Ghana in 2001, when, together with Mark Davies and others, BusyInternet was built—a multipurpose tech hub through which I started the Ghana New Ventures Competition in partnership with the MIT $50K Competition, bringing about www.smsgh.com“

My colleagues and co-authors not long provided a snapshot of this book in an article entitled “Digital technologies are transforming African businesses, but obstacles remain,” unfortunately I was left out due to the business model of the outlet. But that’s a matter for another day. For now, however, I would like to highlight the contents of the book and how it speaks to the current winds blowing across the continent. I would proceed with an audacious statement, “our book goes one step further” by asking pertinent questions such as:

What next for digital entrepreneurship in sub-Saharan Africa?

The book draws insights from the views of notable actors, insiders or those with a wealth of experience in researching some of the themes covered within it. From Ayodeji “Jobberman” Adewumi previously covered on this platform, to Professor Francoise “Ijeoma” Ugochukwu, also previously profiled on Tekedia.

Following on the heels of a sister book, Digital Kenya: An Entrepreneurial Revolution in the Making, this recently published book on Digital Entrepreneurship in Sub-Saharan Africa Challenges, Opportunities and Prospects, part of the Palgrave Studies of Entrepreneurship in Africa series, highlights the intersections of entrepreneurship and the “world of digital” in a context undergoing pubescence.

The collection showcases the exploits of digital enterprises in SSA drawing upon a range of case studies across sectors from agritech, fintech, media, animation and games. It also highlights the challenges and barriers that are in place and how some outstanding digital firms deal with operating in a hostile business environment. While digital platforms have created equal access for small businesses, many digital entrepreneurs in SSA continue to struggle with local environments replete with corruption, and other economic inefficiencies.

The contributions move the debate forward by addressing the challenges, opportunities, and prospects of digital enterprise in the sub-region. The book thus contends that, while on the one hand, digital platforms have created equal access, on the other hand many digital entrepreneurs in SSA still struggle with rather turbulent local environments. Consequently, this article touches upon three key sectors: Technology-enabled agriculture in Africa; Arts, Media and Entertainment ; and Innovation Hubs in Africa.

Technology-enabled agriculture in Africa

Two contributions focus on tech-enabled agriculture. The first entitled “The Nature of Corporate Digital Agricultural Entrepreneurship in Ghana”, takes the reader through an interesting research area on corporate digital entrepreneurship from the Ghanaian perspective. A similar view is expressed in the second contribution entitled “Agri-tech Opportunities at the Bottom of the Pyramid: How Big Is the Opportunity and How Little Has Been Exploited? Some Selected Cases in Nigeria”, which closely examines the rise of a distinctive form of entrepreneurship at the bottom of the pyramid interfaced with digital technology, illustrating the massive opportunities that could potentially be exploited. As the UN environment report points out, and instructively:

“From invaluable farming advice shared via text message to livestock vaccines delivered when and where they are needed thanks to a mobile phone service, Agri-tech and precision farming are changing the face of agriculture across Africa.”

This transformation is an urgent imperative. With global warming threatening harvests, and the world’s population set to grow to around 10 billion by 2050, a sustainable agricultural revolution is needed to secure food supplies and protect the resources that sustains society from the purview of the subregion and well beyond.

Arts, Media and Entertainment

In the sector of Arts and Entertainment, three chapters highlight prospects and challenges – albeit from a two-country perspective – i.e. Kenya and Nigeria. In the first of these chapters, Callus on the topic of “Shifting Cultural Capital: Kenyan Arts in Digital Spaces”, examines the impact of digital technology on cultural capital that is associated with curatorial practice, the gallery, and the marketplace. The chapter draws from the theory of cultural capital and illustrates how digital art challenges notions of authenticity in the discourse on African art.

As the emphasis shifts to the Nigerian context and especially in a more recently recognised entertainment sector, two further contributions are made. In the first of these, Bolat in her contribution entitled “The African New Media Digital Revolution: Some Selected Cases from Nigeria”, explores the historical timeline of and changes in the media landscape and presents an empirical investigation of new media SMEs (small-to-medium enterprises), reflecting on their journeys in establishing technological enterprises, the media used, and the resources that were critical to manage and run these businesses, as well as general commentary on enablers and barriers.

In the second contribution , “The Impact of New Media (Digital) and Globalisation on Nollywood”, the Nigerian movie industry is investigated in the light of digitalisation and new media. The article examined and highlighted how two major forces—new technologies and globalisation—have impacted (and are still impacting) upon the Nigerian film industry (also known as Nollywood), drawing on theories of value chain in production, distribution, and marketing of cultural products (i.e. movies), and its internationalisation.

Innovation Hubs in Africa: What Do They Really Do for Digital Entrepreneurs?

In a contribution of the same title of this section, one contribution provides a grounded perspective on Africa’s most widely noted type of digital entrepreneurship support organisation i.e. the explosion of innovation hubs across Africa and the claims being made regarding how they facilitate entrepreneurship, including digital entrepreneurship, in Africa. Indeed, this subject was also touched upon in Digital Kenya: An Entrepreneurial Revolution in the Making where the digital evolution is reported to have kicked off in 1995 starting out in South Africa (Cape Town) with Thawte, a leading certificate authority – later sold to Verisign when Vodacom championed prepaid airtime. Moving through to Ghana in 2001 with BusyInternet and www.smsgh.com and onwards to Kenya a leader in Africa’s tech innovations with structures such as Erik Hersman’s iHub and Safaricom’s M-PESA, and Yaba, a suburb of Lagos, Nigeria, labelled the country’s Silicon Valley with an established start-up ecosystem firmly in place.

Overall there is a need for more interrogation on how both incumbent and new players in the subregion are shaping the landscape and forging a renaissance – with a view to meeting the UN (United Nations) Sustainable Development Goals (SDGs). The book also concludes with some thoughts on the subject of digital entrepreneurship in SSA and its many facets and a call for more research into this topic by both students and staff in business schools across the globe with an interest on entrepreneurship in the subregion whether facilitated or constrained by digitalisation.

Note:

This article is based upon recently published book on Digital Entrepreneurship in Sub-Saharan Africa Challenges, Opportunities and Prospects as part of the Palgrave Studies of Entrepreneurship in Africa series edited by three UK-based academics of African heritage .

The book may be cited as follows:

Taura, N. D., Bolat, E., & Madichie, N. O. (2019) Digital Entrepreneurship in Sub-Saharan Africa Challenges, Opportunities and Prospects.

Digital Entrepreneurship in Sub-Saharan Africa

Nigerian Capital Market – Lessons from Dangote and Dangote Flour Mills Plc

By

Azeez Lawal

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November 14, 2019

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What will you call a man that sold a loss making business for $200 million, bought it back for $1 and sold it again for $362 million? I call him Dangote! Join me to take lessons from his business prowess.

Lesson 1: the art of negotiating

In 2012, Dangote sold 65% of Dangote Flour Mills Plc (DFM) to Tiger Branded Consumer Goods Plc (TBCG) for $200 million.

In 2013, TBCG increased their stake to 70% to become the owners of the company and soon changed the company’s name from Dangote Flourmills to Tiger Branded Nigeria Ltd.

Dangote didn’t lose any sleep selling the company because it was a loss making business (the company made a loss of N2.8 billion in 2012).

TBCG didn’t have a problem buying it because they were sure they could turn it around considering their status as South Africa’s largest consumer goods producer.

Sadly, the company reported a loss of N12.6 billion in 2015 from N6.1 billion loss in 2014, and N7.9 billion loss in 2013.

On 11 December 2015, Tiger Brands and Dangote Industries Limited reached an agreement with respect to the sale of Tiger Brands’ shareholding (now 65.7%) in the Company to Dangote Industries Limited.

How much did Dangote pay to buy back DFM?

He paid $1 for 65% stake, same stake he sold of circa $200 million less than 4 years ago.

As part of the deal, Dangote would inject N10 billion into TBCG while Tiger Brands would settle all outstanding debt of about N5 billion.

This is a masterclass in deal making by all standards, when you sell a company for $200 million and come back to buy it for $1, it’s a stuff of legends, it’s no fluke. Did I hear what about the N10 billion? Don’t make a mistake, not a kobo will go to TBCG, it’s an injection of cash into the business, it’s a working capital for the business.

Before you think it was a fluke and not so much to be learnt, listen to Ian Cruickshanks:

“The chips are down now, it’s raining disaster. The sellers saw South Africans with deep pockets coming. We have shown ourselves to be totally naive in negotiating outside our own borders and have been taken for a ride,” Ian Cruickshanks, chief economist at the South African Institute of Race Relations

The punch line: “…totally naïve in negotiating…”

Lesson 2: in business, you must know what you are stepping into, no matter how promising, always do your due diligence.

It’s not sufficient to say it’s Dangote’s Company so it must be good. It’s Nigeria, there is a market so it must be profitable. In business, a deep understand of the business environment is everything.

An understanding of your business environment will reveal where your opportunities are and the possible threats to your business. This understanding will produce realistic plans, forecasts and ensure their effective implementation.

As big as Tiger Brands is, they failed those basics. Listen to what the CEO, Peter Matlare said:

“…substantial new flour capacity had come on stream in Nigeria between 2010 and 2012, when the deal was negotiated”

In perspective, if you make plans for a new market with the assumption that there is a potential to grow local capacity from 700 to 1,000 when in actual fact your competitors had grown it to a possible capacity of 1,600, you are on your own.

Again, they failed in due diligence. For a loss making business, you cannot be hanged for being too careful but they were not even careful enough.

“Someone is responsible here. Was the due diligence done properly and who did it? Were the numbers checked out by auditors and if so, let’s ask the auditors how far their professional insurance cover goes” Cruickshanks said.

Lesson 3: when you realise your mistake, take your lesson, take your loss and move on, else you will lose everything.

You have to respect the bravery and elegance of TCMG in the face of a huge loss. They were brave and swift in taking their loss. They wrote off $120 million dollars and assumed the debt of N5 billion, the CEO stepped down, the company received $1 from Dangote as consideration for 65% stake and moved on.

Tiger Brands chief operating officer Noel Doyle, said at that time that it was a “good outcome” for the group, as it protected the interests of 3,200 people in Nigeria. “It has given us as elegant an exit as is possible in the circumstances.”

Welcome Olam!

Some months back, Olam International made a cash bid of 130-billion naira ($362m) to buy Dangote Flour Mills (DFM) of Nigeria.

Via a scheme of arrangement that became effective on 1^st November, 2019, Olam agreed to pay Holders of the shares of DFM N24 each per share for their holdings.

As at close of business yesterday 8^th November, 2019, a lot of shareholders had received their payment, it was a good deal for shareholders of Dangote Flours by all standards, and Olam was glad to take on such a huge investment and challenge.

“We are confident about the growth prospects in this country, and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” KC Suresh, head of Olam’s grains and animal feed division, said.

On 30^th October, 2019 DFM released their 9 months financials, it was another loss story of N6.8 billion. We hope it won’t be a de ja vu.

Whatever the outcome, the lessons from this Dangote Flour business case will remain a masterclass to be studied by foreign investors for a very long time.

We can only wish Olam well.

Final Lesson: billionaires never stop consolidating

On 4^th November, 2019, Dangote Sugar Refinery announced a proposed business combination with Savannah Sugar Company Limited (SSCL), a private limited liability company engaged in sugar cane farming and sugar milling.

Dangote moved on from Flour to Sugar the same week he received consideration for his holdings in Flour, your bet is as good as mine, Sugar is sweeter.

All hail King Dangote!

Towards Curbing the Menace of Public Officers’ Convoys in Nigeria

By

Ozioma Okey-Kalu

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November 14, 2019

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I met someone who just lost a dear one to an accident caused by a politician’s convoy. I didn’t get the whole detail, but from what I gathered, the person was inside a bus going to Nsukka from Enugu when they were ‘chased’ into a bush by the security personnel attached to a politician’s convoy. It was quite a painful story.

I didn’t doubt this person because I have experienced something close to this, except that we were lucky because our driver was good enough to nose the car into a safer place. We came out unscathed but much shaken. And to tell you that the convoy didn’t even stop to check on us is quite heart rending.

Just a few days ago, news of how a keke rider and his passenger were killed by an accident caused by this same thing I’m talking about filtered into the internet. These were not the only incident of politicians causing the death of road users. And if nothing is done, this kind of story will continue, especially as we are about to enter the festive period.

It is quite unfortunate that the people that are supposed to protect us are the ones harming us. They treat us like we are not supposed to exist. They forgot that without us, their offices won’t exist. Yes, Nigerian political office holders need to realise that they will not hold those offices if the masses are not in existence. They need to be educated on the importance of treating the masses with some respects.

For reasons best known to these politicians, they don’t want to share the roads with any other citizen. They allow their security details to cause accidents and deaths on our roads and they do nothing to stop them. We witness and hear stories about how their numerous security men – both the military, the police and the private ones – harass, beat and damage cars of people who dare not run into the bush while they pass. The people they do all these to only call on God and their ancestors to revenge their embarrassments and hurts because these politicians don’t care about what happened to the victims of their misdemeanours.

I once asked someone if these politicians will die if they slow down and pass through the busy roads like every other person. I was told that they (the politicians) were always in a hurry while passing through towns because they are afraid of assassination. I want to believe that this person was just saying what he felt because I don’t see why public officers should be afraid, unless they have nothing sinister to hide. And of course, the state of insecurity in the country doesn’t affect only public officers; we all face the danger of robbery, kidnapping and murder.

Besides, these office holders don’t move with this kind of security details while in FCT. At least, they respect every road user in Abuja, irrespective of who they are. I can’t remember sirens blaring on FCT roads, nor have I seen policemen attached to public officers breaking mirrors of motorists. So why do they treat the people in other states as if they are dirt?

They seem to forget how bad our roads are and wouldn’t be patient to wait for someone to clear out of the road properly for them to pass. All they care about is that once you hear their sirens blaring, you quickly steer clear and leave the road (whether you jumped into the gutter or bush is not their concern).

Speaking of the use of sirens, I thought sirens were banned in Nigeria, except in cases of movement of cash, ambulance, hearse and other emergencies. I know there was a time sirens weren’t used again by these office holders, but they have gradually brought back that custom. But if these people are truly running away from assassins, don’t they think that sirens will attract their ‘enemies’?

I’m honestly not against top public office holders rushing to meet up with some engagements; my concern is the harm they cause to themselves and to other people while they do that. They should consider meeting their engagements in time and in one piece. They should think about the safety of other road users and passers-by. They should equally consider taming their security men.

But then, it’s high time we Nigerians learnt to start taking these people to court. They damage lives and properties and get away with them. If people whose cars were damaged or who lost their dear ones through this inhuman act, decide to seek redress, even where the Nigerian factor in our judiciary delays judgement, a lot of positive changes will be brought into the system.

I also think the federal government needs to revisit the use of sirens by these office holders. I mean, what exactly are they trying to warn people of? Or does it mean they don’t really understand the meaning of that sound? Anyway, I don’t see any reason for them to make use of sirens because their presence shouldn’t alarm us. Even if they feel they must use siren, they should fix our roads so that cars can easily swerve out of the way when they come blaring like firemen that have an emergency case. Or alternatively, like someone said, they should move about with helicopters and leave us to manage our roads.

Data Science Nigeria Unveils AI Book for Primary and Secondary Schools

By

Samuel Nwite

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November 14, 2019

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Data Science Nigeria (DSN), has launched Artificial Intelligent (AI) development book for primary and secondary schools in Nigeria. DSN’s objective is to develop communities of young minds with AI development capacity across Nigerian basic schools. The distribution of the AI development book to primary and secondary schools in Nigeria, free of charge, is one way to achieve the objective.

DSN has a ten-year road map aimed at building a community of AI experts from Nigerian primary and secondary schools. To meet this objective, the convener of DSN, Dr. Olubayo Adekanmbi, said the book will be distributed to schools nationwide with the hope that it will prepare Nigeria in the nearest future as the one of the top 10 AI destinations in the world.

In a country starved of AI knowledge, the book will serve as the foundation of the basic knowledge that young people need. It is designed to democratize AI through simplicity, a factor that will help young ones to comprehend the concepts of AI and yearn to develop what they are learning.

The book which will be unveiled at the annual Artificial Intelligence Summit that will be held on Tuesday 19th of November 2019, in Lagos, is the first of its kind targeting young students in Nigeria.

The event is scheduled to run alongside the Artificial Intelligence Demystified Masterclass for executives and the all-expense paid Artificial Intelligence bootcamp, expected to be tutored by 26 international experts. It is supported by Microsoft, Softcom, Lagos State Office of Innovation, Bluechip Technologies, Retina-AI U.S.A, Axa Mansard, Carbon, Terragon Group and MainOne.

Richly endowed with the basic and deeper information about AI, the book starts with generic introductions to the core concepts; machine learning, deep learning, reinforcement learning and then, using the Python programming language, introduces a step-by-step guide to programming.

Putting the Nigerian environment into consideration, the book is designed to develop the capacity of deep thinking in young ones: A concept that will position Nigeria to harness economic growth in the age of data mining.

The author of the book, Adekanbi said:

“My intention is to go beyond the traditional code-first approach and motivate readers by helping them to understand what the knowledge of coding can do particularly in AI as a way to build an application-focused mindset.

“By creating pervasive knowledge across the country, we will open opportunities for every Nigerian to build the skills of the future. I believe that Nigeria’s population of 200 million, with a median age of about 18 years, is a huge strategic advantage that will position Nigeria as one of the top 10 AI knowledge centers in the world, especially if we proactively re-tool and reskill our young ones with relevant skills that can drive increased employability, foreign exchange inflows, AI-enabled startups, and enhance the general quality of life through solution-oriented AI applications in health, agriculture, financial inclusion, smart cities, and more. This will greatly benefit the lives of Nigerians, starting with those who train as data scientists and artificial intelligence scientists,” he said.

Adekanmbi has accumulated experience of 20 years in hands-on data science; he is also a researcher and a business leader. These fields of play gave him the basis to develop the AI book to serve the need of Nigerian young minds.

He has led the DSN non-profit vision in its two years of operation to significant successes, initiating transformational engagements that have impacted students positively across the country. That includes the 1st Intercampus Machine Learning competition that involved over 10, 000 students from 95 universities and polytechnics, AI Masterclass for businesses in Nigeria, dedicated Artificial Intelligence Community Hub, Industry-oriented hackathons, AI summer schools for kids, AI+Clubs in secondary schools, development of Nigeria-centric Machine Learning/Deep learning curriculum etc.

Read: Where is Africa in the Age of AI?

The spectator posture of Nigeria as the rest of the world advances in AI is worrisome. The governments have shown no or little interest in developing talents or skills linked to artificial intelligence. Therefore, Adekanmbi’s efforts in bridging the gap between Nigeria and the rest of the world when it comes to STEM bring hope to young minds whose knack for tech and science has been stymied by lack of development amenities.

There is hope that the introduction of this book to Nigerian schools will push the governments to action. The need to encourage technology among the youths cannot be over-emphasized, and as the world is moving away from oil to data-based economy, the importance cannot be ignored.

Africa Needs “Mines of Knowledge”

By

Ndubuisi Ekekwe

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November 14, 2019

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The centerpiece of new changes in Africa is the realization that mines of knowledge will always triumph over mines of gold or crude oil, in enabling sustainable economic developments. When the Rwandan government embarked on a mission to provide fast internet services via fiber-optic cable, it was working to tap into the ingenuity of its citizens. As the engineers dug the land to lay the cables, and not explore minerals, the country was extending the reach of its marketplace, not just within Africa, but internationally.

Africa’s Digital Trek: From Kenya to the World