South Africa used to be known as the dominant force in Africa’s banking. They remain that. The biggest bank still operates in South Africa in the continent. But something has been happening all these years, South Africa is no more just a banking and mining haven, it is a technology juggernaut. Get it right, South Africa is not the best sub-Sahara Africa nation with the best tech skills. No, but they are the bests in running the business of scaling tech ideas.
Two things help them. Their GDP is the biggest in Africa and they have people that can spend money and buy things. That affects how people invest and think about the country. Good GDP and promising middle class, you get a new S in the BRIC – the legion of emerging nations of Brazil, Russia, India and China. South makes it BRICs and they have been pushing for that inclusion in ads across the world as though those that got there had to lobby. It is all these African mentality – South Africa, focus on growth and they will add you. What is even there in adding S in BRIC?
So we think that Kenyans write good apps and build them, but they do not know how to scale. Also, the relative small economy and population are not that exciting to spend money in Kenya. Nigeria would have been a good one, but there are many poor people to keep the industry healthy in that nation. No wonder 65 telecoms companies have folded in recent years.
Simply, South Africa gets all the nice things. When Groupon went to shop for clones in Africa, they took Cape Town-based Twangoo. And of course, so far ignored other markets in the continent. In South Africa, they have the GDP and people to make that a good business.
Visa just bought over mobile financial services company Fundamo, and very soon Mxit, a mobile social networking site will have its turn.
The biggest tech idea from Kenya is Ushahidi but that is largely a charity project and we do not see the big business model. The Virtual City is a a great one. but until we see buy-ins, South Africa is on roll.
Interestingly, there is a new name in town in South Africa, they call Cape Town, Silicon Cape. They are perfecting the US Silicon Valley experience and they have picked their name. When will Nigeria get its turn?
So what about Nigeria? We need to get started and when we do,we need a name. We suggest, Silicon Island after a concatenation of Silicon Valley and Victoria Island. Victoria is shaping out to become the den of tech creation in the nation because that is where the deals will be done. You follow the money and let us go with Silicon Island.
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