In recent history, Africa has relatively been a passive player in the global economy. It has been one of the biggest aid recipients despite being a primary producer of raw materials. A rising middle class across the continent, relative peace and political stability coupled with a new breed educated and progressive visionaries sets the scene for a promising future. The continent is now clearly in the sights of the investment world and stands out with unique opportunities. Like many developing nations, most African countries lack well developed infrastructure. Rising populations and their constituent middle classes present a plethora of opportunities across the board from infrastructure projects to consumer products and services.

These underlying conditions have led to various developments and success stories. Africa has played a pivotal role in the mobile telecommunications industry. It has catalyzed the growth of ‘bottom of the pyramid’ business models that excel at providing services to the masses at low margins. Most mobile telecommunication operators in Africa have setup eco-systems of airtime distribution across their operation areas, these unique eco-systems bring together both large and small scale entrepreneurs. In Kenya the biggest mobile phone operator utilises such a system that allows entrepreneurs at the lower end of the market to sell airtime denominated as low as KShs 5 which is about 7 US cents. There are success stories such as the former Celtel Africa, which built Africa’s biggest continental mobile phone network. It was Africa’s first multi-national operator that set the tone for such unique business and operation models. It was then sold to Zain (formerly MTC) of Kuwait and is now on course to be sold to Bharti Airtel of India. When Celtel was setup in the mid nineties, many were sceptical of its founder; Mo-Ibrahim, whom they thought as overly ambitious or naive.  M-Pesa is another unique innovation that has sprung out of Africa, it is a mobile micro-payment system developed by Vodafone and successfully implemented and tested in Kenya. This service has found its way to other parts of the continent such as South Africa and Tanzania and other parts of the world such as Afghanistan and the United Kingdom.

Such success stories shed a new perspective on Africa. Despite breeding problems akin to any developing region such as mismanagement, corruption and inefficient governments and policies, certain ‘hot spots’ in Africa are bound for rapid growth and development. Kenya’s Lake Turkana’s Wind Power project is a clear example of how this is so. It is a unique project that brings cutting edge technology to an African state facilitated with capital and expertise from various parts of the world. Upon completion, the project is expected to provide 17% of Kenya’s total energy capacity, and it should be able to meet 33% of Kenya’s non-peak consumption. It will be Africa’s largest wind farm. Such projects set new ground for development whereby progressive developing regions are adopting cutting edge technology and innovative business models that could in turn make them leaders in the respective fields of adoption. This is a game changing scenario that could make progressive states such as Kenya innovators and producers of technology and expertise that could be utilised by the rest of the world. Such areas are attracting capital and other resources with the hope of creating sustainable ventures.

The lack of well-developed infrastructure in Africa is an opportunity in its own right. Most sub-Saharan states failed to adequately invest in transport, communications and public sanitation infrastructure in the post-colonial era. Growing populations and relative prosperity have resulted in such facilities being used over their intended capacity. Power cuts, traffic jams and failing national telecommunications operators are common occurrences in many parts of the continent. However regime changes across the continent have brought about new partnerships and conduits for progress such as the massive de-regulation of the telecommunications industry that the likes of Telefonica, Vodafone, Zain and France Telecom increase their investments in Africa. The rise of China has seen it invest heavily in infrastructure projects in DRC, Angola, Sudan, Kenya and other countries in exchange for concessions and mining rights.

Green technology provides a promising future for Africa, and there are significant opportunities from industrial production and distribution to micro energy production. For example, Silicon Valley start-ups such as Potenco and Fenix International specialise in micro-grid green energy solutions with which they hope to take micro-energy production solutions to the grassroots level. Fenix has run successful trials for an adaptable portable micro-energy generator combination battery pack with multiple uses, from lighting to charging mobile phones. They are on course to establish partnerships with one of Africa’s leading mobile telephony operators.

Africa’s energy sector is undergoing a promising transition. Sustained and continued deregulation of the sector has seen the breaking down of inefficient government monopolies in power generation and distribution. Countries like Nigeria, South Africa and Kenya have opened up their markets to qualified independent power producers. The next step would naturally be opening up of the distribution segment of the market to independent distributors. This would lead to heavy investment in modern grid transmission systems that would distribute electricity to majority of Africa’s population which currently do not have direct access to the energy grid. Innovative hybrid business models will be required to allow small-scale and micro-producers of energy to tap into the lucrative African energy. If proper policies are adopted and the right partnerships fostered, there is no reason why the mobile communications success cannot be reproduced in Africa’s energy markets.


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Light at the end of the ‘green tunnel’ in Africa



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