Local ICT sector review

Transformation-Ready: The Strategic Application of

Information and Communication Technologies in

Africa (eTransform Africa)

Discussion

document for 28-

30 June 2011

working sessions

Project scope and objectives

Objectives

• Identify the role that ICT can play in transforming the economy

• Review examples of successful ICT applications by region

• Highlight scalable regional applications for in-depth case studies

• Identify constraints to ICT applications and companies

• Identify enablers to ICT applications and companies

• Provide options on the roles that the World Bank and African

Development Bank can play in encouraging ICT development to impact

individual companies

page 1

Geographic focus

page 2

Democratic

Republic of

Congo

Central African Republic

Côte d' Ivoire

Cameroon

Djibouti

Algeria

Egypt West Sahara

Eritrea

Ethiopia

Gibraltar

Equatorial Guinea

Guinea-Bissau

Kenya

Libya

Morocco

Mauritania

Niger

Nigeria

Sudan

Sierra Leone

Senegal

Somalia

Sao Tome and Principe

Chad

Tunisia

Uganda

Angola

Burundi

Botswana

Rep. Congo

Gabon

Gambia

Guinea

Lesotho

Mada-

gascar

Malawi

Mozambique

Namibia

Rwanda

Swaziland

Tanzania

South Africa

Zambia

Zimbabwe

Benin

Liberia

Comoros

Seychelles

Mayotte

Burkina Faso

Mali

Togo

Ghana

Focus countries

Morocco

Nigeria

Kenya

Focus companies

Casablanca

Technopark

Paga

Virtual City

Illustrative hierarchy for discussion

page 3

ICT infrastructure

Accessibility

Environment

ICT hub

Content development

ICT enabled private sector

Content export

BPO

Methodology - leveraging Hierarchy of ICT needs

Framework Structured ratings

process

Data and insights

• Interviews with ~75

organizations in three

target countries

• Desk based research

• Deep dive case studies

ICT

enabled

private

sector

1 2 3 4 5

Reach of

banking

Use of

tech by

SMEs

Banked

population less

than 30%

(mainstream

banks and

alternative

channels)

Banked

population is

30% to 50% of

total population

(mainstream

banks and

alternative

channels)

Banked

population is

50% to 70% of

total population

(mainstream

banks and

alternative

channels)

Banked

population is

70% to 80% of

total population

(mainstream

banks and

alternative

channels)

Banked

population is

greater than

80% of total

population

(mainstream

banks and

alternative

channels)

Most

transactions,

inventory,

accounting,

logistics, and

payroll

completed

manually

Most

transactions

inventory,

accounting,

logistics, and

payroll

completed

manually with

some use of

spreadsheets

and POS

systems

Transactions,

inventory,

accounting,

logistics, and

payroll

completed using

spreadsheets

with some use of

database and

ERP/ POS

functionality

Transactions,

inventory,

accounting,

logistics, and

payroll

completed using

POS and ERP

systems that are

not fully

integrated

Transactions,

inventory,

accounting,

logistics, and

payroll

completed using

POS and ERP

systems that are

fully integrated

Example classification: ICT hierarchy classification (ICT

enabled private sector, 4/8)

page 4

Hierarchy of ICT Needs: Kenya

Hierarchy of ICT Needs: Kenya

page 5

Illustrative quote:

“Game changing innovations and wealth comes from solving

problems…Africa has a lot of problems” – Kenyan ICT expert

Roadblocks Pathways

Lower cost of failure through fellowships and business

development programs: De-couple business and personal

success

1

2

Small pool of qualified young tech graduates: Limits

pool of talent to enable scale in existing companies,

reduces likelihood of breakout tech entrepreneurial

ventures

Examples of success as a motivator: Raise profile of tech

successes in Kenya, continue to attract high value competitions

to make income generation potential of tech tangible

Additional rigor of university level ICT programs: International

standards applied to University technology curricula

High cost to entrepreneurship: Reduces tendency of

talent to move into young innovative ventures Implement guarantees for small business AR: Reduction of

cash conversion cycle, starting with most reliable payers serves

to improve small business cash management and prospects

3

Low perception of quality and trust in Kenyan

businesses: Kenyan businesses must be “that much

better” to succeed, limits tendency to execute large,

outside of network, initiatives

Conduct joint initiatives with local companies and

encourage partnerships with international bodies: Boost

credibility through partnerships

Implement counterparty verification: Objective assessment of

risk of doing business with reviewed counterparties

4

Limited exposure to foreign innovations and

markets: Few beyond Diaspora benefiting from

innovations developed elsewhere and bringing

international perspective

Increase pathways to foreign exposure: Support efforts to

introduce foreign experts to Kenya and vice versa

Unclear government policy and protectionist

tendencies: Strict labor policies reducing ability to do

business internationally and benefit from scale 5

Collaboration with governments to dialog on labor policy:

Initiate conversation between business leaders and government

on specific areas for labor policy improvement

Central policy clearinghouse and interpretation: Develop hub

for dissemination of easily understood policy information

Kenya roadblocks and pathways

page 6

Insights from firms on challenges to growth - Kenya

page 7

Virtual City Mobility solutions provider

focused on supply chain

automation and agriculture

management. Winner of

USD 1M Nokia Growth

Economy Venture

Challenge award.

Wananchi Provider of internet services

and pay TV through Zuku

and SimbaNet to Kenya,

expanding across East

Africa. Funded by East Africa

Capital Partners, ECP,

Oppenheimer, Sarona, and

Liberty Global

KenCall Call center and general BPO

provider serving Africa based

and International clients.

Recently launched M-Kilimo

agriculture advisory services.

Kenya’s first international call

center.

Ob

serv

ations

Insig

hts

• Key to success was to learn from the best and adapt this to the Kenyan market

• Built international credibility by winning international prizes (Nokia and Legatum)

• Cost of data storage and cloud hosting in Kenya raised barriers to startup

• High risk to fraud/theft for Kenyan enterprises that use manual book accounting

• Exposure: Partner with global leaders to develop best practices and credibility

• Infrastructure: Power and data center shortage raises cost of operation

• Transparency: Automation and systems critical to limit corruption and increase

international credibility of Kenyan companies

Ob

serv

ations

Insig

hts

• Zuku retail offering catering to more affluent reliability sensitive market

• Wananchi experiences a high incidence of wire clipping and other acts of

sabotage/theft of infrastructure that raises their costs (and is passed on to customer)

• Management hired from outside of Kenya, local hires are typically installers/ sales

• Wananchi funded by Africa, North America, and Europe based investors

• Infrastructure: Urban affluent internet provision in Kenya is a maturing market

• Security: Cooperation among rivals and hardware security needed to lower costs

• Staffing: Limited skilled tech managers in Kenyan market, education needed

• Funding: Kenya is becoming an attractive entry point for international investors

Ob

serv

ations

Insig

hts

• Overcame global view of poor quality in Africa by being noticeably better than comps

• Entrepreneurs face high cost and risk due to limited ability to rebound in small market

and cash pressures on customer and supplier sides (high AR days)

• Challenge to serve east African clients (Uganda and Rwanda) due to stringent in-

country labor requirements, not able to recognize scale benefits to specialization

• Exposure: Limited international visibility and scale in African successes raises the

hurdle of success for African business

• High operational costs: Cycle of delayed payments a constraint to young businesses

• Policy: Protectionism within regional group constraining cross-border business

Insights from firms on challenges to growth - Kenya

page 8

Ushahidi Open source data

aggregation and

visualization platform.

Founded by Kenyan

programmers. Serves

users in every inhabited

continent

Rivotek Strategy and

implementation consulting

for business information

systems. Founded by

Kenyan in partnership with

US based company (ENI

Systems.)

Ob

serv

ations

Insig

hts

• Founders able to scale globally because each came from a different geography and

industry so they brought a diversity of “spheres” to the business

• High incidence of family and relationship based initiatives due partially to trust issues

• Most users and information suppliers are young

• Exposure: Scale initiatives most likely from leaders with international exposure

• Education/Security: Counterparty verification and objective certifications needed to

enable more transactional and ICT enabled partnerships

• Education: Younger population driving adoption, role for education to advance use O

bserv

ations

Insig

hts

• Most purchase decisions for ERP software driven by regulatory mandate/compliance,

IT managers in company, and western educated managers

• Decision to purchase an ERP system more common for scale companies

• Some small Kenyan companies resistant to transparency that comes with ICT

• Exposure: Managers exposed to global businesses more likely to integrate ICT

• Policy: Compliance need has high potential to drive a sea change in ICT adoption

• Transparency: ERP system integration enables enterprises to scale while lowering

the risk of corruption/theft away from the hub

Case Study: Virtual City- Overview

Services

Overview: Logistics and agriculture management

application (app) developer at the intersection of fixed and

mobile devices

Evolution: Founded in 2000 as an online shopping

destination then shifted into mobile phone solution

development

Funding: Funded by founders and international innovation

award winnings (USD 1M Nokia Innovation prize and USD

50K Legatum Pioneers of Prosperity prize)

Users: Serves large multi-national corporation clients (Ex.

Coca Cola), moving in to retail/shop keeper market in Q3

2011 by leveraging learnings from larger clients

Supply Chain

• Distributr- Field agent sales and receipt generation app.

Consolidated information used to issue stock, manage

inventory, submit orders and provide feedback

• Routr- Management and optimization app for distribution

• Sales Managr- App for mobile sales management (order taking,

customer information tracking, sales goal monitoring)

• Mappr- Geographic information system app to track asset

usage, track trends, and visualize data

• Other field to HQ templates- Enginr (supply chain), Haulr

(dispatch/delivery), Tracr (product history tracking), Warehousr

(stock tracking), and Monitr/Project Managr (project planning)

Agriculture

• Agrimanagr- App to manage weighing, grading, and receipting

of farm products. Enables supplier payment using cashless

transactions and tracks/ rewards loyal customers and suppliers

Enterprise Resource Planning

• Microsoft Dynamics CRM- Licensed to automate sales process

• Other field to HQ templates- Auditr (survey market), Plannr

(event management), Contactr/Membr (track/message contacts)

Governance/ Non Profit:

• Electr- Vote tallying and elections process automation app

• Grantr- Grant management and budgeting system

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are needed to see this picture.

page 9

Case Study: Virtual City- Contributions to scale ICT

Enables enterprise transparency

and fraud reduction via

automation

• Supply chain transparency throughout route reduces theft: More

visibility into point and timing of theft or fraudulent activity

• Visibility from supply chain to books boosts credibility: Increases

difficulty of shadow accounting and manual adjustments to accounts

Uses mobile gateway to extend

enterprise grade solutions to

small shop keepers

• Mobile phone based accounting and stock management is

accessible at a low cost and literacy threshold: Reduces waste in

system via real time stock adjustments and price transparency

• Learnings from MNCs leveraged in retail product: Extends best

practices to through the value chain to distributors

Extends learnings from exposure

to international markets to

provide tailored solutions

• Localization of technology via extrapolation to mobile platform:

Rebuilds existing solutions for mobile device deployment to enable

greater utilization in East Africa

• Serves as interface between Kenya/world: Exposure via competitions

gives international community a view into innovative Africa

Challenges

• Companies with limited international exposure or IT knowledge

resistant to adoption: Fear among some managers of too much

transparency, adoption driven by CIOs and western managers

• Regulatory compliance requirements raise cost of operation: Data

storage required in-country, limits scale benefits of specialization and

migration to cloud based technology

• Staffing of qualified developers difficult: Growth limited by

availability of skilled developers and managers

• Power consistency constraining productivity: Frequent black outs

reduces ability of developers to drive output and reduces customer faith

in Kenya based technology

page 10

Hierarchy of ICT Needs: Nigeria

Hierarchy of ICT Needs: Nigeria

page 11

Illustrative quote:

“It will take at least 20 years for Nigeria to build a broad-based tech

culture, but near term islands of excellence are possible” – ICT Expert

Roadblocks Pathways

International leadership enabler: Mix of domestic and foreign

managers, advisors, and directors

1

2

Low digital literacy: Constrains ICT adoption and

innovation at consumer and commercial levels

Mobile phones as digital gateway: Increased access to smart

phones, mobile enabled web pages, mobile as information portal,

mobile application monetization

ICT education: Increased access to ICT in schools, dedicated

training for students and business owners

Lack of exposure to external markets, few domestic

forums: Reduces visibility into new technology and

scale of business

Exposure as a two way street: Expert exchange and learning

trips, in country forums and incubators

3 High barriers to business development: Little early

stage capital, high cost of operation, high cost of failure

Investment rather than aid: Low returns to early stage venture

in Nigeria, but necessary for growth

Operating cost parity: Support for high cost of power,

connectivity, and facilities

4 Limited access to virtual payments: High non-

banked population (80%) and limited means for online

payment limits ability to automate for domestic needs

Mobile money adoption: Support for regulation and

encouragement of mobile money movement

Online tech community portal: Development and networking

tools for African tech stakeholders

Rampant fraud and mistrust: High levels of distrust

within businesses and among partners, strong reliance

on relationships rather than capabilities, international

perception of risk

5

Technology as a fraud reduction tool: Business automation to

enable scale and increase intra business accountability via

transparency

Certification promotion: Objective certifications of ability and

reliability among individuals and businesses to enable non

relationship-based counter party verification

Nigeria roadblocks and pathways

page 12

Insights from firms on challenges to growth

page 13

Adlevo

Capital

USD 52M Growth equity

fund based in Nigeria.

Founded by former Silicon

Valley based tech investor.

Portfolio includes

investment in Interswitch.

Paga Mobile money provider

based in Nigeria. Founded

by former tech and Private

Equity professionals.

Granted provisional license

by the Central Bank of

Nigeria to launch services

in two states.

Ob

serv

ations

Insig

hts

• Principals entered the market to invest in innovative platforms but found only a few

truly innovative companies, and even fewer with proven technology and revenue

• Tech entrepreneurs mostly clustered in web design and portal development

• Very little technology observed in schools (even at University level)

• Education: Investment in education and research engines needed to develop

innovative tech platforms (affect of weakness at the base of the ICT hierarchy)

• Funding: Very early stage, long term focused, investors needed

• Education: Tech innovation requires ICT in schools (ex. India and Israel models)

Ob

serv

ations

Insig

hts

• Paga pays USD 800 per week for a generator (power redundancy), major telecoms

providers must place generators and security at each tower deployed in Nigeria

• The top developers at Paga are in very high demand and are in high demand

• Infrastructure/ Cost of operation/ Policy: Power inconsistency and security

requirements for business in Nigeria suffocating business growth and development

• Education: In Nigeria a premium is placed on the developers that were able to get

enterprise grade education, this typically came from international exposure

Insights from firms on challenges to growth

page 14

Mobitel Broadband service

provider based in Nigeria.

Led by Nigerian born

telecoms professionals.

Awarded national license

for 2.3 GHz frequency in

2010

Iroko

Partners Digital entertainment

provider based in Nigeria.

Founded by UK trained

Nigerian. Largest owner of

Nollywood movie rights

and one of the largest

Google partners in Africa

Ob

serv

ations

Insig

hts

• There is very little tertiary cable installed in rural areas, mobile phones largely used

for internet connectivity outside of major urban centers

• Six government ministries were successfully linked via an automated system, this

resulted in the exposure of payroll fraud and resulted in cost savings for the country

• Infrastructure: The gap between rural and urban infrastructure limits potential for

traditional ICT in rural areas, but there is opportunity in building mobile capabilities

• Policy: With government backing (this is currently lacking), huge successes in

transparency and efficiency are possible in Nigeria

Ob

serv

ations

Insig

hts

• By digitalizing and streaming Nollywood content on YouTube, Iroko reduced piracy

based views, distributed internationally, and developed a new revenue stream

• Internet and power is majority of Iroko expense despite labor intensity of business

• Producers only accept cash payment, have mistrust of profit sharing and equity

• Adoption: Socially driven online offerings serve as a gateway for ICT

• Exposure: There is an international appetite for Nigeria developed content

• Infrastructure: Power inconsistency and cost constraints almost every business

• Education: Potential to reduce mistrust of technology and counterparties

Case Study: Paga- Overview

Services

Overview: Platform agnostic mobile payments provider in

Nigeria, distribution is via Paga Stars agent network

(target to bring on 5,000 agents by Q3 2011)

Evolution: Founded in 2009, provisional launch in 2011

as part of Central Bank of Nigeria trial

Funding: Funded by founders, venture capital (Tim

Draper-US), and Goodwell West Africa Microfinance

(Goodwell Investments & Alitheia Capital)

Users: 9,000 unique users as of early 2011 (just post

launch under provisional license.) Target to register 15M

active users and reach 40M Nigerians (3 dependents for

every customer reached)

• P2P payments: Payment transfers to other Paga customers via

mobile phones. Domestic transfer service not offered by Western

Union type offerings

• Bill pay: Payment via mobile phone under exclusive vendor

relationships (Ex. DsTV)

• Cash transfer to mobile credit: Dedicated agent network to

transfer cash to Paga credit

• Mobile phone top up: Exchange Paga credit for mobile phone

and internet credit

• Online payment/transfers: Online portal to transfer funds

between bank accounts and Paga account. Transfer funds to

vendors and individuals online via Paga

Nigeria Mobile Payments Context

• 16 providers at various stages of development/funding issued

provisional licenses by the Central Bank of Nigeria in January 2011

• Central Bank of Nigeria expected to issue permanent licenses to

four mobile payments providers in May 2011, this has since been

pushed back to an unspecified date to allow more time for providers

to test their networks

• Unofficial feedback from the market is that Paga is the most

technically competent provider, however other providers have

stronger relationships in government

page 15

Case Study: Paga- Contributions to scale ICT

Lowers counterparty risk via

secure and convenient

transactions

• Security via lower dependence on cash and greater transparency:

Limits upside to theft and enables payers to track expenses

• Transaction convenience via instant payment: Enables commerce

across distances, accurate money transfer, and fast transaction time

Extends alternative financial

services to the “un-banked”

• Gateway for banking services: Initial payment service mimics current

activity, serves as a stepping stone towards greater utilization of

financial services (lending, savings, investment)

• Greater visibility into consumer needs: Increased data availability

Extends opportunities in

eCommerce down the pyramid

• Online/mobile payments democratize eCommerce: Pushes access

to the 80-90% of Nigerians that are not banked

• Opens up new customer base to online vendors: Expands

addressable market size for vendors (increases value of online assets)

Challenges

• Infrastructure issues raise cost of operation:

• Consistent power not available via utilities, Paga requires a

diesel generator to power operations at a cost of $800 per week

• Internet cost high relative to other geographies ($200-300 for

basic unlimited internet package)

• Physical site security required at all times

• Very limited access to capital in Nigeria: Only one tech focused fund

serves Nigeria, Paga leveraged international network for funds

• Limited regulatory transparency raises risk to operation:

Enforcement of licenses unclear, timing of licenses and evaluation

criteria not made public

page 16

Hierarchy of ICT Needs: Morocco

Hierarchy of ICT Needs: Morocco

page 17

Illustrative quote:

“We don’t compare ourselves to the rest of Africa, we compare

ourselves to the rest of the World” – Moroccan ICT expert

Roadblocks Pathways

1

2

Limited exposure to sub-Saharan Africa: Limits

extent to which Morocco serves as a continental leader

and scope of market access for domestic tech

companies

Knowledge exchange events in sub-Saharan Africa: Use

education as a means to open up markets and support other

African countries International partnerships and engagement in continental

symposiums: Leverage opportunities for in person meetings with

potential partners

Lack of research and development

commercialization: Top talent largely in Universities

with limited ability to commercialize technology

Lower barriers to University researcher participation in

upside to commercialization: Leverage Silicon Valley and

Israel models to tech research acceleration

3

Opportunity for greater exposure of top technology

talent to non-Africa innovation hubs: Current

exchange programs limited to only a few participants

(ex. Only 20 in South Korea exchange)

Expand exchange programs to include greater diversity of

Morocco (age and sector) and increase number of people

who are able to attend

4

Limited utilization of technology by broad

population beyond basic services: Adoption in

schools still in transition period with some push-back

from teachers. Few popular organically developed

websites. Limited use of mobile and purely online

payments.

Increase familiarity with technology at a young age: Provide

continued support to educational initiatives (ICT as a right not a

privilege)

Provide greater support to very young, innovative

companies: Offer stepping stone incubators to support

companies not yet prepared to enter techno-parks

Morocco roadblocks and pathways

page 18

Insights from firms on challenges to growth - Morocco

page 19

Casablanca Technopark

Provider of space, education,

and back office services for

~150 Casablanca based tech

companies. Founded by

Ministry of Commerce,

Industry and ICT

Al Akhawayn University

Independent University that

offers research and technology

focused concentrations.

Funded by King Fahd of Saudi

and King Hassan II of Morocco.

Has an annex in the

Casablanca Technopark

Rabat Technopolis

Science park for engineering,

high tech, education, and

R&D focused enterprises.

Founded by the government

of Morocco.

Ob

serv

ations

Insig

hts

• Businesses in the Technopark benefit from co-located travel services, printing, health

services, and postal services; also benefit from shared utilities, insurance, and space

• Visible examples of success emerged from the Technopark. Ex: First Mile Telecom,

Arcanes Technologies, Mobilinfo, Al Hambra Design, and Axentis Group

• Co-location of businesses has enabled collaboration among “residents”

• High operational costs: Shared spaces/incubators lower cost of operation

• Exposure/Education: More youth likely to pursue technology when there is high

awareness of upside of a tech career and spaces to explore the interest

• Networks: Domestic proximity of companies enables scale through collaboration

Ob

serv

ations

Insig

hts

• Classes are taught in English and international exchange programs are part of the

curriculum, students show a facility with interaction with foreigners

• Executive program annex located in the Casablanca Technopark among medium and

small enterprises

• Exposure: Interaction and experiences abroad at a young age encourages global

collaboration and scale in the future

• Education: Proximity to corporations enables more tailored education and increases

the likelihood that tech managers will pursue advanced skills training

Ob

serv

ations

Insig

hts

• Technopolis divided into six “poles of operation”: Research, Development,

Microelectronics, Media, Off-shoring, and Academics

• Domestic and International success stories have leveraged the Technopolis. Ex:

Nemotech Technologie, EDS-HP, Cleanroom, and Alcatel

• Networks: Clear external communication of capabilities and co-location of

complimentary initiatives enables greater collaboration

• Exposure: Visibility of success stories and proximity of domestic companies to

international leaders raises profile of local companies and boosts knowledge sharing

Case Study: Casablanca Technopark- Overview

Services

Overview: Provider of clustered space, education, and

services for technology focused small and medium sized

enterprises

Evolution: Founded in 2001, supervised by the Ministry of

Commerce, Industry and ICT

Funding: 65% of funding from private Moroccan banks

(AttijariWafa Bank, BMCE Bank, La Banque Centrale

Populaire, Banque Commerciale du Maroc, La Caisse de

Depot et de Gestion); 35% funded by the Moroccan

government

Users: ~170 small and medium sized technology focused

enterprises (PME), some satellite government offices

(customs, tech), executive education program of Al

Akhawayn University

• Space provision: secure, single and multi-office sites for

companies, conference facilities, and social areas for residents

• Back office administration for residents: dedicated offering

includes for residents includes a travel agency, copy/print center,

post office, multiple banks, insurance, web hosting, fidelity cards

(preferred pricing at businesses) and utilities

• Information distribution: blog and newsletter format to inform the

Maroc tech community about conferences, positions, classes, and

innovations

• Education: home of Al Akhawayn executive education center, and

venue for debate and tech classes. Sample classes include Java

development, network administration, community management,

and entrepreneurship

• Community events: offers annual events outside of Casablanca

(Oujda, Meknes, and Agadir) to extend discussion of technology

across the country

Sample Residents

• Innosoft

• ThinLine

• Vigeo Group

• Isis Market

• Bull Maroc

• Axentis Group

• Parnet

• Intechno

• Just Ask

• Techma Maroc

• Al Akhawayn University

• Arcanes Technologies

• Synergy Formation

• Netcom Technologies

• Wind International

• Prima Group Afrique

• IT Skills Services

• P2P Solutions

• XPI (Expanded Payment)

• Irsal Solution

• Kosinux

• FTZ Maroc

• ArtMag

• Amexs

• Algortech

• Geoconseil

• Infoone

• Adelo Services

• Willnet

page 20

Case Study: Casablanca Technopark- Contributions

to scale ICT

Lowers the risk and cost of doing

business

• Shared services: Utilities, travel, printing, facility administration,

connectivity, security, and information

• Co-located enabling functions: Post office, travel agency, health

services, fidelity card, and web presence services

Provides education and exposure

• Central venue for education: Three classroom spaces used by

residents and outside organizations for tech education

• International tech event organization and knowledge sharing:

Venue for startup weekend, offers national education with Numeric

Facilitates collaboration with

other PMEs and MNCs

• Grouping and social events for residents: Collaboration and

knowledge share fostered via resident diversity and grouping

• Proximity to MNCs and Offshoring hubs: Location near tech MNC’s,

Casa Nearshore, and airport lowers barriers to access for PMEs

Challenges

• Services for very early stage startups: Limited tools for very small

companies (TPEs), activities confined to one off events

• R&D hub partnerships for commercialization: Limited partnership

with one university, opportunity to become more of an R&D hub

page 21

page 22

Common continental challenges

Democratic

Republic of

Congo

Central African Republic

Côte d' Ivoire

Cameroon

Djibouti

Algeria

Egypt West Sahara

Eritrea

Ethiopia

Gibraltar

Equatorial Guinea

Guinea-Bissau

Kenya

Libya

Morocco

Mauritania

Niger

Nigeria

Sudan

Sierra Leone

Senegal

Somalia

Sao Tome and Principe

Chad

Tunisia

Uganda

Angola

Burundi

Botswana

Rep. Congo

Gabon

Gambia

Guinea

Lesotho

Mada-

gascar

Malawi

Mozambique

Namibia

Rwanda

Swaziland

Tanzania

South Africa

Zambia

Zimbabwe

Benin

Liberia

Comoros

Seychelles

Mayotte

Burkina Faso

Mali

Togo

Ghana

Infrastructure consistency (high cost of operation)

Exposure lacking (international and domestic)

Digital literacy lacking

Cost of hardware high, mobile as a gateway

Fraud and transparency limiting credibility

• Power consistency: largely an issue in Kenya and Nigeria, requires redundancies

(generators) and added expense for maintenance

• Security requirements: high physical and virtual security needed

• Pathways: incubators/shared services, role for government as a change agent

• International exposure: leaders of most firms that scale have international

education/exposure. Need exposure to innovations, markets, and funders

• Domestic exposure: in relationship based societies, tech pros least connected

• Pathways: expert exchange, international competitions/challenges, forums

• Addressable market small: consumers not able to adopt advanced applications of

ICT without understanding, this shrinks the ICT market

• Staffing a challenge for ICT firms: top talent expensive, trend to hire from intl.

• Pathways: digital literacy in public education, subsidized forums, certifications

• Low internet penetration: Cost of connection high especially in rural areas

• Full powered hardware beyond reach: Low GDP/capita limits ability to spend

• Pathways: with growing capability of mobile, this has emerged as a gateway

• Piracy, fraud, and theft rampant: Outdated DVDs lack protection, lack of digital

security, cash based societies boosts benefits to theft

• Some corporations lack transparency: Manual accounting, succession issues

• Pathways: ERP systems integration, streaming/cloud based content delivery,

boosted utilization of online screening and digital ID, online/ mobile payments

Next steps

page 23

• Identify focus areas for each constituent (e.g., WB, AfDB,

infoDev)

• Prioritize initiatives for implementation

• Conduct in-depth case study review

• Refine cross-team recommendations

APPENDIX

page 24

ICT

Infrastru

cture

1 2 3 4 5

Utilities

Internet

Infra-

structure

Security

Daily power

interruptions,

high cost to

consistency

Weekly power

interruptions,

relatively high

cost to

consistency

Monthly power

interruptions,

some cost to

consistency

Very few power

interruptions,

availability in line

with demand

Very few power

interruptions,

supply above

demand

Access only via

satellite

technology

Cable access

with less than 1

Tb/s capacity

Cable access

with less than 5

Tb/s capacity

Cable access

with less than 10

Tb/s capacity,

and more than

three carriers

Cable access

with greater than

10 Tb/s capacity,

and more than

three carriers

Infrastructure

subject to theft

or sabotage to a

point that

development is

prohibitively

expensive

Infrastructure

subject to theft

or sabotage to a

point where

development is

expensive

Infrastructure

under realistic

threat of theft or

sabotage

Infrastructure

relatively safe,

not vulnerable

Infrastructure not

vulnerable to

threats of theft or

sabotage

Appendix: ICT hierarchy classification (Infrastructure, 1/8)

page 25

Environ

ment

1 2 3 4 5

Level of

govern-

ment

support

for ICT

Educ-

ation

Demo-

graphic

consider-

ations

Dedicated

agency for ICT

regulation and

implementation

National strategy

in place with

support from

ministry and

broader federal

government

Funded national

strategy for ICT

with broad

federal support

Execution of

national strategy

and partnerships

with local ICT

Execution of

successful

national strategy

and partnerships

with local ICT

Low level of

broad based

education (less

than 4 years

mean schooling),

no access to ICT

in public schools

Moderate level

of broad based

education (4-6

years mean

schooling), no

access to ICT in

public schools

Moderate level

of broad based

education (6-8

years mean

schooling), some

access to ICT in

public schools

High level of

broad based

education (8+

years mean

schooling),

access to ICT

and some digital

literacy training

in public schools

High level of

broad based

education, digital

literacy training

the norm for

students in

public schools,

ICT integrated

into instruction

GDP per capita

< USD 1,500

GDP per capita

< USD 3,000

GDP per capita

< USD 10,000

GDP per capita

> USD 10,000,

urban population

< 50%

GDP per capita

> USD 10,000,

urban population

> 50%

Appendix: ICT hierarchy classification (Environment, 2/8)

page 26

Accessi

bility

1 2 3 4 5

Shared

technol-

ogy

services

Negligible

access to shared

technology in

schools, public

spaces, or

private

enterprises

Some access to

shared

technology via

schools, public

spaces, or

private

enterprises (ex.

Internet cafes)

High access to

shared

technology via

schools, public

spaces, or

private

enterprises (ex.

Internet cafes)

that is expensive

High access to

shared

technology via

schools, public

spaces, or

private

enterprises (ex.

Internet cafes)

that is

inexpensive

High access to

shared

technology via

schools, public

spaces, or

private

enterprises (ex.

Internet cafes)

that is

inexpensive and

reliable

Appendix: ICT hierarchy classification (Accessibility, 3/8)

Mobile

phones

Internet

Internet

penetration

< 15%

Internet

penetration

< 30%

Internet

penetration

< 50%

Internet

penetration

< 75%

Internet

penetration

> 75%

Mobile

penetration

< 15%

Mobile

penetration

< 30%

Mobile

penetration

<50%

Mobile

penetration

<75%

Mobile

penetration

> 75%

page 27

ICT

enabled

private

sector

1 2 3 4 5

Reach of

banking

Use of

tech by

SMEs

Banked

population less

than 30%

(mainstream

banks and

alternative

channels)

Banked

population is

30% to 50% of

total population

(mainstream

banks and

alternative

channels)

Banked

population is

50% to 70% of

total population

(mainstream

banks and

alternative

channels)

Banked

population is

70% to 80% of

total population

(mainstream

banks and

alternative

channels)

Banked

population is

greater than

80% of total

population

(mainstream

banks and

alternative

channels)

Most

transactions,

inventory,

accounting,

logistics, and

payroll

completed

manually

Most

transactions

inventory,

accounting,

logistics, and

payroll

completed

manually with

some use of

spreadsheets

and POS

systems

Transactions,

inventory,

accounting,

logistics, and

payroll

completed using

spreadsheets

with some use of

database and

ERP/ POS

functionality

Transactions,

inventory,

accounting,

logistics, and

payroll

completed using

POS and ERP

systems that are

not fully

integrated

Transactions,

inventory,

accounting,

logistics, and

payroll

completed using

POS and ERP

systems that are

fully integrated

Appendix: ICT hierarchy classification (ICT enabled private

sector, 4/8)

page 28

Content

develop-

ment

1 2 3 4 5

Domestic

website

develop-

ment

Domestic

content

output

Domestic

innovation

Very few

developers,

0 domestically

developed

websites in top

20 sites

Some web

developers,

at least 3

domestically

developed

websites in top

20 sites

Many web

developers,

at least 2

domestically

developed

website in top 10

sites

Many web

developers, at

least 4

domestically

developed

website in top 10

sites

Many web

developers, at

least 1

domestically

developed

websites in the

global top 20

sites

Largely informal

content output,

little use of the

internet to

disseminate

information

Largely informal

content output,

high use of

forums, blogs,

and social

networking sites

to disseminate

information

Some reliable

formal content

output through

dedicated

channels

High output and

reliability of

formal content

via dedicated

channels

High output and

reliability of

formal content

via dedicated

channels for

international

audiences

Little innovation

in software and

hardware, high

dependency on

platforms

developed

internationally

Some innovation

in software and

hardware, high

dependency on

platforms

developed

internationally

High innovation

in software and

hardware, some

dependency on

platforms

developed

internationally

High innovation

in software and

hardware, low

dependency on

platforms

developed

internationally

High innovation,

domestically

produced

platforms

develop for

international

audiences

Appendix: ICT hierarchy classification (content development,

5/8)

page 29

Content

export

1 2 3 4 5

Global

use of

inno-

vations

from

country

Negligible

international

consumption of

domestically

developed

innovations

Some

international

consumption of

domestically

developed

innovations,

largely focused

on content rather

than platforms

Some

international

consumption of

domestically

developed

innovations,

focused on

platforms and

content

to consistency

Moderate

international

consumption of

domestically

developed

innovations,

focused on

platforms and

content

High

international

consumption of

domestically

developed

innovations,

focused on

platforms and

content

Appendix: ICT hierarchy classification (content export, 6/8)

page 30

BPO

1 2 3 4 5

Speciali-

zation of

tech

enabled

functions

Destina-

tion as a

special-

ized

global

provider

Negligible

specialization of

business

functions

Some

specialization of

business

functions, largely

isolated to one-

off projects

Moderate

specialization of

business

functions,

including

outsourced ICT

advisory, and

administrative

functions

High

specialization of

business

functions,

including

outsourced ICT

advisory,

external support

of logistics, and

administrative

functions

Level 4 AND

customer

communications,

and consistent

engagement with

external experts

on business

processes

Negligible BPO

service provision

to international

companies

Moderate BPO

service provision

to international

companies, but

highly

fragmented

Moderate BPO

service provision

to international

companies,

some off shoring

clusters, typically

a secondary

source for

international

companies

High BPO

service provision

to international

companies,

some off shoring

clusters, a

primary source

for some

international

companies

High BPO

service provision

to international

companies,

several off

shoring hubs, a

primary source

for many

international

companies

Appendix: ICT hierarchy classification (BPO, 7/8)

page 31

ICT hub

1 2 3 4 5

Appendix: ICT hierarchy classification (ICT hub, 8/8)

Global

desti-

nation

for R&D

HQ

location

for scale

tech

comp-

anies

Global

leader

Negligible tech-

focused research

and development

in country

Some tech-

focused research

and development

in country, little

means for

commercialization

Moderate tech0

focused research

and development

in country,

moderate

commercialization

High tech-

focused research

and development

in country, high

commercialization

High tech-focused

research and

development in

country, high

export of research

and development

to global markets

No scale tech

businesses in

country (> USD

20M turnover)

Less than 5

scale technology

businesses in

country

More than 5

scale technology

businesses in

country

More than 5

scale tech

businesses, total

turnover of all

technology

companies

greater than

USD 5 Bn

More than 5

scale tech

businesses in

country, total

turnover of tech

companies >

USD 8Bn

Negligible

international

recognition as a

tech innovator

Some

international

recognition as a

tech innovator,

largely via

commercial

success

Moderate

international

recognition as a

tech innovator,

via commercial

and innovation

success

High international

recognition as a

tech innovator,

via commercial

and innovation

success

High global

recognition as a

tech innovator,

via commercial

and innovation

success. High

knowledge

sharing

page 32