East African region is the key arena for Africa IT industry

Posted on October 5, 2013 07:33 am

Mobile devices have arguably become more important than web and in the future will be a lot more important. In Africa, mobile is moving faster than anything else that has led to a joke that for the first time in history of the continent, mobile phones will surpass human population in the next five years. Corporate websites in Africa are seeing more than half the traffic coming from mobile, hence creating the need for responsive design and mobile applications. Africans as individuals are absorbing mobile technology as fast as anybody on the planet. Individual countries have not been left behind and some are miles ahead when it comes to mobile technology and one is Kenya, the home of mobile money transfer platform M-Pesa that loosely translate to mobile M-Money. Research shows that Kenya is already home to some innovative associations and organizations within the Information and Technology arena in Africa.  With strong links to multi national IT companies like IBM, Samsung, Nokia, General Electric, Google among others have defined Kenya objectives and they include growing the IT industry through their proposed techno city called Konza city and broadening the country’s economic base. In addition the country has had a boost in entrepreneurial activity including the Nairobi based iHub an entrepreneurial group that focuses on the Kenyan capital’s start-up scene and silicon savannah.

However, the Kenya plan unlike some other African countries has not been about replicating the famous Silicon Valley in the United States but the country has all the ingredients to become a unique country hosting a hub of activity with “American mentality” in the most techno savvy country in Africa after South Africa. The country has one of the most dynamic locations in Africa and Nairobi has already been touted as the fastest growing technology capital in Africa. What has separated the tech laggards with the likes of Kenya, South Africa and Nigeria varies depending on the government commitment, investors confidence, cost advantages, innovation that drive individual country’s growth, countries’ needs and infrastructure development major growth engines. A research conducted few months ago revealed that East African region is seen as playing an important role for the future of information technology in Africa. The region’s technology leader Kenya has become a key IT landscape for the industry in the African market hence creating opportunities to neighboring countries like Tanzania and Uganda as multi nationals are choosing them for their proximity to their Kenyan capital where most of them have set up their sub Saharan African head offices. East Africa’s lead in technology arises from its human cost advantage, and Kenya’s led innovation that differentiation makes it an ideal candidate for playing a dominant role in the continent’s Information and technology industry.

Statistics shows that East Africa has contributed to more than a third the continent’s economic growth in the period following the global financial crisis of the 2008-2009, and one of the contributing factors to this success has been the significant and sizeable growth of the Information and Technology industry of these economics led by mobile money transfer services being offered in all east African community member states of Tanzania, the most populated, Kenya, Uganda, Rwanda and recently in Burundi. Keen watchers of the region will no doubt agree with me that the world leading brands are taking note of the growth and the future potential of the East African region. A key driver for this rising significance is the role this Uganda, Rwanda, Kenya and Tanzania are playing in Africa’s Information and Technology landscape. It is estimated that the region caters to more than half of the continent demand for IT related products and services and Kenya accounts for close to half the market followed by Tanzania and Uganda. Undoubtedly, Rwanda has emerged as the next big destination for multi nationals seeking expansion and growth and has significant market shares of the IT business compared to its southern neighbor backwater Burundi. Another research carried out last year showed that East African region has become the main consumer of IT and IT-enabled services in the whole of Africa excluding South Africa. Mature economies like Nigeria, Angola and economic powerhouse South Africa have increased their consumption of IT to improve their competitiveness and maintain economic efficiency but as a region, the East African sisters are miles ahead.

Information technology in East Africa is on the rise both in terms of demand and consumption due to ballooning population expected to hit 200 million people by the year 2050, and the expected economic windfall due to recent discoveries of commercially viable oil and gas in Uganda and Tanzania respectively. There is also the social development of the region that is expected to accelerate growth in IT-related business in manufacturing, exports and services. It is estimated that the East African IT industry will grow from US$10 billion today to a size of $150 billion by 2022. This growth will be led by increased demand from technology convergence such as ‘big data’ and the ‘Internet of Things’ as I had said http://www.idgconnect.com/blog-abstract/3178/-internet-things-expected-drive-mobile-data-uptake and social and economic pressures resulting in new ways of consuming IT by East Africans. Me think that governments across the region need to leverage IT to achieve key objectives that include achieving their economic blue prints, developing and creating the most efficient governance systems that will provide basic necessities to the East Africans. For example IBM is working on a traffic management project in Nairobi that will help ease congestion in the region’s main economic hub.

As Ugandan President Yoweri Museveni remarked during his state of the nation address few months ago, increased spending in IT will create the most competitive private sector that can challenge rivals in main markets and add an economy’s overall competitiveness and growth. In Kenya, the Uhuru Kenyatta’s led government has placed the infrastructure as one of its key driver in growth and needs in the region are set to rise with proposed Kenya-Uganda- Rwanda railway. East Africa could require up to $1 trillion of new infrastructure investment in the next decade to support the current levels of economic growth. In the current environment, there is a once in a lifetime opportunity to leverage existing and future infrastructure and developments like the proposed oil refinery in Uganda, oil pipelines connecting Kenya, Uganda, Rwanda and South Sudan to have the most significant impact on the future of the East Africa. The current developments could bring East African region into an age of prosperity, shedding ancient old poverty levels. In terms of workforce and skills, the region’s universities led by prestigious and world famous Makerere University located in Wandegeya area of Kampala, University of Nairobi, Kenyatta University and Strathmore university in Kenya and Dar Es Salaam university will provide top training by renowned researchers and professors in IT. Businesses and start-ups in the region have an opportunity for private industry to fill the gap in the IT where advances in computing are underpinning some of the greatest advances for improving health care, cost savings and patient outcomes in Tanzania and Uganda.

A UK based pharmaceutical company conducted a research that proved beyond any reasonable doubt that East African region is ripe for innovation in health informatics and in other areas where IT can be of benefit to the health sector. Tanzania’s Muhimbili University, Kenyatta National Hospital in Kenya and the legendary Mulago hospital in Uganda among others have been commencing innovative research projects that have significant impact in the region. This has paved way for collaborative opportunities with IT industry, which has created jobs and economic benefits to the communities living in those countries. A properly planned research collaboration between the regional universities, hospitals and the private sector can be created to facilitate a prosperous precinct with technology innovation at its core, ensuring the East African countries are at the forefront of the digital economy in the African region. East African countries are in my thinking going to have tremendous infrastructure at their disposal to enable the IT industry to flourish, including the light rail connecting Kenya coastal city of Mombasa with Kampala and Kigali with its future proposed connection to the heavy rail. I cannot fail to acknowledge the national broadband networks that are being constructed with others already commenced on the main cities like Dar Es Salaam, Arusha, Nairobi, Mombasa, Kisumu, Kampala, Entebbe and Kigali key areas among others. After sharing how the region can prosper and set standards for other regional economic blocs http://www.contadorharrison.com/regionalization-strategy-for-east-african-community/ I can confidently say that from now henceforth, a critical mass of technology innovation will be created in the region by growing the IT industry. This could be achieved much faster by fostering entrepreneurial start-ups in Kampala, Nairobi, Kigali, Bujumbura and Dar es salaam which will tackle the next generation of challenges emerging in an ever changing digital environment.

Contador Harrison