In certain types of innovation, Africa also leads the world
According to a
BCG study into mobile payment banking, Kenya and Ghana have the second and third highest mobile payment usage after China, demonstrating Africa’s enormous potential. Mobile transactions account for 87% of Kenya’s GDP and 82% in Ghana.
To put this in context, the African mobile payment market could have 850 million customers by 2025, which is 100 million more than Europe’s total population.
The big question is why, despite a large young population and mineral resource wealth, does Africa continue to trail the rest of the world in its development?
Tech-enabled SMEs could power the continent’s growth
One of the solutions to driving Africa’s economic development could lie in the small and medium enterprise (SME) sector. SMEs have the potential to support development by creating jobs and driving economic growth. The burning question is: why are African SMEs so slow to adopt and leverage technology?
African businesses – and SMEs in particular – face significant challenges that include lack of access to capital, specialised skills, raw materials, and markets.
A lack of adoption of new technologies is causing several issues for Africa’s SME sector, ranging from poor planning, a lack of forecasting capability, and lack of capacity to leverage the efficiency gains of artificial intelligence and machine learning. These issues must be addressed if we are to unleash the next generation of African business success stories.
Although technology is not the only answer to the question of building world-class competitive African businesses, it is one of the most accessible solutions to many of the challenges that businesses face.
Returning to the mobile payment banking example, this innovation was the result of a clever use of technology to address a fundamental challenge in both Kenya and Ghana: a lack of banking infrastructure.
Digital supply chains and business network solutions could unlock access to new markets for raw materials or finished products. Innovative use of technology – like what we’ve seen with mobile banking – could solve immediate challenges stunting SMEs’ growth and unlock a new wave of innovation across the continent.
Even though Africa continues to face numerous and complex challenges, there is no denying that the continent is brimming with possibilities. The time is now for African businesses to leverage technology as a strategic resource to fuel innovation and growth.
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By Dumisani Moyo, the Marketing Director at SAP Africa. He is an avid scholar in technology, leadership, diversity, and sustainability. Dumi has extensive experience in technology and a Master of Philosophy Degree in Business Management with a specialization in Responsible Leadership.