After a week of business meetings in the cities of sub-Saharan Africa, Eric Schmidt posted a detailed list of observations. As he used to run Google and is still on their board, I’ll give him a bit more credit than others who might want to opine after a week’s exposure to the continent’s dynamism.
Eric starts with 3 positive major trends:
- the despotic leadership in Africa from the 1970s and 1980 is in decline, replaced by younger and more democratic leaders
- a huge youth demographic boom is underway, with a majority of the population of 25, or even under 20
- mobile phones are everywhere, and the Internet in Africa will be primarily a mobile one
And then he lists 10 observations that many of us already see, but its great to have validation from a global business leader:
- Many of the older problems are still severe, including a lack of electric power, the general trend of rural to urban migration, and pervasive corruption. Every country we visited had an internal security problem, or a significant border problem, and the elites are sheltered from this pervasive concern behind guarded walls, hotels and restaurants with gates and security checks, and ubiquitous guards. I try to imagine what the US would be if we had the types of security problems in Africa.. how would WE deal with such threats?
- Connectivity is much more important for security than many analysts think. Societies who are not connected lack opposing viewpoints and are much more subject to easy radicalization. The virtue of having more connectivity is that people will have more choices, and more choices lead a better understanding of the value to go to school, the need to treat women equally, the choice to not demonize others, etc.
- Nairobi has emerged as a serious tech hub and may become the African leader. A combination of relatively stable politics, the British legal system, and a benign climate seem to attract a significant share of foreign investment. Incubators are hosting potential solutions to many problems, including connecting M-Pesa (their mobile money solution on simple phones using SMS) with payment systems for local stores. If they manage to get through the upcoming March elections without significant conflict, they will grow quickly.
- Rwanda is a jewel with a terrible past. High economic growth and the development of a significant middle class is threatened by the withdrawal of aid due to UN complaints over the Congo. Rwanda feels like Singapore, an island inside of Africa whose small size allows great focus and a dynamic, stable government. A visit to the Genocide Museum in Kigali, and a trip to the Volcanic National Park where eight groups of eight can trek to see the gorillas made famous by Diana Fossey, are well worth it. Gorilla treks are also available through Uganda and the Congo, over the same mountains.
- After fifty years of war, South Sudan is the worlds newest country. In a country where every issue is an urgent one, mobile networks can unify a poor country with isolated villages, significant flooding in the rainy season, and the constant threat of attacks from rebels from the north. A courageous group, the Satellite Sentinel project. uses satellite data and other sources to document ethnic cleansing in remote areas of Sudan (the northern Sudan) and serve as a record of the terrible ongoing violence against innocents.
- Chad is a poor petro-state, with a long history of conflict and one pipeline and one fiber link. Africa has submarine fiber cables on the west and eastern side. Landlocked countries are at the mercy of their neighbors, and all have learned that competition with multiple fiber connections from differing borders dramatically reduces costs. Chad like some others, has determined that future spectrum should not be auctioned as that only increases the eventual mobile costs and are simply allocating it to a set of competitive carriers. Less than 1% of Chad has electricity.
- Nigeria, known as a land of oil corruption and the ubiquitous 419 email scams, is the biggest surprise to a first time visitor. Nigerians are entrepreneurial, stylish, educated, and have the belief that their country can emerge as the next Brazil. With 170 million citizens, and a record breaking eleven years of civilian elected government, the compound growth and the shared memory of real internal conflict almost guarantees their short term success. Future growth of Nigeria should help with its international image problem, as the real story of its success gets out.
- The emergent model of the African internet is a set of competitive fiber suppliers to the capital, a set of fiber rings owned by local telco’s, and 3G and 4G networks. Some of the countries are late with licensing plans for 3G and 4G, a costly delay for countries that have very little residential broadband. Solar charging can help with the power needs of handsets, but the electricity needs to be more reliable or costly backup systems will be built at each tower. Many of these countries have telecommunications as a major contributor to their GPD (Cote d’Ivory is about 12%) and even Somalia, which we did not visit this time, has a profitable competitive telecommunications industry.. the most profitable legal industry in that country. Some countries are reluctant to turn on the data portion of their telecommunications industry, another costly delay to their future digital commerce, education and entertainment industries.
- Many Africans will be last, unfortunately, to be connected to the rest of us. For them, the best short term outcome will be feature phones (inexpensive voice and SMS phones) and a private network of microSD cards that can be traded behind oppressive authorities to get information in and out of trapped, occupied and remote locations. Information is power, and more information means more choices. Documenting abuses, getting pressure from outside to fix real problems, and solving illiteracy are just a few functions of even the most limited of feature phones.
- The demographic dividend in Africa of young people is their greatest hope, in my opinion. Today high rates of unemployment show an economy underperforming to its true potential. This new generation expects more, and will use mobile computing to get it. Optimism is appropriate for Africa, as the people we met will do much more with less than we can imagine, and the devices and systems built in the first world will be used in the most creative ways in the emerging new world of Africa.
What do you think? Did he capture the continent in a week of trips and 10 observations? What might he be missing?