Africa 2.0: Inside a continent’s communications revolution 9781526154835

Table of contents :
Front matter
Contents
List of illustrations
Acknowledgements
Abbreviations
Introduction
Part I: Technology diffusion: the spread of mobile calling and internet
Prologue (1986–2004)
Mobile voice calling booms (1993–2004)
Bandwidth as the digital economy’s fuel: getting sub-Saharan Africa connected (1991–2015)
Cheaper mobile internet and low-cost smartphones come together with apps sub-Saharan Africans want to use (2005–18)
Part II: Technology influences: uses, behaviours and abuses
Mobile money: from transferring cash by SMS to a digital payments ecosystem (2000–20)
Sub-Saharan Africans start to live the digital life (2000–20)
Sprinkling on the magic dust: digital’s impact on development (1982–2020)
The ugly underbelly of the communications revolution: corruption, cronyism, regulation and government (1999–2020)
Part III: Taking the long view: start-up innovation and complex behaviour change
Sub-Saharan African start-ups: getting beyond the hype to address deep market challenges (1995–2020)
Doing complexity: making sense of what has happened over thirty-five years
Appendix A: Glossary
Appendix B: List of those interviewed
Select bibliography
Index

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Africa 2.0

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Africa 2.0

Inside a continent’s communications revolution Russell Southwood

Manchester University Press

Copyright © Russell Southwood 2022 The right of Russell Southwood to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. Published by Manchester University Press Oxford Road, Manchester M13 9PL

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www.manchesteruniversitypress.co.uk British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN  978 1 5261 5481 1  hardback ISBN  978 1 5261 5482 8  paperback First published 2022 The publisher has no responsibility for the persistence or accuracy of URLs for any external or third-party internet websites referred to in this book, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

Cover design: Hollis Duncan Typeset by New Best-set Typesetters Ltd

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Contents

List of illustrations page vii Acknowledgements viii List of abbreviations x Introduction 1 Part I:  Technology diffusion: the spread of mobile calling and internet Prologue (1986–2004) 15 1 Mobile voice calling booms (1993–2004) 19 2 Bandwidth as the digital economy’s fuel: getting sub-Saharan Africa connected (1991–2015) 48 3 Cheaper mobile internet and low-cost smartphones come together with apps sub-Saharan Africans want to use (2005–18) 83 Part II:  Technology influences: uses, behaviours and abuses 4 Mobile money: from transferring cash by SMS to a digital payments ecosystem (2000–20) 5 Sub-Saharan Africans start to live the digital life (2000–20) 6 Sprinkling on the magic dust: digital’s impact on development (1982–2020) v

109 133 157

Contents

7 The ugly underbelly of the communications revolution: corruption, cronyism, regulation and government (1999–2020) 193

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Part III:  Taking the long view: start-up innovation and complex behaviour change 8 Sub-Saharan African start-ups: getting beyond the hype to address deep market challenges (1995–2020) 9 Doing complexity: making sense of what has happened over thirty-five years

219 249

Appendix A: Glossary 272 Appendix B: List of those interviewed 274 Select bibliography 278 Index 281

vi

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List of illustrations

Map 1 Sub-Saharan African countries and their fibre networks (Source: CC-BY 4.0 Attribution-only licence by Steve Song)

page 13

Figure 1 Uneven and incomplete implementation of regulatory reform (Source: Connecting Sub-Saharan Africa, World Bank, 2004)

vii

42

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Acknowledgements

I would like to thank my wife, Sara Selwood, who is both my best friend and co-conspirator, and my daughter Rose Allen-Cleary (who was Balancing Act’s first employee), and my two granddaughters, Betty and Moira. The future is female. I should also like to acknowledge the work done by all my employees, including Anita Borvanker, Mapara Syed, Isabelle Gross, Selma Faria, Ilona Sagar, Ashia Khatoon, Sylvain Beletre, Matthew Dawes and, last but very much not least, Alice Saywood. A special thanks to Sara Selwood and my friend Kelly Wong, who agreed to be my editors, and to the following people who went out of their way to spend time above and beyond the call of duty in answering my questions or providing help, including: Arjuna Costa, Tidjane Deme, Jonathan Donner, Laurent Elder, Bridget Fishleigh, Jessica Hope, Steve Huter, Matthew Kentridge, Charley Lewis, Andile Masuku, Andile Ngcaba, Judith O’Neill, Steve Song, Tim Unwin and Jason Whalley. Thanks also to Professor Richard Rathbone, who taught me African History at the School of Oriental and African Studies, University of London. No list of acknowledgements would be complete without my profound gratitude to the staff of Guys and St Thomas’ radiotherapy departments for their kindness and professionalism and to my consultant, Dr Simon Hughes. In this case, ‘without whom this book would not have been written’ has a very direct and literal meaning. viii

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Acknowledgements

I’d like also to remember some of the people who did not get to see all the things that have and haven’t happened: Mark Bennett (on an operating table in Lusaka), Rick Beveridge, Matt Buckland (cancer), Marilyn Cade, Bev Clark (suicide), Bob Collymore (cancer), Astrid Dufborg (cancer), Carey Eaton (shot by robbers in Nairobi), Venancio Massingue, Teresa Peters (cancer), Miko Rwayatire (on an operating table in Brussels), Guido Sohne (causes unknown), Manny Texeira and Kai Wulff (plane crash). There were many others, but these friends and colleagues have stayed in my thoughts. Thank you too, to the people of the many countries of Africa who have changed how I understand the world.

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Abbreviations

AFD French Development Bank APC Association for Progressive Communication API Application Programming Interface B2B business-to-business BTC Botswana Telecommunications Corporation CATIA Catalysing Access to ICTs in Africa CCK Communications Commission of Kenya CEO chief executive officer COO chief operating officer CTO chief technical officer DRC Democratic Republic of Congo EASSy Eastern Africa Submarine Cable System Gbps Gigabits per second GISPA Ghana Internet Services Providers Association GPRS General Packet Radio Service GSM Global System for Mobile Communications GSMA Global System for Mobile Communications Association ICASA Independent Communications Authority of South Africa ICT information and communications technology ICT4D information communication technology for development IDRC International Development Research Centre IICD International Institute for Communication and Development ISP Internet Service Provider x

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Abbreviations

ITU International Telecommunications Union IXP Internet Exchange Point Kbps Kilobits per second M4D Mobile for Development Mbps Megabits per second MTN Mobile Telephone Network NEPAD New Partnership for Africa’s Development NGO non-governmental organisation NSRC Network Start-Up Resource Centre OS operating system OTT Over-The-Top P2P person to person PADIS Pan African Development Information System PIN Personal Identification Number RIA Research ICT Africa SMS Short Message Service SNO Second National Operator SPV Special Purpose Vehicle TEAMS The East African Marine System telco telephone company UK United Kingdom UN United Nations UNDP United Nations Development Programme UNHCR United Nations High Commission for Refugees US United States USAID United States Agency for International Development USSD Unstructured Supplementary Service Data VoIP Voice over Internet Protocol VSAT Very Small Aperture Terminal WACS West Africa Cable System WIOCC West Indian Ocean Cable Company WSIS World Summit on the Information Society

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Introduction

It’s hard to believe that in 1986 sub-Saharan Africa – in a much-quoted phrase – had less phone lines than Manhattan and that it could take two years or more to get a fixed line in many African countries. By the end of 2019, 45% of Africans had a mobile phone and 25% had access to mobile internet.1 This is the generation that skipped the use of geographically tied, fixed lines. Africa 2.0 is about sub-Saharan Africa’s communications revolution and the people who made it happen. It is a ‘first draft’ history that looks at the forces that drove and opposed these changes. It seeks to go beyond the hype, to understand what has happened in terms of mobile calling and the internet over three and a half decades. This is not a detailed book about telecoms and internet regulation, nor is it written to provide policy recommendations. It is about understanding what has happened since 1986. Framework to understand technology change This section outlines how the book deals with issues of technologies and change. Much of our understanding of these, particularly in the field of policy as it applies to sub-Saharan Africa, derives from thinking about ‘hardware’ – things that are easy to measure, such as the extent of fibre networks, the number of mobile and internet subscribers and how many jobs have been created. These are essential for generating and measuring 1

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Africa 2.0

change but are not necessarily manifestations of what has changed. In this rather inadequate analogy, it is the ‘software’ – the social interactions and behaviour – that are crucial to understanding what has happened. Parts of this book blend these things together. For example, Facebook and Google (see Chapters 3 and 5) are both economic and business forces, but they produce knowledge, culture and trivia, as well as any number of unintended consequences. Evaluations undertaken for the development sector often employ methodologies that involve versions of inputs, outputs and outcomes. The inputs indicate the assets applied to a project: for example, human and financial resources invested in a farmers’ information service which is accessible on a mobile phone. The outputs refer to what has happened: for example, the number of farmers who subscribed to the information service. The outcomes constitute the broader changes that the funding was intended to produce from the inputs and outputs. So, for example, the farmers changing their approach to growing more crops more efficiently.2 In this framework, the outcomes are the intended change generated by the inputs and outputs. This kind of instrumentalism is designed for practical purposes, as part of having goals to work to, accountability to comply with and learnings to be taken. But it suggests a rather narrow description of how people – in this instance Africans – live their lives. They have agency – things don’t just happen to them. Adopting technologies only affects particular aspects of their lives and the choices they make, however circumscribed these might be. It has been suggested that ‘Appropriation is the process through which technology users go beyond mere adoption to make technology their own and to embed it within their social, economic, and political practices.’ 3 This is usually something that happens over a period of years rather than months. There is a difference between this lengthier and less obvious uptake of technologies and the simpler measurements of ‘hardware’ being available. Therefore, the book deploys multidisciplinary sources. Seams of ethnography and anthropology provide examples of the distance between narrow ‘outcomes’ and life as it is actually lived. This work focuses on the emotional 2

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Introduction

connections between people, the social and cultural norms of family life and how these relate to the technologies under discussion. Development agencies, with instrumentalist agendas, have looked for virtuous interactions, including gaining knowledge from using the internet. However, its early adopters in sub-Saharan Africa were not necessarily looking for the rational information benefits that were driving the early ideas of a ‘knowledge society’.4 They took the opportunity to reinvent their lives through making new friends, starting relationships and getting visas and education opportunities abroad. They wanted experiences beyond the ‘boredom’ of the everyday life they were living. This confusion between rational benefits and everyday pleasures is also found in how rural users make use of the internet. Manzer’s observation about the Indian context also rings true for sub-Saharan Africa: Whenever we talk about rural … nobody thinks entertainment is more important, because we think … they should not watch a movie, they need food first, they need water first, and we do not realise that they are also humans. They do not have as many entertainment options as we have, and therefore they need to have this … Do you know what the most accessed services online [are] that we have found? Facebook, Google and news …5

Technology is socially defined and not a separate entity from the social sphere. It may have ‘special powers’ but it will be users’ choice to use them or not. As Larkin observed: ‘The meanings attached to technologies, their technical functions and the social uses to which they are put are not an inevitable consequence but something worked out over time in the context of considerable cultural debate.’ 6 By definition, if technology is socially defined, the ways in which it is used in sub-Saharan African countries differ from how it is used elsewhere, and that difference is important. To understand that, ‘rather than starting with the internal “essence” of a technology and then attempting to deduce its “effects” from its technical specifications, one begins with an analysis of the interactional system in a particular context and then investigates how any particular technology is fitted into it’.7 In sub-Saharan Africa particular contexts vary considerably. Not everyone starts from the same place. An illiterate8 African has less, or no, chance of using SMS (Short Message Service) or the internet and 3

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Africa 2.0

a women in a traditional household has less chance of getting her hands on a phone than her male counterpart (see Chapters 5 and 9). It is in the nature of this kind of book that it isolates out what has happened with mobile calling and internet technologies. But, as already implied, technologies develop alongside each other and not in isolation from older technologies. In sub-Saharan Africa, for example, radio receivers in basic and feature phones are an important feature of mobiles but are rarely discussed.9 The communications technologies that Africa 2.0 explores were not the first to be used in sub-Saharan Africa. The post-independence nationalist leaders deployed radio stations and television networks as part of their modernising agendas.10 But, arguably, the two technologies that are the subject of this book – mobile calling and internet – are in many ways very different from those that went before. They are not one-to-many technologies sending ‘messages’ one way; a person listening to a radio programme cannot respond directly to it using the radio. Mobile calling and internet are many-to-many technologies creating networks between people; multiple users can both contribute and receive information. As already mentioned, these technologies are regarded by some commentators as possessing ‘special powers’. These might be said to include their ability to speed things up and close geographic divides. As with the nineteenth-century telegraphy revolution,11 which contributed to the making of empires, both mobile calling and internet closed distances that would have been time-consuming and difficult to travel. In doing so, they speeded up social and economic transactions. A rural parent can ring a son or daughter in Lagos or London, and get money for an emergency the same day. Barlow’s article ‘Africa rising’ in Wired magazine12 focused on the same central idea that this book enquires into: why did things happen the way they did? Writing at the beginning of the process, he offered a provisional cultural and anthropological answer: Gregory Bateson, the anthropologist, once defined information as ‘any difference that makes a difference.’ In an information economy, difference is everything. It’s differences that draw out the voltage of wealth. Africa’s 4

Introduction

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strength is difference: thousands of different microcultures that developed out of the difficulty of travel between thousands of different terrains, languages, and climates. Most Africans stayed out of the loop of the 20th century and were not homogenised into the generica that is now much of … what they call the North. And thus their continent – so intensely different from the rest of the world, so vastly different within itself – represents a huge and still unconnected battery of stored potential. All it would take for Africa to leapfrog into the wonderland of an information economy would be to attach the electrodes – get it wired, in other words – and then watch its huge voltage zap the gap. Or so went my theory.13

However, unlike Barlow, this book identifies language differences as a key barrier contributing to the digital divide (see Chapter 5). One important effect of mobile and internet technology is the ‘digital divide’, a term first used in 1995 by Lloyd Morrisett, the former president of the US-based Markle Foundation, to refer to information ‘haves’ and ‘have-nots’.14 Spanish sociologist Castells’ definition of the digital divide was more specific, as ‘inequality of access to the internet’ 15 (later he focused more on inequality of mobile phone access) and as representing ‘Africa’s technological apartheid at the dawn of the information age’, in particular.16 But, even as the digital divide was identified, arguments over whether and how it could be closed began. It was argued that accelerating the take-up of communications technology devices would only widen it:17 in other words, using technology allows the rich person to do more and gain more advantages than the poor person18 (see Chapters 5 and 9). These technological changes were driven by a device that most subSaharan Africans could hold in the palm of their hand, one that was so useful to them that they checked it when they got up in the morning and left it by their bed when they went to sleep at night. The mobile was so well loved that a woman in Sierra Leone – who would have died of delivery complications had it not been for her phone – named her baby boy after her mobile provider. In Ghana, its image was printed on Kente fabric. This mobile device transformed the assumptions about what Africans 5

Africa 2.0

could do, and it seems to have opened out a very different future for sub-Saharan Africa.

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Methodology Over two of the three and a half decades in which many of the things described in this book happened, I was an observer, a campaigner and directly involved in many of the events that took place. Sometimes I was in the centre of things, at other times I simply observed them. I started with all the clarity that comes from being an outsider and, over time, as I learnt more, I became some kind of insider. In methodological terms, the book is based on twenty years of primary research. Every week when I edited and wrote Balancing Act’s News Update, my weekly e-letter on telecoms and internet in Africa, which started in 2000, I had to interview someone and identify the important issues of the week. The book draws on the various e-letters I published over the period. They contain over 1,500 items – original interviews and articles – and my two YouTube channels contain another 1,300 interviews (see below, ‘How it all began’). In addition, I conducted academic and policy research with universities, development organisations, foundations and private sector firms, looking at policy and regulatory issues, business feasibility and technology adoption issues. In addition, between June 2020 and March 2021 I undertook another 137 interviews specifically for this book. These were intended to explore why those interviewed thought things had happened the way they did, and to provide eyewitness accounts. A full list of these interviewees can be found in Appendix B, with descriptions of their current or former jobs. I have written about the thirty-five years covered by the book using historical method and have sought to identify the key issues, drawing upon materials from fields as diverse as economics, business studies, development studies, history, anthropology, ethnography, sociology, psychology, politics and cultural studies. This approach is useful if one takes technology as largely socially defined and not fully objectively quantifiable, and one wants to understand what happened, who made it 6

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Introduction

happen and what effects it had. Technology users have agency, and their daily lives are driven by a multitude of wide-ranging interests and capacities to use technology and to generate benefits from their use of technology. Technologies develop alongside each other at different rates, sometimes in conjunction with each other, sometimes differently in different places and times. To understand what happened and what effects it had may require an understanding of politics, psychology and the prestige often attached to technology on the continent: for example, in the case of the mobile phone, how it came to represent a new African version of aspiration and modernity. Some of the source material, books, reports and articles referred to, which were largely my background reading, can be found in the Select Bibliography. There is a glossary of technical terms in Appendix A. Sub-Saharan Africa is a complex mixture of very different countries. The book combines material from sub-Saharan anglophone, francophone and lusophone countries. It makes no pretence at being definitive, but tries to make sense of a complex history of technology change for the informed general reader. It refers to experiences in forty-three of the forty-nine countries. Twenty-seven of them I have visited in some research capacity. An overarching history encompassing all these countries cannot cover everything. A number of issues have had to be left out, including: manufacturing vs consumption, makers (3D printing, Arduinos, etc.), Open Source (which is only lightly touched on in Chapter 6), technologies’ environmental impact, virtual currencies like Bitcoin and digital identity. It also largely excludes the other part of my professional life – African broadcasting and media – except where it increasingly intersects with topics described in Chapter 5, such as streaming. In terms of country names, I refer to the Democratic Republic of Congo (DRC) to distinguish it from Congo-Brazzaville and I use Guinea (not Guinea Conakry) to distinguish it from Guinea-Bissau. In the Prologue I use DRC’s former name, Zaire, which was used at the time being described. I also use the European word ‘mobile’ rather than the North American word ‘cellular’, unless required by a quote in context. Sub-Saharan Africa, 7

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Africa 2.0

which is the focus of the book, is a very precise description, but occasionally the word Africa is used as shorthand or again in quotes. ‘At the time of writing’ is referred to at various points: this was May 2021. I have, in almost all instances, used US dollars as the currency of international business. Sub-Saharan African countries do not always have annual sources of data, so what sometimes may seem like a strange pattern of data cited by year simply reflects what’s available. I have also sought to cite data across years that demonstrate changes over time. Although the ideas identified above show how I have sought to use the primary research and secondary sources, this is not a theoretical book.

How it all began So, how do I fit into this very large picture? During supper with a couple of people in 1998 we fell to arguing about what development should be doing in Africa. The heart of the argument was best expressed in something I wrote subsequently: If wealth is created by those using digital technologies, then Africa has to figure out how either to attract wealth to invest in its countries or to create ideas and products that will make wealth for them. Without successful wealth creation, how can the enormous costs of Africa’s social needs be met or indeed wealth be redistributed in any way?19

The same year I read Barlow’s article about the internet in Africa, quoted in the previous section. Rereading it all these years later, it still makes me laugh with its combination of sharp insights and Californian craziness. The key passage that caught my eye at the time reads: ‘As my own general theory about the information economy developed over the years, I proposed that a good reality check for my ideas would be for Africa to surprise everyone by suddenly doing as I had: skipping industrialism entirely and leaping directly into the information era.’ 20 It sounded intriguing … In 2000 I visited four countries in sub-Saharan Africa – Kenya, Uganda, Zambia and Zimbabwe – came back to the United Kingdom (UK) and 8

Introduction

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wrote an e-letter about what I found in terms of telecoms and internet activity: Whereas before I went out to Africa everyone I spoke to was pressing me about the difficulties of the lack of infrastructure, I came away feeling that (however creaky) it is in place and can only improve. Agencies like Oxfam rightly contrast the costs of supplying this infrastructure with the need for funding things like fresh water supply. However the technology can’t be ‘uninvented’ and Africa will have as strong a need to be connected as other parts of the world.21

After that, people started sending me material … a guy from Madagascar sent me a thousand words on the internet there.22 Out of these contributions I created a weekly e-letter on telecoms and internet in Africa and a consultancy and research company called Balancing Act. Over time I attracted work that paid the bills and allowed me to gather the information that I published as an intelligence service that everyone could share. Structure of the book The book has three sections. Part I looks at how two technologies – mobile calling and internet – were made accessible to millions of sub-Saharan Africans. The Prologue and Chapter 1 highlight the difference between sub-Saharan Africa before and after liberalisation and privatisation. The Prologue also touches on the dishonesty that informs how business is done, which is detailed later in Chapter 7. Chapter 1 describes the struggles to roll out the new, private mobile operations and innovations, including pre-paid calling that encouraged low-income users. The sheer thirst for mobile calling meant that the sub-Saharan markets grew very rapidly. By contrast, in its early days, internet use was expensive, unreliable and not widely available, all of which contributed to limiting its potential. Chapter 2 describes the slow progress of internet diffusion, which accelerated with the introduction of cyber-cafes and Wi-Fi hot-spots. It closes by looking at how the supply of international and national fibre cables transformed the cost and quality of internet supply. Chapter 3 identifies how the resultant cheaper mobile internet and low-cost smartphones came together with 9

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Africa 2.0

online applications that sub-Saharan Africans wanted to use, creating wider internet use. Part II examines how new services such as mobile money and e-commerce were built on these infrastructural foundations; what use Africans made of these new digital services; the part development actors played in encouraging these technologies; and the corruption that informed sub-Saharan Africa’s telecommunications businesses. Chapter 4 examines how a combination of development funding and private finance laid the ground for the advent of mobile money services and how, over two decades, such services have evolved from simple cash transfer to a financial ecosystem offering insurance, loans and social payments. Chapter 5 explores how online businesses grew up providing media and entertainment, and how Africans used the internet and incorporated it into their lives. Chapter 6 looks at how mobile calling and internet provided the ‘magic dust’ for changing how development was, and is being, delivered and the key roles which those involved in development played in fighting for the policies that would help open up markets (Chapter 1) and would support nonmarket services. Chapter 7 examines the corruption and how it affects the way business is done in terms of getting licences and securing contracts and shapes the political economy of sub-Saharan African countries. A major theme of the chapter is how ‘patronage capitalism’ works in practice through the prism of the telecommunications industry. Part III considers how start-up innovation has played a key role in opening up new opportunities and concludes with a provisional assessment of the overall changes that have occurred. Chapter 8 describes how subSaharan African start-ups have opened up opportunities to a wider number of people and hold the potential for breaking up ‘patronage capitalism’. It identifies the cultural and political challenges faced by both local and international start-ups. Taking the long view, Chapter 9 reflects on the success story of liberalisation, as well as considering the types of finance that drove change, the nature of the continuing digital divide and how the technologies have interacted with key aspects of people’s social behaviours. Too much writing about technology is in the future perfect tense. There is an over-urgent sense that something is going to happen ‘real soon now’. 10

Introduction

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People in tech do not always appreciate that human behaviour often changes much more slowly than the rate of new technology development. A good example of that is sub-Saharan Africa’s love affair with cash, which is still more widely used than its digital equivalent (see Chapter 4).

Notes 1 GSMA, The Mobile Economy: Sub-Saharan Africa (GSMA, 2020). The report provides 2019 data and unique subscriber numbers. 2 For a version of this methodology, see www.intrac.org/wpcms/wp-content/ uploads/2017/01/Outputs-outcomes-and-impact.pdf (accessed 7 December 2021). 3 F. Bar, M.S. Weber and F. Pisani, ‘Mobile technology appropriation in a distant mirror: baroquization, creolization, and cannibalism’, New Media and Society 18.4 (2016), 17–39, https://journals.sagepub.com/doi/abs/10.1177/ 1461444816629474 (accessed 7 December 2021). 4 J. Burrell, Mobile Phones: The New Talking Drums of Everyday Africa (Langaa Research and Publishing Common Initiative Group and African Studies Centre, University of Leiden, 2009), chapter 9. 5 S. Bailur, J. Donner, C. Locke, E. Schoemaker and C. Smart, Digital Lives in Ghana, Kenya, and Uganda (Caribou, 2015), p. 24, www.cariboudigital.net/ wp-content/uploads/2019/01/1474-Caribou-Digital-Digital-Lives-inGhana-Kenya-and-Uganda.pdf (accessed 7 December 2021). 6 B. Larkin, Signal and Noise – Media, Infrastructure, and Urban Culture in Nigeria (Duke University Press, 2008), p. 3. 7 J. Bryce, ‘Family time and television use’, in T. Lindof (ed.), Natural Audiences (Ablex Books, 1987), pp. 17–36. 8 Illiteracy is a global problem. For example, in the UK nine million adults are functionally illiterate; one in four British five-year-olds struggle with basic vocabulary: www.theguardian.com/education/2019/mar/03/literacy-whiteworking-class-boys-h-is-for-harry (accessed 7 December 2021). 9 R. Southwood, Face-to-face Survey – Overview Summary Results (Balancing Act, 2014), p. 8 for overall findings and example from Ghana of most important uses (radio on mobile: 55%). 10 Larkin, Signal and Noise. 11 See T. Standage, The Victorian Internet – The Remarkable Story of the Telegraph and the Nineteenth Century’s On-line Pioneers (Walker & Co, 1998). 12 J.P. Barlow, ‘Africa rising: everything you know about Africa is wrong’, Wired (1 January 1998), www.wired.com/1998/01/barlow-2/ (accessed 7 December 2021). 13 Ibid. 11

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Africa 2.0 14 D.L. Hoffman, T.P. Novak and A. Schlosser, ‘The evolution of the digital divide: how gaps in internet access may impact electronic commerce’, Journal of Computer-Mediated Communication 5.3 (2000), https://doi.org/ 10.1111/j.1083-6101.2000.tb00341.x (accessed 7 December 2021). 15 M. Castells, The Internet Galaxy (Oxford University Press, 2000), p. 248. 16 M. Castells, The Rise of the Network Society, The Information Age: Economy, Society and Culture (Wiley-Blackwell, 2000). 17 K. Toyama, Geek Heresy – Rescuing Social Change from the Cult of Technology (Public Affairs, 2015), chapter 2. 18 A. Scheerder, A. van Deursen, A. and J. van Dijk ‘Determinants of internet skills, uses and outcomes. A systematic review of the second- and third-level digital divide’, Telematics and Informatics 34 (2017), 1607–24, http:// dx.doi.org/10.1016/j.tele.2017.07.007 (accessed 7 December 2021). 19 R. Southwood, Siyafunda: Partners in Learning, Education in South Africa – 1994 and Beyond (Canon Collins Educational Trust for Southern Africa, 2002), chapter 11 20 Barlow, ‘Africa rising’. 21 ‘Impressions of my Africa trip’, Balancing Act’s News Update 4 (7 January 2000), www.balancingact-africa.com/news/telecoms-en/47380/impressionson-my-african-trip (accessed 7 December 2021). 22 ‘Madagascar’, Balancing Act’s News Update 5 (14 January 2000), www.balancingactafrica.com/news/telecoms-en/47381/madagascar (accessed 7 December 2021).

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Part I

Technology diffusion: the spread of mobile calling and internet

Map 1  Sub-Saharan African countries and their fibre networks Note: Dark grey countries are sub-Saharan Africa. Where the West African Cable System is shown in West Africa, it also indicates Glo1 and Main One. (Source: CC-BY 4.0 Attribution-only licence by Steve Song) 13

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Prologue (1986–2004)

Sub-Saharan Africa’s first mobile phone operation was launched by Telecel in 1986 in what was then called Zaire (now DRC). Zaire was run by Mobutu Sese Seko as a country for which the word ‘kleptocracy’ was invented. Because Telecel was so far ahead of its time, the business was very much cast in the ‘old Africa’ mould: it needed to ‘grease the wheels’ with key politicians and became heavily dependent on their goodwill to keep operating. Its business model was one of selling scarcity expensively to elite customers. Before the launch of Telecel in Zaire, the country had only a monopoly fixed-line incumbent telephone company. There were only twenty-four thousand phone lines for a country of thirty million people. Calls often failed to go through, and when they did the quality was very bad. Most of the company’s infrastructure had not been updated since the 1960s and people often stole and sold parts of the copper network. The brains behind the idea for the new mobile network was Miko Rwayitare, a Rwandan who had completed his education in Zaire. He teamed up with Joe Gatt, the country station manager for the airline Pan Am: ‘Both were personalities with pretty strong egos.’ 1 Gatt had managed to broker the sale of a plane to Air Zaire, the government airline,2 and arranged charter planes for it. With the commission from that, he bought AMPS3 equipment from a small operation that had never managed to launch in the capital, Kinshasa.4 Because he had known Zaire’s President Mobutu for fifteen years he was able to make the right connections at the highest level. When at the end of 1985 Mobutu went to the United 15

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Technology diffusion

States (US) to meet President Reagan, Gatt got a National Car franchise to rent him ten mobile phones, which were usually optional extras on car hires. Rwayitare then programmed these to operate on the local AMPS network they had set up in Kinshasa. Gatt gave the phones to Mobutu and his ministers and encouraged them to phone home. Mobutu was able to call people at his palace and office and was pleasantly surprised that the phones worked.5 No licence was forthcoming, so Gatt and Rwayitare told the government that there would be a year to pilot the technology. In 1986, with US$4 million in finance from equipment vendor Motorola and a US$4 million contribution from Gatt, an AMPS system was rolled out in Kinshasa. The founders then purchased two hundred phones from Motorola, at US$3,000 apiece, and gave them to Mobutu and his government officials, who would be the only network users. The phones were about the size of a half-brick, with a long protruding antenna and large, awkward white buttons; their batteries could support only sixty minutes of talk time, and their memories stored only the last number dialled. Two hundred Zairean officials called each other at home and overseas over the next year without paying for a single call. Telecel covered all expenses. ‘You’d go in to a minister’s office and you’d see a “Telecel” [as the phones became known] on his desk.’ 6 At the end of the trial year, the government was sold on the idea but refused to return the phones. As no licences of this kind had ever been issued before in sub-Saharan Africa, the founders hired a Paris lawyer to write one. It cost Telecel US$1.5 million to get its first licence. However, it was neither effective in protecting the business nor enforceable against the government in any way: ‘Everything revolved around Mobutu and you had to be keep the old man and his associates happy. It was the same with [his successor] Laurent Kabila [senior].’ In year one of its operation, without any marketing, the network got three thousand subscribers in its Kinshasa coverage area: almost all were government officials, business people and expatriates. It had a waiting list of four hundred. The handset cost US$5,400 and the monthly subscription of US$100 enabled local calls to be made at US$0.35 a minute and international ones at US$16 a minute. By 1989, the network provided 16

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Prologue

coverage in the country’s five largest cities. Having a ‘Telecel’ became an important status symbol locally. A newspaper article of the time gave four tips for success in the country: ‘Hire a bodyguard. Drive a Mercedes. Always wear a double-breasted silk suit. Never, but never, be seen without a Telecel mobile phone in your hand.’ But the example of Zaire explains why sub-Saharan Africa is often described as the toughest place on earth to do business. In 1991 the Zairean military, unpaid for months, pillaged Kinshasa and soldiers broke into a Telecel office and stole $3 million worth of Motorola equipment. They didn’t know what to do it with it, but thought it might be valuable. In 1994 Telecel tried disconnecting the account of Zaire’s prime minister over his unpaid bill. He sent armed troops to get it to reconnect the service. In May 1997 Mobutu was overthrown by the rebel army of the new president, Laurent-Désiré Kabila, and in the two subsequent years the new government ran up bills of US$25 million with Telecel without ever paying. The company would cut off non-paying accounts and the government would apply pressure to get them restored. The company’s Vice President Operations was jailed several times and ‘severely mistreated’ 7 before eventually being expelled from the country. No bank would lend Telecel money to upgrade its network. As a Rwandan, Rwayitare was cast as the ‘enemy’ in the war between DRC and Rwanda: ‘We had operations in Goma and Bukavu and these were considered [by the DRC government] to be in enemy territory.’ 8 Gatt, as one of Mobutu’s former associates, was regarded with great suspicion: ‘Joe was a Mobutu guy. Kabila came in and we started having real problems. He tried to curry favour but Joe had two strikes against him: Mobutu and Miko. We were condemned as being spies for the enemy and we could never get a GSM [Global System for Mobile Communications] licence.’ 9 Despite these considerable financial pressures, the company was still making money, but finding it hard to turn local currency into the dollars needed to run and invest in the business: It was making piles and piles of local money, francs Congolais. It had such big stacks of it that it couldn’t bank it. The notes produced a strong gas when put in a secure vault so we had to install fans. We were involved in 17

Technology diffusion

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black market transactions. We would sell the local currency to Lebanese diamond merchants who needed the cash to pay the diamond miners. We had a private jet that took the diamonds to Antwerp and got US dollars for them. We also bought US dollars on the black market locally.10

Facing this financial squeeze, increased competition and unable to upgrade the network to the newer GSM standard, Rwayitare and Gatt agreed to sell an 80% share of the company to Egyptian-owned Orascom for US$213 million. The DRC operation ceased trading in 2004. Notes 1 Author interview, Christopher Lundh, formerly managing director, Telecel Congo, 31 July 2020. 2 Ibid. 3 AMPS is a standards system for analogue signal mobile telephone service and one of the predecessor technologies to GSM (Global System for Mobile Communications). 4 Author interview, Christopher Lundh, 31 July 2020. 5 C. Shiner, ‘Congo-Kinshasa: Cell Phone Pioneering in Mobutu’s Zaire’, AllAfrica. com (18 September 2008), https://allafrica.com/stories/200809181023.html (accessed 7 December 2021). 6 Author interview, Christopher Lundh, 31 July 2020. 7 Ibid. 8 Ibid. 9 Ibid. 10 Ibid.

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Mobile voice calling booms (1993–2004)

This chapter looks at the opening up of communications markets to privately owned companies (known as liberalisation) and the privatisation of state-owned monopoly telecommunications companies that brought large-scale investment into Africa to create mobile voice networks. This was both a political and a legal challenge. What follows describes how market liberalisation and privatisation pitted the inefficient state telecoms behemoths against new mobile market challengers, with the latter introducing innovations like pre-paid calling. It describes how the South African liberalisation drew in international investment, and the licensing process in Nigeria that overcame corrupt practices. It concludes by looking at the uneven pace of liberalisation and privatisation up to 2004. The contrast between the struggles to set up a mobile voice operation in Zaire (see Prologue) and Zimbabwe (see below) illustrates the ‘old’ and ‘new’ way of doing business in Africa. Whereas Telecel’s Rwayitare and his partner relied on a relationship with a key politician,1 Masiywa’s struggle, and those of many others, was about due process and rules. Econet’s five years of court battles to get a licence (1993–2000) Zimbabwean Strive Masiywa is ‘short of stature’ and with his unwired glasses looks more like someone’s idea of an African professor than a telecoms entrepreneur: ‘He is soft spoken, very articulate, short tempered 19

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Technology diffusion

but driven by what he feels inside.’ 2 He needed all those qualities because it took him five years and three different court battles to get a mobile operator’s licence in Zimbabwe. Masiywa had worked in transmission in the UK telecoms company British Telecom before returning to Zimbabwe to launch his own electrical engineering company, Retrofit, in 1986.3 It built and maintained networks for the government-owned, monopoly operator ZPTC. Five years later he met a Motorola sales person who was selling analogue mobile networks in Africa. He was trying to persuade him that these new mobile networks were a good opportunity for African entrepreneurs. The salesman put Masiywa in touch with Miko Rwayitare, and he travelled to Zaire to see him. At that time, Telecel had only 1,500 customers and was the only commercial mobile network in sub-Saharan Africa. Rwayitare even talked of investing in Masiywe’s planned mobile operation in Zimbabwe. In 1993 Masiywa applied to Zimbabwe’s telecoms regulator, then run by the state monopoly telecoms company ZPTC, for a licence to become a mobile operator. His difficulty was that ZPTC was both the referee and the only player. Not surprisingly, it turned him down: ‘You can’t have a licence because communications is a state monopoly. So I said let’s partner together then. No, they said, that’s not of interest to us. Then why are you preventing us from doing it?’ 4 Because Masiywa had been in touch with the American sales person from Motorola, the government accused him of being a Central Intelligence Agency agent. Undaunted, Masiywa decided to take the case to Zimbabwe’s Constitutional Court. Worried that his lawyers had insufficient telecoms experience, he persuaded US-based global telecoms lawyer Dr Judith O’Neill to help him. She was to play an important role in what followed. When he first contacted her, she told him: ‘The law is in your favour but cases like this are a matter of politics rather than law.’ She checked with someone whom she trusted in her network, who cautioned her: ‘This will never happen politically in Zimbabwe. Just don’t do it.’ But O’Neill could see Masiywa had ‘stamina and commitment’, even though she didn’t think he could afford her services.5 20

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Mobile voice calling booms

Masiyiwa’s challenge to overturn the denial of his licence by ZPTC began at the Zimbabwe High Court. After some weeks, the judge issued her ruling in favour of Masiyiwa, predominantly on the basis of the Zimbabwe constitutional law and related US and South African constitutional and anti-trust law. She ruled that while the Zimbabwe constitution protects freedom of expression, the monopoly ZPTC held at that time did not automatically violate that rule. However, given that there were only 1.4 telephones per hundred people and a fourteen-year wait for a telephone, the monopoly did interfere with Zimbabweans’ freedom of expression, especially since ZPTC had refused to license others to fill the gap. The government appealed that decision to the Supreme Court, sitting as a constitutional court, and it confirmed the ruling of the High Court. At the end of the arguments presented in the constitutional court, the Chief Justice asked Masiywa’s lawyer: ‘Is it true that 75% of Africans have never heard a telephone ringing?’ His lawyer replied: ‘Only 1.4% of Africans have access to a telephone.’ By lunchtime, the Chief Justice indicated that the court was inclined to rule in Masiywa’s favour and asked: ‘What do you suggest the order should be?’ His telecoms expert, O’Neill, moved swiftly down the corridor of the court and whispered in the ear of Masiywa’s lawyer, who then stood up and asked for a recess to allow them to draft the order. Based on an already drafted document, O’Neill was able to ensure that the wording of the order granted Masiywa a licence ‘within, into and from Zimbabwe’. This phrase, previously used by the US regulator the Federal Communications Commission, implied that Masiywa would operate transnationally, although ‘international’ itself did not appear in the order. The government’s lawyers failed to spot the implications of the words actually used. ‘This gave us the right to move international traffic to and from Zimbabwe and that created the opening for [what became] Liquid Telecom.’ 6 The constitutional court then issued the order ending the communications monopoly and causing the country’s legislation to be rewritten. But Masiywa’s troubles were not yet over yet: ‘By now the government was completely pissed off. They told me I was persona non grata. They cut off all my construction contracts [80% of his projects were for the 21

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Technology diffusion

government].’ 7 The message was clear: stop pursuing this licence or we will ruin you. He sold his company for a fraction of what it was worth and ploughed on: ‘He was driving around in a second-hand car and had mortgaged his house. But he was not someone driven by wealth but by faith and the belief that it was the right thing to do.’ 8 Masiywa had to return to the High Court to get it to force the government to actually issue the licence to him. In the meantime, his erstwhile potential investor, Rwayitare of Telecel, did a deal with the government and President Robert Mugabe’s nephew to get a licence to launch Telecel in Zimbabwe. Masiywa was still tied up in the courts and he was furious with Rwayitare.9 The case being addressed in the High Court was that Masiywa had been unfairly treated, his rights had been prejudiced by the licence battle and that the issuing of the licence (without any due process) to Telecel was illegal and probably involved corruption. The ruling in his favour was finally issued in December 1997. Masiywa had meanwhile been in discussions with Swedish equipment vendor Ericsson, who were so impressed by his persistence that they donated a small switch (with a capacity for five thousand customers) and four base stations. These were smuggled into the country on an Aeroflot cargo jet and set up in the middle of the night: ‘They thought the government would sabotage it.’ 10 Masiywa’s new company, Econet, was finally in business. Masiywa faced another battle over access to international satellite capacity, which he won without going to the courts. Under the threat of further court action, Intelsat11 came up with a compromise: Masiywa would approach another Intelsat consortium member12 and they would make him an associate member. Masiywa has the rare distinction of being an individual who took on President Robert Mugabe and won. But although he had two years without political interference, there was a new political crisis in 2000, with a referendum on the constitution. Those campaigning against Mugabe and the constitutional changes had a simple SMS slogan that they circulated: ‘No fuel, no forex.13 Vote No’. The referendum went against Mugabe and he was a sore loser: ‘Mugabe thought I’d set up SMS to overthrow him. They tried to kill me so I moved to South Africa.’ 14 22

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Mobile voice calling booms

After these early cases, the liberalisation of markets and privatisation and the role of handing out licences and regulating markets moved from the head of state, the ministry or even the state telecoms company to what was often a hands-off and independent regulatory agency. These were set up by governments but meant to operate at arm’s length: some were reasonably independent, while others remained tied to the government’s apron strings. The remainder of the chapter explores how the new mobile challengers beat the inefficient state telecoms behemoths and two key liberalisation processes in South Africa and Nigeria. It concludes by looking at why liberalisation was more successful than privatisation. Mobile competition signals the downfall of Africa’s inefficient state behemoths (1988–2005) In 1988 African communications was vanishingly small in the global context. Of the more than 435 million lines in existence globally in 1988, only 6.4 million were in Africa.15 By 1995 half the countries in sub-Saharan Africa had mobile services and there were just half a million subscribers. But by 2000 nearly all sub-Saharan African countries were covered and there were ten million subscribers.16 By 2005 (the year after this chapter closes) there were ninety million subscribers. The cost of mobile voice calling fell dramatically with increased competition, pushing subscriber numbers up. For example, when MTN (Mobile Telephone Network) launched in Uganda it forced the only other mobile operator, Celtel, to cut its rates from 49–66 US cents a minute to 16–33 US cents a minute. Once the market opened up to two mobile operators, the number of subscribers exploded, from around 30,000 in 1998 to 150,000 by the end of 2000. Competition had lowered prices and driven demand. In Nigeria the price of mobile phone starter packs fell from 20,000 naira (US$145) in 2001 to 1 naira (less than one US cent) in 2004 for basic pre-paid minutes.17 This period will probably be seen as the golden age of regulation in sub-Saharan Africa. The newly minted regulatory bodies (or governments) 23

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Technology diffusion

issued licences to eager investors willing to compete with each other to make money in this new industry. Liberalisation was much easier to achieve than privatising the incumbent, state-owned operators. They were among the countries’ largest employers and their international call revenues contributed substantially to GDP, but they were deeply inefficient. For example, in Ghana, an International Telecommunications Union (ITU) report in 1980 observed that the incumbent GP&T18 would take eighty years to connect everyone on its waiting list.19 A later assessment noted that ‘the problem was inefficiency and poor management … The company was heavily over-staffed, slow to respond to consumer complaints and employees frequently demanded side payment20 when they did respond.’ 21 In 1992, another consultant’s report found that: ‘GP&T’s commercial department did not routinely update payment records and did not even track government repayment, so the company could not accurately determine who had paid its bills.’ 22 In June 2003, the Kenyan government started to call time on its incumbent Telkom Kenya, which had lost a massive US$1.6 billion over the previous five years through corrupt trading and vandalism.23 Even the regulator, who had worked hard to defend it, eventually lost patience: ‘We have come from a regulatory environment that was dictated by – consciously or unconsciously – the protection of the incumbent’s revenues. That obsession – even though its revenues fell anyway – was like trying to hold on to an illogical scenario.’ 24 The company had 19,500 employees, more than 3,000 of whom were drivers.25 According to its former chief executive officer (CEO): ‘It had a bloated workforce. There was out-of-date technology. It had Huawei in one section and every other vendor was in the network.’ 26 According to one report in 2005: ‘The level of indebtedness ratchets relentlessly upwards as the interconnect charges accumulate and the swollen wages bill continues to be paid despite advice from Telkom Kenya’s senior management that the nettle should be grasped.’ 27 By 2006, there were over 100,000 people who had applied to be connected by fixed line but were kept on a waiting list. Telkom Kenya could not cope with the demand.28

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Mobile voice calling booms

With very few exceptions, the incumbents throughout sub-Saharan Africa were exactly as described above: inefficient behemoths that were a source of patronage and revenues for Africa’s rulers. Even when they were granted the lucrative opportunity of a mobile licence, almost none was successful at running these operations. Against this backdrop, the sheer thirst for service from the new mobile operators drove growth at a dizzying pace. For example, when Celtel first launched in CongoBrazzaville in 1999 it met with what can only be described as pent-up demand: On the day [its first shop] offered network service, about 500 people turned up, pushing and shoving, trying to get in. In the end the police had to be called to control the crowd. The original plan was to have 1,500 subscribers in year one … it ended up with 15,000 subscribers.29

But the tensions between the new privatised players and the state-owned, former monopoly telecoms companies with their historic privileges meant that the battle between them continued to dominate events. Sadly, the latter’s extensive monopoly privileges were not matched by an equivalent sense of responsibility for the public tasks they were meant to undertake, including rolling out services to people who wanted them. Over time the differences between mobile and fixed-line business models worked against the monopoly operators. In broad terms, it was the way they connected customers to the network, what is called ‘the last mile’, fixed-line telephony being based on physical connections to places such as offices and homes. In terms of capital costs, a mobile operator can build its network as demand grows and the initial capital is only a few million dollars. It can expand its business while it is running. Also, as GSM equipment became the global standard the cost of building networks and manufacturing customer handsets kept coming down. Mobile operators offered a pricing model – pre-paid calling – that suited African income and spending habits. Sub-Saharan African government-owned incumbents found another of their sources of revenue – international revenues – under attack. In

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Technology diffusion

1993, calls from Uganda to the UK or US cost US$7.50 a minute. The revenues from these high rates were collected at either end of the call, and if, say, BT had sent more minutes to Uganda’s telephone company (telco) than vice versa, it would have to pay at the settlement rate for the excess minutes. But because most calls were into sub-Saharan Africa and they came from liberalised markets where calls were cheaper, an ‘export deficit’ built up. In 1997 the US regulator, the Federal Communications Commission undertook a benchmarking exercise, from which it established ‘its Benchmarks Policy with the goal of reducing above-cost settlement rates paid by US carriers to foreign carriers for the termination of international traffic, where market forces had not led to that result’.30 Regulation, competition and new technologies were all pushing international rates down. Voice over Internet Protocol (VoIP) allowed calls to be compressed and sent as IP packets over the public internet or on an IP data link. Internationally, the VoIP-based companies were offering much cheaper minutes to many international destinations. This created a wave of cyber-cafes that offered much cheaper calling in most sub-Saharan African cities. These were either tolerated, or closed down in some countries like Ethiopia as the government sought to defend the revenues of the monopoly carrier against those selling VoIP minutes. But corrupt incumbents also posed problems: individual employees would sign corrupt contracts with the VoIP carriers to carry this new type of traffic. All this began to put a severe dent in international calling revenues for state-owned incumbents, as prices bore no relationship to the costs of providing services. Although the incumbents might have monopoly gateways for voice, the system was rotting both from the inside and under competitive pressures from outside. International voice-calling charges were notionally based on distance, but it was often more expensive to route calls directly from one African country to another, even when neighbours, than via New York, Paris and London: the return leg from those places was so much cheaper than sending the call directly. African state-owned telecoms companies were not responding to market pressures. Routes between countries were often non-existent. 26

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Mobile voice calling booms

For example, calls between Kinshasa and Brazzaville (a distance of three kilometres across the Congo River) were routed internationally and were expensive. Two things changed this: firstly, competition saw prices plummet and call volumes increase a great deal; secondly, in the example above, after a lot of argument with the state-owned incumbents, Celtel set up a microwave link between the two capitals.31 To add to their woes, the government-owned telecommunications companies nearly always found that they were owed large sums of money in unpaid bills by the government itself. They rarely had the courage to turn off the service to government, as it was their source of funding and political support. As Celtel’s purchase of Tanzania’s fixed-line operator TTCL in 2000 showed, the amounts owed did not represent actual, potential income.32 The big innovation: pre-paid calling Starting with South Africa’s MTN, the big innovation that mobile operators introduced was pre-payment, which gave them a distinct advantage over their fixed-line rivals. Customers gave them money before they had used the service: customers needed to purchase SIMs, activate them and buy scratch cards to load minutes onto their SIMs. By 2001, the vast majority of customers on sub-Saharan African networks were pre-pay. As time passed and competition grew, customers were able to buy pre-paid airtime in ever-smaller increments, falling to below US$1. In addition, some mobile operators introduced per second rather than per minute billing. Both changes allowed more, lower-income customers to become mobile phone consumers in a way that they could never become fixed-line users. Mobile phone minutes became a daily consumer purchase like cigarettes, chewing gum and Coca Cola and it was always the lowest-denomination scratch card that sold best. Street sellers were able to add scratch cards to all of these other goods that they were selling. Nowadays mobile operators have more formalised distribution channels, through dealers (who deal with the street sellers) and their own shops. Competition between mobile operators led to price wars and increased service quality, both of which 27

Technology diffusion

benefitted their customers. Also, competition forced a level of innovation in the industry with things like pre-paid calling.

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South Africa’s liberalisation draws in international investment The liberalisation of the South African mobile phone sector was the next key moment in the process of creating competition. Before the market was opened up, the level of investment interest in communications in sub-Saharan Africa was very low: more or less everything was controlled or run by government. Neither Miko Rwayatire’s Telecel nor Strive Masiywa’s Econet attracted substantial local or international investment until the early 2000s. It was the new South African mobile operators – MTN and Vodacom – that pulled in sizeable international funding. Both were to go on to become the first pan-continental mobile operators, with MTN making a massive investment in Nigeria (see below). The idea to launch mobile operators in South Africa started before the end of apartheid. With the lifting of the state of emergency, the scrapping of the apartheid laws and the release of Nelson Mandela, a political window of opportunity opened up. The government and the African National Congress (ANC) entered into negotiations to end ‘whites-only’ rule. In 1990 telecommunications had been one of the topics that was high on the agenda for negotiation. A national peace accord was signed in 1991. The following year a sector study for the Department of Post and Telecommunications suggested: ‘there is room for more than one network operator in the South African market’.33 The then chair of the existing government monopoly operator, Telkom, sent one of its young executives Allan KnottCraig34 ‘to investigate this new cellular technology’.35 The beginning of the end of apartheid allowed the formerly boycotted government to reach for new opportunities. The race to start the new mobile operators was signalled by a statement from the minister of posts and telecoms in the apartheid government, Dr Piet Welgemoed, that there would be a tender for two mobile licences

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Mobile voice calling booms

in April 1993. Strive Masiywa applied for his licence in Zimbabwe in the same year, but he was tied up in the courts until 1997. South Africa’s minister of post and telecoms met Vodafone CEO Sir Julian Horn-Smith in London and both sides made positive noises. Recognising that the ANC was likely to form a future majority government, Chris Gent, Vodafone UK’s managing director, set up a meeting36 with the ANC’s Walter Sisulu to assure him of its good intentions. Sisulu emphasised how important international investment was for the future government. Spotting an opportunity, Johann Rupert, head of luxury goods holding company Richemont and tobacco giant Rembrandt, worked with Cable and Wireless to create what became MTN: ‘they had the knowledge and they sent staff ’.37 Rupert pitched mobile as one means of providing universal access: ‘The widespread introduction of cellular phones to South Africa will impact on our lives more dramatically than television has.’ Two months after the announcement that two licences would be issued, the ANC’s chief of staff of its armed wing, Chris Hani, was assassinated. Negotiations between the ANC and the government ground to a halt, with accusations of the latter’s involvement in a right-wing plan to sabotage the talks: the apartheid security establishment was orchestrating a spiral of violence in the townships. Against this backdrop of swirling political uncertainty, the ANC was worried that the government was trying to issue these mobile licences before the forthcoming elections, which the ANC was certain to win. The ANC feared that the government would entrench white ownership and that the new mobile phones would end up largely in the hands of the white population, as fixed-line phones had: ‘Only 1% of Black people owned phones in 1993.’ 38 The government was asking for bids for these new licences before it had defined a policy and set up a telecommunications regulator. It was trying to establish a fait accompli before elections for a new government. As one contemporary industry hand remembered it: ‘In their haste to get everything drafted, the [Nationalist Party government] had forgotten to provide for a regulatory function. They had never needed

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Technology diffusion

a regulator before. My licence [at the time] was signed by the Postmaster General.’ 39 The ANC’s ‘point person’ for telecoms was Andile Ngcaba, the son of one of the few Black postmasters in apartheid South Africa: ‘Before I went into exile [from South Africa] I had worked in Philips as a radio technician. Eventually in 1994 I became the Postmaster General. My father had just retired from his post office. I was also head of communications for MK in Angola.’ All this gave him ‘a good grounding for the sector’. Ngcaba is tall, charismatic and can command the attention of a room. His rolling cadences build an argument effectively and he always comes with a good grasp of the arguments. Ngcaba was ‘a young lion in the ANC’ 40 and it was clear that he was going places.41 Ngcaba was already an observer at the ITU.42 He had prepared himself and his future colleagues after returning to South Africa. He partnered with Jill Hills, an academic at City University, London, who trained a lot of ANC people:43 We were not in government but we were trying to capacitate ourselves. The discussions and negotiations that started between the ANC and the apartheid government happened in parallel to that training … Because we received training from everywhere in the world, we realised how the [existing telecoms] law had to be changed … There was no clarity or transparency. […] I was arguing with the Nats. How do you license without due process? … The old Post Office did not have the knowledge of the wider world. It maintained the model where the government was responsible for everything. You needed to restructure this before you did any licensing.44

There were five bidders for the licences: Telkom (with Vodacom as the chosen company name), M-Net (with Mobile Telephone Network as the company name but known by its acronym MTN), Anglovaal, Barlow Rand and Suntel. Potential winners would be asked to pay an ongoing licence fee of 5% of the operator’s net revenue and annual radio fees of R5 million. The tendering companies needed ‘to provide evidence of their 30

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Mobile voice calling booms

ability to reach the widest possible community’.45 The two winners were Telkom and MTN. The Nationalist government tried to rush through Parliament an amendment that would have given the Postmaster General the power to give the licences legal force. The ANC was arguing that the bidding process should be put on hold until the planned elections were over or at least until such time it was part of the Transitional Executive Council. It threatened to revoke the licences of the winning bidders. It also took the position that the market (and, by extension, competition) would not deliver universal service: it took the view that most countries had introduced competition only once universal service had been achieved. There were also concerns about whether GSM was the right technology. ‘The resistance to the mobile operators getting licences was very strong.’ 46 Ngcaba raised his concerns on the mobile licensing to Mandela: We then met with President De Klerk, resulting in the matter being included in the negotiation agenda items handled by [now President] Cyril Ramaphosa and Roelf Meyer. Our concerns were licence conditions, diversity and universal service conditions. A task team was formed between the ANC and Unions on one side and Postmaster General and his team on the other.47

One key disagreement was over the level of competition that might be allowed. As Lyndall Shope-Mafole,48 one of the ANC representatives at the talks, said later: ‘even in the ANC camp, there were divergent interests, especially the trade unions, which were scared there would be a loss of jobs’.49 Former ANC activist and the then chair of NAIL, an investor in MTN, Dr Ntatho Motlana50 was adamant that the industry would grow faster and would put more mobile phones into more people’s hands if competition were allowed to flourish. The second major disagreement was over how Black participation in the economic ownership of the two new licensees could be increased: in practical terms the ANC wanted Black businesses and trade unions to have a stake, and the figure of 5% was named, although nothing was ever put in writing. If this was met, the ANC would recognise the validity of the licences. This presented some challenges: the trade unions were not 31

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wealthy organisations, and who would finance the purchasers?51 Furthermore, some of the originally agreed shareholdings had to be changed to accommodate these new shareholders. Another element of the agreement was that the Nationalist government would drop the proposed Posts and Telecommunications Amendment Act that would have legalised the licences in their existing form before the election. The negotiations were tremendously hard in political terms for those involved because the attention was focused on constitutional issues and wider issues of human rights. One of the negotiators, Cyril Ramaphosa,52 later said: At one point Joe Slovo53 asked: ‘Cyril, why are you diverting our attention on winning state power and finalizing a constitution with this mobile telephony thing?’ I answered that this was essential because mobile telephony would have a huge impact on the development of the country and the economy.54

Ngcaba recalled: ‘People were not interested because the focus was on human rights and what seemed like much bigger issues.’ 55 On 27 April 1994, apartheid ended with elections and the ANC took over the government. In 1996, legislation was passed that created the telecoms regulator South Africa Telecommunications Regulatory Authority, which merged with the Independent Broadcasting Authority to become the Independent Communications Authority of South Africa (ICASA). The legislation in 2000 creating it also set out as one of its objectives ‘to roll out telephone service to the previously disadvantaged’.56 In a pattern that was to repeat itself across sub-Saharan Africa, the granting of competitive licences to new mobile operators was much easier to achieve than the process of dealing with the incumbent government operators through privatisation. The ANC government took the view that a part-privatised Telkom would be the most appropriate vehicle through which it would ‘expand telephone service to under-serviced areas and populations’.57 In 1995, the Centre for Development of Information and Telecommunications Policy (CDIPT) captured ANC thinking at the time: ‘[It is important that] … Telkom has sufficient cash to fund the delivery 32

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of service, particularly in rural and remote areas … where returns in the economic sense … may be minimal.’ 58 In the face of bitter opposition from the trade unions, the ANC government sold a 30% stake in the company to Thintana Communications59 as its strategic equity partner.60 As part of that agreement Thintana was granted a five-year period of exclusivity in the terms of the public switched telecommunications service licence defined by the Telecommunications Act. Indeed, several later privatisations in other African countries used an exclusivity period to add value to the sale: for example, in Ghana and Senegal. Before liberalisation, state-owned monopolies were widely seen as the best way of achieving universal service. As a long-time South African industry player noted: Telkom was seen as part of the state apparatus. Everything should be statecontrolled. Both sides were used to the idea of controlling these kinds of assets … Telkom was very much the favoured player, both pre and post 1994. The 1996 Act created specific legislation … It said ‘thou shalt not do voice’. That was the cash cow and they defended it to the end [of the monopoly]. There was no ideological incentive to change it.61

The private shareholder Thintana Communications was dogged in its defence of the Telkom monopoly and prevented wider industry competition: Telkom was ‘highly litigious and sometimes predatory’,62 ‘[One of Thintana’s equity partners] SBC [Communications Ltd] was given certain assurances about the protection of its investment and they were past masters at defending [their] position. The amount of competition was held artificially low.’ 63 Outside of mobile telephony, Telkom fought every effort by other industry players to enter the market. Although it met its roll-out obligation of 2.81 million new fixed-line telephones, its high prices for installation, rental and calls ‘resulted in the disconnection of the vast majority of the new lines’.64 Users could not afford the new lines. In order to protect the value of the company’s 2003 initial public offering, the telecoms regulator ICASA was compelled by legal action from Telkom to approve high increases in the prices for local services. So, as Currie and Horwitz noted: ‘access to telephone service in South Africa has improved considerably since 1996, gains in connectivity have 33

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been accomplished almost entirely due to the market-led growth of pre-paid mobile telephony rather than by the legislatively mandated rollout of the fixed line network of the incumbent operator.’ 65 The government cancelled the ICASA regulations and delayed the entry of a third mobile operator and a second national (fixed-line) operator (SNO). The ANC had envisaged Telkom (and fixed lines) as the means to deliver wider access to telephony, but got it wrong: ‘People were surprised by the success of mobile. They said it would not get mass adoption and was not the answer to rural connectivity … but in 2001 mobile subscribers exceeded fixed lines.’ 66 With hindsight, it is clear that the pre-pay mobile phone model could deliver service to more people more quickly, at a price they could afford, than the state-owned, fixed-line telecoms incumbents. Pre-paid mobile phone calling wildly exceeded expectations in a pattern that was to repeat itself over the first five years of operation in many African countries. For example, Vodacom’s original business plan for South Africa envisaged it reaching 320,000 subscribers in five years and 500,000 in ten years. It reached 320,000 in eight months and 500,000 in two years. By 2003, nine years after its launch, it had geographic coverage of 95% of the population.67 Liberalisation in South Africa created two mobile companies – MTN and Vodacom – who, with sufficient investment backing, began to open up mobile operations across the continent. Vodacom started with Lesotho (1996) and expanded into three much larger markets: Tanzania (2000), DRC (2002) and Mozambique (2003). It was limited by a shareholder deal with Vodafone from expanding into certain parts of sub-Saharan Africa; thus, in 2000, Vodafone bought 40% of Safaricom in Kenya (see Chapter 7). MTN began its African expansion modestly by starting operations in Uganda, Rwanda and Swaziland (all in 1998) before moving on to Cameroon and Nigeria (both in 2000). There followed a range of acquisitions, including Telecel Zambia in 2005 and the much larger purchase of Lebanese company Investcom Holdings’ West African operations in 2006. Another large multinational with an interest in the continent was France Telecom and its mobile subsidiary Orange. France Telecom always seemed 34

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to be the preferred buyer for incumbent telecoms companies in francophone Africa, acquiring majority or controlling interests in Senegal (Sonatel), Mali (the SNO Ikatel), Côte d’Ivoire (Côte d’Ivoire Telecom) and Mauritius (Mauritius Telecom) between 1997 and 2002. Nigeria’s telecoms regulator runs a clean licence auction and international investors pile in The next major country to open up its communications markets was Nigeria. Under military rule, six mobile licences were granted between 1994 and 1998. But as many as 27 more were issued in the last four months of military rule under General Abdulsalami Abubakar. There was a widespread perception that granting licences was a way of getting income from bribes. According to a government spokesperson for the new democratic government, most of the licences were awarded to cronies of past military administrations and not on the professionalism or the technical competence of the operators. At this point, the telecoms regulator was regarded as part of the problem rather than part of the solution, and the new democratic government under President Olusegun Obasanjo cancelled all past licences. The government’s new policy was that ‘there shall not be more than 4 digital National Cellular Operators for an initial period of 5 years’ and that ‘the modalities for appointing the carriers shall be competitive and transparent’.68 The objective was to get 1.2 million subscribers in each of the six geopolitical zones in the country within two years. The reserve price for the new licences was US$100 million. The bidders were a mixture of local and international companies. There were three local companies of interest. Nigerian oil tycoon Mike Adenuga had already launched CIL on one of the cancelled licences, with just over twenty base stations. Another was Motophone, which was reputedly owned by a subsidiary of the Chagouri brothers, who were associates of the late military President Sani Abacha. MTel was an independent subsidiary of the government-owned telecoms company Nitel. The international companies bidding included Ideal-Levantis, a large Greek trading company 35

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in Nigeria that had partnered with Vodafone’s Greek subsidiary Panafone, and a relatively new pan-African mobile operator called MSI-Celtel. Six bidders pre-qualified and an inter-ministerial committee was appointed to evaluate the proposals. Few of the qualifying companies had ever operated a mobile phone network of any scale. Furthermore, many of the pre-qualified bidders were local companies that did not have the necessary funds to pay the new licence fee. Neither the Ideal-Levantis consortium nor MSI-Celtel qualified. David Easum, who was responsible for MSI-Celtel’s bid was furious: I caused a big stink and complained to the British High Commission, the US Embassy and the West African Telecommunications Regulators Assembly (WATRA). I tried to get out as much muck as possible as the whole process was a joke. None of the qualifying entities could raise the required US$100 million for the licence. This [lobbying] part went on for six months and then [the Nigerian government] decided the whole process should be restarted.

The whole process was cancelled on 28 February 2000.69 A new head of the telecoms regulator, the National Communications Commission (NCC), Ernest Ndukwe was appointed: I was actually head hunted for the job, as the government at the time was anxious to identify a competent professional for the job … Prior to my coming on board as CEO of the NCC, an attempt had been made at a licensing process … This was however marred by protests against the process which was adjudged as lacking in due process and fairness … When we [Ndukwe and the Board of Commissioners] came on board in February 2000, we were actually charged with coming up with a process that was open and transparent. As a Board of Commissioners, we decided that a spectrum auction process was the best way to ensure transparency and give confidence to serious investors.70

In June 2000 the NCC appointed London-based Radio Spectrum International as principal consultant. A lot more than just granting mobile licences was at stake for the Nigerian government: ‘[It would be a] signal to outside observers that the country was able to implement a public tender with integrity. If there were a successful conclusion to the auction, 36

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this would also begin to restore confidence in government processes within the country.’ 71 Although the consultants were anxious to avoid anti-competitive collusion that blighted other auctions of this kind, they were boxed in by what had happened at the cancelled auction: ‘In the previous Nigerian auction the designers effectively had no discretion over … key variables. The government had set a national policy of four licences and a licence fee of US$100 million, which became the reserve price for the new auction.’ 72 The big fear was that there would be four bidders or less, which would ensure everyone got a licence without having to exert themselves financially. As a result the consultants designed what they called a hybrid auction. If there were only four bidders, it would be a sealed bid auction, but if there were five it would be an ascending clock auction: In an ascending clock auction the auctioneer announces prices to bidders that increase over time (ascend with the clock) and bidders choose whether to accept or reject the announced prices. A bidder choosing to reject an ‘announced price’ reveals that he or she is not willing to pay that sum for the object being auctioned.73

These were known as waivers. The auction is over when the price rises to the point where the number of bidders willing to bid on the licences, at the required bid amount, is equal to the number of licences being auctioned. The winning bidders pay the required bid amount and each winning bidder is assigned one of the identical licences.

In the event, five bidders competed in an ascending clock auction: CIL (Mike Adenuga with German consultants Detecon as technical advisers); Econet Wireless and First Independent Network (a consortium of Nigerian investors); MSI-Celtel; MTN; and United Networks Mobile (a consortium led by Egyptian operator Orascom). Almost all of these bidders were already operating in several African countries at the time of the bid. The process allowed only six rounds of bidding a day, and so the seventeen rounds that the actual process took lasted two and a half days. Bidders were asked to increase the price they were willing to pay or use 37

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one of their three waivers to sit out a round. By day two, the bidding had risen to US$225 million and MSI-Celtel had used one of its waivers: ‘Because no other bidder had waived on day three, a high increment to the announced price was made in round 3 (USD20 million, 7.5%) to force the pace of exit. This resulted in three “Yes” responses and two “Waive” responses from MSI-Celtel and United (Orascom).’ 74 The next price hike was US$10 million, as the auctioneers could sense that everyone was reaching their limit. CIL continued to say yes, MSI-Celtel dropped out and Econet75 and MTN put in waivers. The final price of US$285 million was arrived at in round three. A combination of MSI-Celtel’s strategy of using all of its waivers as the price topped out and CIL’s Mike Adenuga76 saying yes to every price offered resulted in a staggering US$1,140 million being raised by the auction. The fourth licence went to Nitel’s MTel, which was forced to pay the same high price as all the other bidders. MTN pledged to invest US$1.4 billion over the next ten years. All these bids marked large sums for both the country and continent – neither of which ranked high on many investors’ lists. After the auction, private investment in the Nigerian telecoms sector grew rapidly: it became clear that the sub-Saharan African mobile market would be worth a whole lot more than industry analysts had believed. The Nigerian auction represented a ‘high tide’ mark for licensing transparency and encouraged a new set of pan-African operators as well as interest from other global operators. For one of the winners, the challenges were huge: ‘I spoke to the people who ran the licence process in MTN. It was a huge amount of cash for the company … Vodafone had said you can’t do business in Nigeria, it’s too corrupt. MTN’s share price immediately went down very dramatically.’ 77 But, as a World Bank policy document noted, investors were beginning to understand the value of the mobile phone opportunity in sub-Saharan Africa – for example, ‘In the Democratic Republic of Congo, the private sector has invested over $380 million in telecommunications projects in 2003 and in the first three quarters of 2004.’ 78 This was indeed a period when the telecommunications sector could ‘attract significant private investment, even in the immediate aftermath of conflict and during periods of conflict 38

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– as seen in the Democratic Republic of Congo, Liberia, Sierra Leone, and Somalia – important evidence of the benefits of private-sector led development.’ 79 MTN, having won its licence in Nigeria, recognised that the scale of the task was enormous, not least because it was – like the other operators – starting at ground zero: ‘The country was a complex place to operate and obviously there were no communications. A huge amount of work had to be done to build infrastructure … We had three networks to build: the GSM network, a transmission network and an electricity grid.’ 80 MTN Nigeria’s first CEO, Adrian Wood, arrived six weeks after it launched: There were less than one hundred base stations in Lagos, Abuja and Port Harcourt. We built out three and a half to four thousand cell sites and there are now seventeen thousand cell sites. It was like selling water in the desert. You had to wait two years to get a [fixed line] phone but it took only twenty minutes to get a cellphone. […] To start with there were ninety South African expats out of a staff of three hundred. In three years the staff had grown to three thousand. There was tremendous pressure from politicians to employ Nigerians.81

The absence of a reliable power network meant that the company (like many of the country’s citizens) used diesel generators to power its base stations. It had 144 tanker lorries criss-crossing the country delivering fuel: There were three strategic fuel dumps in secret locations, the largest of which held five and a half million litres. It was costing us US$3–3.5 million per month. We could not give all the contracts to one company. We had three suppliers and five contractors and they were all given weekly instructions. We used GSM vehicle-tracking technology to make sure the fuel was being delivered.82

Alongside the process of liberalising its telecoms market, in 2001 Nigeria proposed selling its state-owned incumbent Nitel to a strategic investor for a 51% stake. It was first offered for sale unsuccessfully in 2005 and sold only in 2015 to a consortium of local investors called NatCom Development and Investment,83 who bought its core telecoms assets. The 39

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company, which once had a hundred thousand employees, was by this time bankrupt. To roll out their networks, mobile operators needed land to put up their transmission towers. This was the point when traditional Africa and new Africa had to come to terms with each other. Emily Macauley, who would go on to become the first woman CEO of a mobile operator in sub-Saharan Africa, was responsible for rolling out the network in Burkina Faso for Celtel.84 ‘I needed land that was considered sacred land. I was talking to villagers but didn’t manage to get authorisation. I talked to the traditional chief and did my homework on their history and protocols.’ 85 She said to them: We’re not here to rip off your community. We want to enable you to talk to your children (who are in the cities or overseas) and create jobs for the youngsters who are still here. [The Chief] said now we understand: why didn’t you come and talk to us first? We were able to do corporate social responsibility programmes that are still ongoing for young girls who had suffered sexual harassment and female genital mutilation. The land was acquired because they understood its importance for the future. They needed to do some sacrifices and a ceremony. We bought goats and chickens for the ceremony and we were approved by the ancestors to use the land for something else.86

Macauley could not participate in the ceremony as a woman, but did attend. Three sheep were sacrificed: ‘A colleague from Finance said: “how can I put these in the books?” And I said, we have to try and figure it out.’ 87 In 2006 Macauley became Celtel’s CEO in Madagascar: ‘Although [it] is a matriarchal society, it was the first time they had seen a woman as a CEO. There were headlines ‘First African woman as a CEO.’ I said there was room for women in every industry in every country.’ 88 The uneven implementation of liberalisation and privatisation slows progress Whatever the impact of liberalisation and competition, it was always entangled with other things. There is an elaborate choreography that 40

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needs to be sequenced in a particular way for it to succeed. This starts with a need for a clear government policy that includes a privatisation process and the creation of an independent regulatory body. Once created and staffed, the independent regulator issues licences and creates a ‘level playing field’ to end monopolies. In reality, the process is messy and subject to political pressure from many different directions. No government likes to give away power, and sub-Saharan African governments find it harder than most. Many bend the rules and keep the telecoms regulator on a short leash. Senegal is a good example of ‘playing all the right notes but not necessarily in the right order’. It originally had two state-owned entities, OPT for domestic customers and Telesenegal for international communications. It had all the same problems of incumbent government fixed-line operators already highlighted: poor call-connection rates, an inability to collect its revenues, particularly from government, and too many employees for a very small number of lines. It first ‘corporatised’ its assets by creating a single entity called Sonatel. It held an auction and in 2000 sold 33.3% to France Telecom,89 10% to its employees and 17.6% to local investors, with the government retaining the rest. Board nominations meant that the government and France Telecom had to agree everything. With the government as a strong shareholder with a board position, it could continue to defend its assets, while also being the regulator for the liberalised market. No independent regulator was put in place until after all the main market decisions had been made. Sonatel was granted a five-year exclusivity period. It emerged later – after a new government argued with the second mobile operator, Sentel (part of Millicom) – that Sonatel had got its licence for a token amount, while Sentel had had to pay a significant sum for its licence. Once this became public, Sonatel was forced to pay the same amount for its licence as Sentel had paid. The net result was that Sonatel effectively dominated the market from the moment its new international shareholder, Orange, took over. This created a situation, as in South Africa, where the government, through partial privatisation, ‘created a private monopoly in place of the previous state monopoly’.90 41

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Over half the privatisations in sub-Saharan Africa up to 2005, involved the sale of minority stakes. As a World Bank report noted: ‘Minority stakes often indicate a mixed signal from Government about their commitment to handing over telecommunications operations to the private sector.’ 91 Although there had been considerable success in getting mobile phones into the hands of Africans, Figure 1 shows that by 2004 the wider liberalisation of communications remained a work in progress. The monopolies that remained in place provoked the next set of struggles, over access to international gateways and the fight for cheaper data (see Chapter 2).

Figure 1  Uneven and incomplete implementation of regulatory reform 42

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This explosion of mobile networks and users impacted on economic growth in developing countries, a wider category which includes subSaharan African countries. One of the early assessments of this concluded that mobile telephony has a positive and significant impact on economic growth, and this impact may be twice as large in developing countries compared to developed countries … The cost advantages of mobile phones as a development tool consist not only of the lower costs per subscriber but also the smaller scale economies and greater modularity of mobile systems.92

However, the benefits of mobile phone use were more than just economic: ‘Some of these were social in nature, while others concerned employment or business. The social impacts were very important in both South Africa and Tanzania. Greater contact and improved relationships with family and friends was one of the most significant benefits identified by the surveys.’ 93 The same report signalled a warning about the limitations of moving beyond mobile voice calling: ‘The combination of illiteracy and indigenous languages clearly has dramatic effects on the use of SMS messaging; the implications of this extend to other types of data usage (e.g. the internet).’ 94 In November 2004, Emtel in Mauritius launched the first 3G data service in sub-Saharan Africa. There were mobile data services like GPRS (General Packet Radio Service, an early form of mobile internet) but at this stage mobile internet or internet obtained from an Internet Service Provider (ISP) were used by a relatively small number of people. Furthermore, mobile networks were ‘narrowband’ (with relatively low capacity) and not designed for mass data use. Notes 1 The decades-long ownership struggle within Telecel Zimbabwe illustrates the difficulties with this approach. 2 Author interview, Dr Judith O’Neill, 12 October 2020. 3 It was this company that took the legal action over the mobile licence. 4 Author interview, Strive Masiywa, 23 September 2020. 5 Author interview, Dr Judith O’Neill, 12 October 2020. 43

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6 7 8 9 10 11

Author interview, Nic Rudnick, 15 June 2020. Author interview, Strive Masiywa, 23 September 2020. Author interview, Nic Rudnick, 15 June 2020. They reconciled before Rwayitare died. Author interview, Dr Judith O’Neill, 12 October 2020. Intelsat was at this time owned by a consortium of (mainly) government-owned telecoms companies. 12 The company that agreed to help him was Taide, a subsidiary of Norwegian telco Telenor. 13 Foreign exchange. 14 Author interview, Strive Masiywa, 23 September 2020. 15 R.J. Saunders, J.J. Warford and B. Wellenius, Telecommunications and Economic Development (World Bank, 2nd edn, 1994). The figure is made up of 3.9 million in Africa plus 2.5 million in South Africa, classed by the authors as an industrial nation. 16 ‘Creating Mobile Markets in Africa’, Note 19, IFC (19 September 2016): www.ifc.org/wps/wcm/connect/0aaeb58e-a4f6-4450-96e9-77cc5b2b995f/ EMCompass+Note+19+Mobile+Telecoms+SSA+9-30+Final.pdf ?MOD= AJPERES&CVID=ltYcl.Y (accessed 7 December 2021). 17 F. Odufwa, Trends in Telecommunications Markets in Nigeria (eShekels, 2004). 18 Later renamed Ghana Telecom. 19 L. Haggarty, M.M. Shirley and S. Wallsten, Telecommunication Reform in Ghana (World Bank, 2002), p. 7. 20 In other words, bribes. 21 Haggarty et al. Telecommunication Reform in Ghana, p. 8. 22 Ibid., p. 9. 23 ‘Telkom Kenya lost SH120B through diversion of calls, says Minister’, The Standard (10 July 2003), https://allafrica.com/stories/200307100156.html (accessed 7 December 2021). 24 ‘Free at last: 1st African VoIP forum held in Nairobi’, Balancing Act’s News Update 238 (14 January 2005), www.balancingact-africa.com/news/telecoms_ en/8013/free-at-last-1st-african-voip-forum-held-in-nairobi (accessed 7 December 2021). 25 Author interview, Bitange Ndemo, 19 June 2020. 26 Author interview, former Telkom Kenya CEO Sammy Kirui, 25 June 2020. 27 ‘Telkom Kenya on the rack as Government dithers over privatization’, Balancing Act’s News Update 238 (14 January 2005), www.balancingact-africa.com/news/ telecoms-en/8014/telkom-kenya-on-the-financial-rack-as-government-dithersover-privatisation (accessed 7 December 2021). 28 ‘Kenyan govt seeks SH25B to fund Telkom Kenya redundancy package’, Balancing Act’s News Update 272 (5 May 2006), www.balancingact-africa.com/news/ telecoms-en/6773/kenyan-govt-seeks-sh25b-to-fund-telkom-kenya-redundancypackage (accessed 7 December 2021). 44

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Mobile voice calling booms 29 R. Southwood, Less Walk, More Talk – How Celtel and the Mobile Phone Changed Africa (Wiley, 2008), p. 68. 30 ‘International settlements policy and U.S.-international accounting rates’, Federal Communications Commission (n.d.), www.fcc.gov/general/ international-settlements-policy-and-us-international-accounting-rates (accessed 7 December 2021). 31 Southwood, Less Walk, More Talk, p. 124. 32 Ibid., chapter 8. 33 Coopers & Lybrand, Telecommunications Strategy Study for the Department of Posts and Telecommunications (1992). 34 Later first CEO of Vodacom. 35 A. Knott-Craig, Second Is Nothing: Creating a Multi-billion Rand Cellular Industry (Macmillan and Rollerbird Press, 2009), p. 35. 36 Nelson Mandela’s biographer, Anthony Sampson, made the initial introduction. 37 Author interview, Andile Ngcaba, 15 August 2020. 38 Ibid. 39 Author interview, Mike van den Bergh, 28 August 2020. His licence was an early Value Added Network Service licence. 40 Author interview, Alison Gillwald, 9 July 2020. 41 On return from exile in 1990, he headed the Information Systems Department at the ANC headquarters in Johannesburg. 42 The ANC as a liberation movement had observer status and Ngcaba was part of the ANC delegation. 43 The Centre for Development of Information and Telecommunications Policy was founded by Andile Ngcaba in 1990 and based at Wits University as a policy research organisation and training centre for Black South Africans whom the apartheid government excluded. The centre received assistance from Sweden, the UK, Australia, Canada, the US and the ITU. 44 Author interview, Andile Ngcaba, 15 August 2020. 45 Knott-Craig, Second Is Nothing, p. 48. 46 Author interview, Alison Gillwald, 9 July 2020. 47 Author interview, Andile Ngcaba, 15 August 2020. 48 Later director-general, Ministry of Communications, and who eventually left the ANC to join the breakaway party Congress of the People. 49 J. Van der Walt, Yebo Gogo: It’s a Deal (Vodacom, 2003), p. 67. 50 Motlana was tried alongside Nelson Mandela. Julian Horn-Smith said that before the bid: “One ANC representative we met in London was Dr Ntaho Motlana, who later became chairman of rival network operator MTN.” He became a successful businessman, setting up New Africa Investment Ltd, and died in 2008. At the time of the negotiations he was Mandela’s doctor. 51 Knott-Craig, Second Is Nothing, pp. 60–2. 45

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Technology diffusion 52 Cyril Ramaphosa later became chair of MTN and is the President of South Africa at the time of writing. 53 Senior ANC member, leader of the South African Communist Party and commander of Umkhonto weSizwe, the ANC’s military wing. 54 Van Der Walt, Yebo Gogo, p. 65. 55 Author interview, Andile Ngcaba, 15 August 2020. 56 W. Currie and R.B. Horwitz, ‘Another instance where privatization trumped liberalization: the politics of telecommunications reform in South Africa – a ten-year retrospective’, Telecommunications Policy 31 (2007), p. 445. 57 Ibid. 58 T. Nkone, CDIPT – Summary of activities (CDIPT, 1995), p. 15. 59 This had two shareholders, SBC (which later merged with AT&T) with 60% and Telkom Malaysia with 40%). 60 Telkom SA Ltd, Thintana Communications LLC, SBC International – Management Services Inc and Telkom Management Services SDN BHD, Strategic Services Agreement (14 May 1997), www.sec.gov/Archives/edgar/data/1214299/ 000120561303000008/exhibit10_2.pdf (accessed 7 December 2021). 61 Author interview, Mike van den Bergh, 28 August 2020. 62 Currie and Horwitz, ‘Another instance where privatization trumped liberalization’, p. 447. 63 Author interview, Mike van den Bergh, 28 August 2020. 64 Currie and Horwitz, ‘Another instance where privatization trumped liberalization’, p. 446. 65 Ibid. 66 Author interview, Envir Fraser, 6 July 2020. 67 Van der Walt, Yebo Gogo, p. 41. 68 C. Doyle and P. McShane, On the Design and Implementation of the GSM Auction in Nigeria – the World’s First Ascending Clock Spectrum Auction (Charles Rivers Associates, 2001), pp. 4–5. 69 Southwood, Less Walk, More Talk, chapter 1. 70 E-mail, Ernest Ndukwe. 71 Doyle and McShane, On the Design and Implementation of the GSM Auction, p. 6. 72 Ibid. 73 Ibid., p. 18. 74 Ibid., p. 26. 75 Econet’s Strive Masiywa subsequently fell out with many of his local shareholders in Nigeria and control of the company fell victim to a complicated legal action. 76 Mike Adenuga failed to pay the licence fee. He argued that there was a clash over the operating spectrum he had been allocated that needed to be cleared up first. He forfeited his deposit and was barred from obtaining any new licences for two years. Two years later he came back as Globacom and was 46

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Mobile voice calling booms the only bidder for a unified licence for which he paid only US$200 million, US$85 million less than the original bidding price. 77 Author interview, Adrian Wood, first CEO of MTN Nigeria, 15 June 2020. 78 P. Guislain, M.A. Ampah, L. Besancon, C. Niang and A. Serot, Connecting Sub-Saharan Africa (World Bank, 2005), p. 22. 79 Southwood, Less Walk, More Talk, chapter 6. 80 Author interview, Adrian Wood, 15 June 2020. 81 Ibid. 82 Ibid. 83 Nigerian oil magnate and former defence minister, Theophilus Danjuma acquired a substantial stake in it in 2016. 84 There were still only three in 2020. 85 Author interview, Emily Macauley, former CEO, Celtel Burkina Faso, 1 July 2020. 86 Ibid. 87 Ibid. 88 Ibid. 89 France Telecom later acquired a further 9% of the shares. 90 Currie and Horwitz, ‘Another instance where privatization trumped liberalization’, p. 458 91 Ampah et al., Connecting Sub-Saharan Africa, p. 15. 92 M. Fuss, M. Meschi and L. Waverman, ‘The impact of telecoms on economic growth in developing countries’, Vodafone Policy Paper Series, Number 3 (March 2005), p. 14. 93 Ibid., p. 44. 94 D. Coyle, ‘Introduction’, in ibid.

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Bandwidth as the digital economy’s fuel: getting sub-Saharan Africa connected (1991–2015) Bandwidth is the petrol of the digital economy, and before the international cables were built it was supplied largely through satellite services: quality was often poor and the costs were high. Sub-Saharan Africa had ‘the lowest capacity in the world for international Internet bandwidth’.1 Without effective internet, there were few incentives to develop local African content. This chapter looks at how sub-Saharan Africa got connected to the internet, the birth of independent African ISPs and their fight to open up competitive international access. The first fruits of that struggle for users were cybercafes, which were new spaces to access virtual worlds. The final part of the chapter describes how the monopoly of international bandwidth supply – which kept internet prices high – was broken by a succession of new cables with innovative governance and finance structures. It was a classic ‘chicken and egg’ situation. No market for internet meant no finance for data networks. Without the latter, there would never be a larger market for internet. In these early years, the number of subSaharan African internet users was tiny. It had grown slowly from 0.2 million in 1998 to 3.2 million in 2002.2 As this suggests, providing bandwidth at an affordable price in sub-Saharan Africa was far more complicated than building mobile voice networks. Four things were necessary: 1 African countries needed to connect to the internet. 2 There needed to be regulation for a ‘level playing field’ that allowed competition. Only then would investment of any scale follow. 48

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3 The government-owned incumbent telecoms companies had to be forced to give up the various monopolies (bandwidth supply, international gateways, etc.) that affected the supply and cost of bandwidth.3 4 Ironically, the most challenging of these monopolies was created by the first major international cable, SAT3, and its business model had to be unravelled and remade at the same time as money was being raised for new cables. The cost of the internet to the user is made up of several different segments. For example, in broad terms, the supplier has to buy international, national and local capacity. At each stage, whether the supplier is a mobile operator or an ISP, they can either (if it is possible) buy from someone else or build their own network. As a World Bank report noted: ‘National backbones such as fibre optic cables are needed to bring internet connectivity.’ 4 In principle, few customers call for high pricing to make a return: this would mean a high-price, low-volume market. Sub-Saharan Africa had to make a transition to become a low-price, high-volume market. As prices came down, the volume of users would begin to expand: basic price elasticity needed to be allowed to do some of the work. The business model also needed to shift from the telecoms model of distancebased charging (per kilometre) to the internet model of capacity-based charging. The challenge in making that happen was that each of the different segments described – international, national and local – was either in monopoly control or had so little competition that suppliers were ‘rentseekers’ and could easily keep prices high. Regulators who might have intervened did not have the experience or resources (legal and financial) to take on these kinds of complicated ‘gatekeeping’ behaviours, or were disinclined to do so. But falling prices in any of these segments would create pressure to reduce prices in the next segment of the supply chain. Only after that had happened, would it be possible try to persuade people to use the cheaper internet access. The rest of this chapter looks at how each of the factors described above was tackled, including: getting connected to the internet, and the 49

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arrival of independent African ISPs who fought to break the monopoly of international gateways. This opened the first wider means of access to the internet for sub-Saharan Africans – cyber-cafes. The chapter’s later sections examine the battles fought to break the international fibre supply monopolies in order to lower internet access prices. Sub-Saharan Africa connects to the internet Before the internet, there was nothing except fixed-line telephones and faxes. As Network Start-Up Resource Centre (NSRC) internet pioneer Steve Huter remembered it: ‘You could show up in a country with absolutely zero connections.’ 5 The first TCP/IP6 connection in sub-Saharan Africa was made in 1991. This was two years after the World Wide Web started. It took nine years to get the forty-nine countries of sub-Saharan Africa connected. What started with South Africa in 1991 ended with Eritrea in 2000. So Eritrea connected nine years after the start of the World Wide Web started.7 This early development is studded with acronyms: the Internet Society’s African Internet History lists eighteen organisations, but it would be easy to add many more. Some were funders (the International Development Research Centre [IDRC], the World Bank, the United Nations Development Programme [UNDP], the United States Agency for International Development [USAID]), while others actually installed the modems and got things going (the Association for Progressive Communication [APC], Healthnet, NSRC, the Pan African Development Information System [PADIS]).8 Almost all of the first internet connections to African countries were with bodies like universities, non-governmental organisation (NGO) networks and international organisations.9 Development funders saw the internet as a way of giving African universities access to the kind of knowledge others were taking for granted elsewhere in the world. Information exchange was seen as a key plank for developing the service. As NSRC founder Randy Bush pointed out: ‘The internet at that point was not Facebook – it was scientists and NGOs.’ 10 Later, governments

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and businesses slowly started to become users. E-mails were a cheaper form of communication than international voice calls: ‘those who are connected are only interested in email and sending faxes … This is understandable as communication costs are very expensive in our countries.’ 11 Communication was a fundamental challenge. One of the early internet pioneers in Malawi, Paulos Nyirenda, provided a description that would apply to almost any sub-Saharan African country at that time: Communications … is difficult and expensive. Research and data communications have been achieved primarily by physical travel to a site – often over seasonal roads in poor condition – or by fax where available. This is also the case for most governmental and private sector communications. Most needed research and other data and information do not reach the people and decision makers who require this data to make important national and international decisions.12

Those organisations launching early internet projects were not primarily running these services to make money but their ‘sustainability’ was inevitably in question. Some became NGOs, while others like Zamnet13 or Malawi’s Sustainable Development Network Programme were set up commercially and became some of sub-Saharan Africa’s first ISPs. They often cross-subsidised their operations by charging commercial users more. At the beginning of the 1990s the building blocks for internet access were store-and-forward systems using FidoNet14 and UUCP,15 before a full IP gateway was installed. These technologies lacked user-friendly interfaces and were difficult to use, and the existing telecoms infrastructure often meant they were less than reliable. As Ugandan internet pioneer Charles Musisi noted: ‘in many universities typically less than 13 percent of academics actually use systems. It’s not surprising [as] they are presented with very basic interfaces, no help desk, no manuals, and only the very brave and technically-inclined actually make it.’ 16 Africans in positions of power were often also unconvinced by these new online technologies. A survey in Ethiopia revealed that a college outside Addis

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Ababa didn’t know what to do with the modems they had received and they sat in a cupboard for two years. Accounts published in 1995 are studded with examples of more active resistance: for example, in Ethiopia a chemistry professor who was a departmental head described it as a waste of time and resources, and in Senegal the head of the National Computing Service insisted on sending information by postal mail.17 ‘FidoNet, store-and-forward [and UUCP] were simple communications tools.’ 18 ‘It was a major step forward when the transition was made to TCP/IP.’ 19 The early African internet pioneers were experiencing problems that were hard to solve. To send e-mail or faxes they needed to make international connections to global networks like GreenNet, APC, United Nations (UN) organisations and commercial networks. They could either choose the government-owned incumbent telecoms companies’ telephone lines (although they were often reluctant to engage with the internet20) or Very Small Aperture Terminal (VSAT) satellite connections. Both were expensive, and the former were often unused to carrying internet traffic and were unreliable. Furthermore, in some countries both routes were government monopolies with pricing that reflected that. For example, in 1996 in Ethiopia a 64 Kbps wholesale link to the US cost US$11,700 a month.21 Network users outside their capital city would have to pay longdistance call charges to connect. On the basis of these types of connections, the internet was not very impressive: ‘A web page request can take up to 16 seconds to complete.’ 22 These were the challenges that the first commercial ISPs had to face: high wholesale prices and an often unco-operative incumbent telco, both of which contributed to very high prices for subSaharan African internet users. Opening the door for independent ISPs In June 1996, another initiative to open up the internet, the Leland Initiative,23 was launched as a joint programme between the US State Department and USAID. It was able to spend US$15 million over five years on its three objectives: to create an enabling policy environment and a sustainable 52

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supply of internet services, and to enhance internet for sustainable development. In the event, it worked across over twenty countries.24 ‘We had to identify the ISP community, help with the Network Operations Centre, [the gateway], pay for the space segment (on the satellite) for one year and then provide support when the industry was starting or addressing tech problems.’ 25 There was a quid pro quo: ‘The catch was that they had to modify their policies. The African technologists said the main issue was the government monopoly on telecoms … The governments I didn’t sign with were afraid of their people having information at their fingertips.’ 26 The first two countries to be connected following the Leland Initiative – Madagascar and Mali – were connected in this way within hours of each other in 1997: ‘They both had what I would call the banditry of the monopoly. We were seen by the incumbents either as a money tree or a threat to their monopoly.’ 27 Smaller countries were much more receptive: ‘These countries understood the importance of the internet.’ 28 Within fifteen months, Madagascar had five active ISPs (offering a service for about US$10 a month) and about one thousand subscribers.29 By the beginning of 2000, there were around eight thousand subscribers but ‘one internet account is sometimes shared by many persons’.30 Frenchman Eric Stevance had arrived in Mali to do his civilian equivalent of French military service at a French research institute, ORSTOM.31 He fell in love with a Malian and stayed in the country. He created the first internet e-mail exchange while at ORSTOM and then, in 1994/95, started an ISP, Malinet (within Bintta Informatique). The Leland Initiative provided the first full-time connectivity via leased line32 to Mali’s local incumbent telco, Sotelma. After issues with Bintta Informatique, Stevance set up another ISP, Afribone, in 1999. But Leland’s early notions of what constituted help were changed by Stevance’s experience: ‘The original idea was to give equipment to all those in the private sector. He said you’re going to come in and distort the market by doing that. He had already invested US$250,000. He was totally right.’ 33 The UNDP’s Internet Initiative for Africa joined the Leland Initiative in doing this work, by offering 50% of the costs of an internet gateway: 53

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‘We talked with [them] to harmonise how we were supporting different countries so there was no overlap.’ Eventually the two organisations between them opened some form of commercial internet in 45 sub-Saharan African countries. As former UNDP staffer Dandjinou put it: We wanted to help grow the ISP community in the country. The contract was signed on that basis. The [telecoms incumbents] didn’t want to open up to competition. I did lobbying and advocacy on why they should open up. It was hard. The francophone countries were the toughest ones. They were fierce monopolies. It’s cultural but not African ‘culture’ … We were coming from New York with a much more liberalised attitude to connectivity.34

African ISPs fight to break government monopolies on international access As a result of the opening up of internet gateways, the internet began to move beyond sub-Saharan Africa’s universities between 1992 and 199635 as the first commercial ISPs came into existence. By 1999 there were thousands, if not tens of thousands, of internet subscribers. Where they were able, they chose to use VSAT satellite connections rather than ‘leased lines’ from the government incumbent telco. For example, in Nigeria there were only three thousand paying internet subscribers and an estimated hundred thousand users for a country of 140 million.36 From 1995 onwards, cyber-cafes (see below) provided a more widely accessible way of using the internet. The African ISP Association (AfrIspa) was launched at ACT 200037 and nominated Eric Osiakwan (secretary of the Ghana ISP Association) as its interim spokesperson. Its membership included ISP associations from DRC, Kenya, Madagascar, Mauritius, Nigeria, South Africa and Uganda.38 ‘AfrIspa was a way of being able to talk about business and policy,’ 39 and its agenda was ‘to break the monopoly of incumbents, help ISPs flourish and reduce the cost of wholesale prices’.40 This small group of African ISP activists took on governments, regulators and state-owned monopoly telecoms companies to campaign for lower prices for international bandwidth, the 54

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introduction of local Internet Exchange Points (IXPs), the opening up of international gateways and the legalisation of VoIP.41 During this time an e-mail across town or to a neighbouring country might be routed via London, New York or Paris. The price of sending local traffic in this way was often cheaper than sending it locally or regionally. But if the traffic was kept local, it reduced latency, the delay between sending and receiving data packets. Local IXPs also created a point where ISPs and carriers could ‘meet’ to exchange local and international traffic. By 2004, ten country IXPs had been set up.42 In some countries, ISPs were legalised along with more liberal regulation, but in others they existed in a ‘neither legal, nor illegal state’. For example, in Guinea-Bissau ‘Eguitel/SITEC emerged as the first private ISP during that time albeit under ‘a very nebulous policy environment.’ 43 In Kenya, things had not really opened up: ‘I had large illegal wireless services covered by running a Mombasa ISP. There was a chance of going to prison for it but since President Moi owned two of the hotels we were managing, it was a risk I was prepared to take.’ 44 In 199945 key ISP figures like Richard Bell, Brian Longwe and others46 set up an association called the Telecommunications Service Providers of Kenya (TESPOK): ‘We said to each other we can’t keep fighting this battle alone.’ 47 The following year it opened Kenya Internet Exchange Point (KIXP). Bell remembered: ‘I was at a conference in Nairobi … The discussion was about liberalisation and the setting up of the IXP. The COO [chief operating officer] of Telkom Kenya said it will happen over my dead body. It’s part of our infrastructure monopoly. I said you don’t have a monopoly [of infrastructure] anymore.’ 48 Jambonet, the internet arm of the government-owned incumbent filed a complaint about KIXP with the telecoms regulator, Communications Commission of Kenya (CCK), saying it was illegal. It was duly closed down: ‘I got on TV and said this is absurd. A way can be found to stop sending e-mails to London and get them to go round Nairobi. CCK then said you can have your IXP back.’ It re-opened the following year, 2001. Roughly 30% of traffic was to a domestic destination.49 The regulator also made a strong effort to preserve the international gateway monopoly: ‘It had already issued only one licence for VSAT to Telkom Kenya. It was 55

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then going to give another VSAT licence to Gideon Moi (son of President Moi) and then close the process. They were trying to use international gateways to keep the market closed.’ 50 We created a thing called Fastnet, which was a consortium of ourselves, Wananchi and several other ISPs. We applied for an international gateway licence and were turned down. We went to the Communications Authority of Kenya and employed a lawyer to fight our case. A well-respected judge then gave a judgement that said: you have to give them a licence. There was a brief moment in 2002/3 when they were trying to keep Kenya closed.51

By contrast, there were five international gateways in Uganda at this time.52 During this period, Telkom Kenya installed filters in their data network that blocked certain types of internet services from transmitting to Jambonet, Telkom Kenya’s backbone service and the only internet gateway in the country. The blockage caused a total failure of all VPNs (Virtual Private Networks) and also cut off interactive internet applications such as MSN, AOL Messenger, Netmeeting and a number of other chat utilities. As a TESPOK statement noted: ‘This [type of action] is the sole domain of the industry regulator CCK. We have confirmed that permission was not sought from CCK, nor were they notified about the blockages.’ 53 In an almost uncanny echo of Kenya, Ghana Telecom cut off all ISPs, blaming their use of VoIP for causing huge losses to the company. The chair of its ISP association, the Ghana Internet Services Providers Association (GISPA), Francis Quartey, was even briefly jailed for using VoIP. In this case the regulator, National Communications Authority, was working hand in glove with incumbent telco Ghana Telecom and wanted to set up an investigation into how ISPs were causing its losses.54 Similar struggles happened in a range of other countries across sub-Saharan Africa. Cyber-cafes: new spaces to access virtual worlds The first sub-Saharan African cyber-cafes reportedly opened in Cameroon in 1992;55 South Africa’s first cyber-cafe opened in the Johannesburg suburb of Yeoville in 1995. By then, cyber-cafes were also opening in Nigeria, before springing up everywhere. They provided access through buying 56

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pre-paid computer time with internet access. Telecentres – the development community’s first cousin to cyber-cafes – which also started at this point, are explored in Chapter 6. The early cyber-cafes were not comfortable places and generally lacked any air-conditioning. But they often drew crowds of young users: ‘usually, only one of them knew how to use the internet, and helped all the others. But they were altogether fascinated.’ 56 The growth in the number of cyber-cafes was meteoric. For example, between October 2001 and July 2002 in Ghana, the number of personal computers (PCs) available in cyber-cafes went from 430 to 1,401, a three-fold increase in ten months.57 Cyber-cafes opened in larger cities and towns. In Cameroon, there were nine thousand cyber-cafes in Douala and Yaounde.58 Costs ranged from US$1 to US$2 per hour and became even lower as competition became more intense over time. Surveys across a range of countries found that although users included professionals, the majority were aged between fourteen and twenty-two and were mostly male, but not exclusively: for example in Yaounde, 40% were female. Cyber-cafes often provided a social activity for the young, a place of entertainment: ‘What made internet users better off than the general population was their relatively advanced level of educational attainment but little else beyond this.’ 59 In Gambia, the users tended to be students and people with families abroad: ‘Thousands were in exile [under Jammeh’s rule].’ 60 Businessmen used cyber-cafes to talk to suppliers.61 For others, they provided a mixed bag of opportunities: making US Visa Lottery applications; e-mail, chat forums, finding foreign pen pals, sending e-mails to relatives in the diaspora, listening to music, VoIP phone calls, applying to overseas colleges, porn, scams and, last but not least, research. For the latter, ‘access to the internet made up for an inadequate and outdated university library’.62 Doing things like finding online friends often tipped over into more dangerous pursuits such as cyber-hunting for husbands.63 VoIP calling (see Chapter 1) might, as in Tanzania, be illegal, but enforcement was often lax.64 Calls were significantly cheaper than through the fixed-line telecoms companies. In the case of Busy Internet in Ghana, it planned 57

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for 25% of its revenues from VoIP calling, but international calling costs fell so much that it was no longer so attractive for users.65 As elsewhere globally, porn was a great attraction in almost all sub-Saharan African countries. Busy Internet tried to stop access, but without success: ‘With porn, we tried all sort of things, blocking it, putting ads on computers, but people would get around it.’ 66 Internet scammers were also a strong feature of cyber-cafe use. These were widely associated with Nigeria and known as 419ers after the article in the Nigerian criminal code for ‘advance-fee’ fraud. They were also found in other countries. At Busy Internet it was mostly credit card fraud: ‘The 419ers are easy to spot. They are all young men, dressed in low-rise jeans and white T-shirts. They have multiple browsers open on their screens at all times: Amazon, Yahoo Shopping, FedEx, DHL.’ 67 Busy Internet received several e-mails a week from merchants and law enforcement officers in Europe and the US. It tried blocking all https traffic but this was a problem because it blocked Yahoo! mail: ‘We estimated the 419ers were 25% of our business. But finally we kicked them out. It turned out that people who were turned off by them came back, so revenue went back up.’ 68 Another popular line of business for cyber-cafes was burning compact discs, first of pirated music and later of video content. A couple of attempts were made to professionalise the cyber-cafe as businesses: examples included Africa Online’s eTouch franchises69 and Ghana’s Busy Internet, which envisaged itself rolling out in other countries across the continent. Both struggled to make viable businesses out of the cyber-cafe model, as first competition drove down prices and then habits changed with wider free Wi-Fi hot-spot access and, later, mobile internet. Busy Internet’s founder, Mark Davies, was British but became a successful entrepreneur in the US.70 He had a combination of considerable personal charm and a steely determination that allowed him to launch Busy Internet in eleven months in November 2001 after overcoming many challenges: ‘We had to find investors, get the rights to the building, hire an architect and construction company, all the while doing the cyber-cafe surveys to confirm our assumptions.’ 71 As one of its former CEOs remembered: 58

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‘Busy was about demystifying tech. We had our server behind a glass wall and we’d take people to see the satellite dish, which was the Rolls Royce of internet for its time.’ 72 Davies attracted in local investors (Databank Financial Services and Fidelity Investment) to pay for part of the almost US$2 million that it cost. It was more than a cyber-café, because in its hey-day it was cool spot to meet downtown, an entertainment venue and the place where local information and communications technology (ICT) players coalesced:73 ‘Busy was a truly public space that was not socially exclusive, that anybody could go to, and it was very aspirational, very modern. … Now we have the [shopping] mall, and no one feels awkward going in there, but back then, there was nowhere.’ 74 Although there was tremendous interest in Busy Internet from investors, most balked at the almost US$2 million start-up cost. After a decision was made not to roll out across the continent, Busy Internet was then run as a local facility, before eventually changing to become an ISP. The cyber-cafe closed down in December 2014. SAT-3 international cable arrives: won’t get fooled again The SAT-375 cable was launched in South Africa in May 2002, connecting nine African countries76 and costing US$650 million. Driven by the South African government telecoms company Telkom, it promised ‘high-speed, cost-effective connectivity’ and boasted that it had beaten off ‘other privately proposed projects’.77 It was built to meet demand for the internet that Telkom estimated would be six times the level of demand before it was built and would meet sub-Saharan Africa’s needs for twenty-five years.78 Although it would begin to provide more reliable fibre connections for internet services there was ‘a catch’. According to communications consultant Mike Jensen, prices were pegged at 10% below already expensive satellite prices, initially at around US$6,500 per Megabit per second (Mbps), although it was hard to get pricing tariffs from those selling the capacity.79 These high prices were ‘baked into’ SAT-3’s Club Consortium agreement for running the cable.80 The Club’s African shareholders81 – all 59

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government-owned incumbent telecoms companies – had granted themselves a monopoly to sell this international fibre bandwidth both in their own country and to international players wanting to connect to their country. Furthermore, no new entrant could become a member of the consortium without all thirty-five members agreeing to admit them. It was clear that no national monopoly member would vote for a new competitor to join. Unable to get an effective service from Nigerian consortium member Nitel, Nigerian mobile operator Glo took the decision to build its own cable.82 All these governance issues and more were covered by an agreement that it claimed was ‘commercially confidential’, and of which the managing agent was South Africa’s Telkom.83 Landlocked countries found themselves being charged as much for connecting to their neighbouring country’s landing station as it cost to go from the seaboard landing station to SAT-3’s landing station in Portugal. Namibia invested in the consortium but failed to put up enough money for a landing station: ‘the cost of transiting the traffic and the international leg make it cheaper for [Namibia’s] incumbent [telco] to send their traffic directly by satellite’.84 Other countries affected included Mauritania and Mali, and the rates identified at the time showed a broadly similar pattern across the other countries that the cable connected.85 Under pressure from Ghana’s ISP association, GISPA, consortium member Ghana Telecom lowered its prices: ‘We went to the minister and told him that Ghana Telecom was charging an arm and a leg for bandwidth. It was subsidising its ISP business and selling retail at below cost. We negotiated on the cost of wholesale bandwidth on SAT-3.’ 86 The price of an E1 link (2.048 Mbps) went down by about a third, from US$12,000–15,000 to US$8,050: ‘By 2004, any time Ghana Telecom reduced its retail prices, it had to reduce its wholesale prices. This created the competitive framework that bought prices down.’ 87 This was part of a broader campaign that is described in Chapter 6. In 2006, when the consortium shareholder agreement became available,88 it was evident that the excuse of ‘commercial confidentiality’, which consortium members had used with their governments and regulators,

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was not the full truth. Consortium members were allowed to reveal the details of the agreement to both government and regulators on request.

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EASSy: breaching the commanding heights of the digital economy The eastern seaboard of the continent had no fibre cable, so this was the obvious route on which to create an alternative to SAT-3. But the arguments over pricing and governance started by SAT-3 eventually led to the creation of three cables on this route rather than a single alternative. They also opened the market for much cheaper and more accessible international fibre capacity. At the annual East African Business Summit in November 2002, the business community invited telecoms operators to put forward proposals to build an East African cable: ‘There were concerns about the mode of implementation and that … it would go the way of SAT-3, with access only through monopoly operators. The key driver was Botswana, who had invested in SAT-3 but couldn’t have access to capacity. It made open access a condition of their involvement.’ 89 A preliminary memorandum of understanding for EASSy, the Eastern Africa Submarine Cable System, was signed in December 2003, which allowed initial feasibility work to be undertaken. However, as the project moved forward, the initial 11 signatories discovered that they were not a cohesive founding group.90 Among these initial signatories, there was a powerful grouping of private and government-owned South African organisations and a larger grouping of smaller and much less financially robust government-owned telecoms companies. Neither of these two groups had a cohesive view: MTN as a mobile operator did not want a monopoly cable, but Telkom had been the leading force on SAT-3. EASSy’s chair also objected to a monopoly: ‘Telkom SA wanted a monopoly cable. I didn’t want any point north of them to be a slave to South Africa. MTN was saying we’ll put up the money and you can buy the capacity from us.’ 91 The other organisations tended towards wanting to defend their positions through a monopoly of some kind but had insufficient resources

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to invest in pursuing that objective. Among the smaller telecoms companies was Botswana Telecommunications Corporation, which had money and had been burnt on its SAT-3 investment. They all wanted an east coast cable built, but had very different views about how it would be run. The most important development funder, the World Bank, which might underwrite a shortfall, was convinced that the cable would have an important social and financial impact but knew that it had to be managed in a different way to ensure lower cost pricing was achieved. To get some level of government support for this approach, it got a regional body, NEPAD,92 led by Henry Chasia, involved in the process: ‘This approach led to controversy. There were great tensions at a personal level and lots of delays.’ 93 There were a number of cable projects, and from an early stage NEPAD assumed that a single cable would be more viable. Its first meeting as part of the process was titled the ‘Development and rationalization of ICT infrastructure for Eastern and Southern Africa’.94 At this meeting a presentation by Mike Jensen summarised the position: there were EASSy, the East African Digital Transmission Project (EADTP), the South African Development Community Regional Information Infrastructure (SRII), Com-7 and a land-based project called Comtel. EADTP and SRII were examples of proposed routes on a map from government-owned telecoms companies, which lacked the necessary investment. Jensen offered a rationalised version of the many projects (identifying gaps) and noted, ‘Significant levels of capital will be required to finance these plans.’ 95 One observer at the meeting could already see the tensions that were developing: ‘I teamed up with the guy from MTN (John-Paul Bagiire) and a guy from Botswana. It’s not going to be what they want, I thought.’ 96 Both his drinking partners confirmed this as they had the conversation over a beer. Initially, however, there were many government-owned telecoms companies and governments who saw a single cable as a ‘win-win’: it would be a route to their getting funding for fibre infrastructure that they could control. The new cable needed to be run differently from what had gone before. In 2005 Anders Comstedt, Eric Osiakwan and I wrote a report entitled 62

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Open Access Models – Options for Improving Backbone Access in Developing Countries (with a Focus on sub-Saharan Africa)97 for infoDev,98 a World Bank programme. It laid the ground for the open access principles99 that would be used to judge whether to fund cable projects and landing stations, and it opened up the idea of Special Purpose Vehicles (SPVs) to enable both public and private funding of cables: ‘Open access was interesting because it was designed to have deeper systemic effects [on each country’s economy] and that was what the World Bank was looking for.’ 100 The SPVs could be formed with the objectives of enabling lower prices and that international cables would not seek high levels of profit: those involved would make money in the services layer. Capacity would be available ‘on non-discriminatory terms, taking initial investment and risk into account’. A Hybrid SPV would allow two groups to participate: those able to raise their own funding and those reliant on some level of donor investment that would take some of the risk on the condition of lowering prices: ‘Through Open Access, the market (with a gentle hand from the public sector) can begin to turn communication into a public good available to wider groups of people.’ 101 NEPAD: not ‘a gentle hand from the public sector’ Despite the tensions between those involved, the NEPAD process sought to get agreement on the governance terms for an SPV: the private sector companies were reliant on government permissions to implement whatever they wanted to do. The most practical initial outcome from the meetings was the creation of something called the Kigali Protocol,102 which sought to put in place a piece of African Union legislation to enshrine both management approaches (open access principles) and governance structures (an intergovernmental authority with a ‘golden share’ for government representation). By the end of 2006, twelve out of twenty-three countries had signed the Protocol, but there was still no clear route to implementation. While many of those involved felt that the document had some vision, it was too government heavy. As a former World Bank executive observed, ‘So 63

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much was missing.’ 103 Its critics feared that NEPAD was creating the equivalent of Air Afrique, the notoriously inefficient and loss-making multi-government-owned francophone West African airline: ‘All of a sudden NEPAD wanted to have a role beyond being a general facilitator and promoter on a policy level. Then it all went so wrong.’ 104 The show of government unity that the Kigali Protocol had aimed to create was soon to break up from pressures on it from several different directions. Kenya’s permanent secretary at the ministry of information and communication, Bitange Ndemo, set out his objections in October 2006: ‘The Kenyan Government is not going to sign the Protocol unless some fundamental issues are solved … NEPAD will have a lot of power in this project. How will it for example communicate to the Board of the SPV? We fear that the form of communication between NEPAD and the SPV would be in the form of directives.’ 105 Ndemo felt that the NEPAD meetings were often unproductive and there was no incentive to get things done. He saw the South Africans controlling the new cable through financing coming from their government pension funds.106 Mike Jensen, who also attended the NEPAD meetings, saw South Africa trying to control things: ‘South Africa started pushing its weight about. It was christened the America of Africa. Bitange Ndemo stood up to that kind of bullying.’ 107 Eventually the Kenyans had had enough: ‘We met in Cape Town. I told the meeting “This will be my last meeting unless decisions get made.” [South Africa’s director general, ministry of communications] Lyndall Shope-Mafole said “What did you say?” in a very condescending way. I said at this rate I don’t see us building a cable.’ 108 The Kenyan government was prepared to break ranks and build its own cable. Kenya’s suspicion that NEPAD was the ‘cat’s paw’ for South African plans was not helped by the fact that Henry Chasia and Lyndall Shope-Mafole were in a personal relationship.109 More bad news for NEPAD came when Seacom, a new private cable project, was announced for the east coast of the continent with an aggressive timetable that looked likely to overtake EASSy. Below the radar, ex-Africa One cable promoter Brian Herlihy had been working on Seacom, and in 2007 he went public: ‘NEPAD worked very hard to block it. They said 64

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no country in the world will have more than one cable. I was saying: “why stop any of them?”’ 110 Herlihy fought back by convincing President Kagame of Rwanda, who was chairing NEPAD, that the South African position was wrong: ‘We couldn’t agree on everything but they said we accept your open access story. Kagame supported the idea of open access and multiple cables. This made it difficult to block Seacom and the resistance from NEPAD fell away.’ 111 In 2006 at a NEPAD meeting in Kigali, Henry Chasia found himself subject to more criticism: ‘The Burundi delegate made a pretty rude comment to him like “up yours” which [the interpreter Albert Nsengyumva112] did not translate. Henry was being put on the spot and described as a “South African puppet”.’ 113 Prior to this meeting, Swedish adviser Anders Comstedt114 went with the Kenyan adviser115 to see Rwanda’s minister of communications, Albert Butare, to warn him of the dangers for landlocked countries like his own: ‘I was more brutal [than his adviser] … if it is run by the South Africans, the landlocked countries will be subject to deals made by the coastal countries … Tanzania’s Private Secretary was very open [with me] about this. “We’re going to have the landlocked countries pay for our terrestrial networks. Tanzania is a big country and its six neighbours will all want to connect to us.” I said they will simply build around you.’ 116 The independent EASSy consortium chair, John Sirha, was also far from happy: ‘NEPAD tried to steal it from us. Henry Chasia managed to see if he could get could get hold of this company. The aim was to take control of the company. I refused and fought those guys like hell.’ 117 With NEPAD effectively sidelined, the race was on between the private cable Seacom and the Kenyan government’s new cable project, TEAMS (The East African Marine System). Ndemo now had to deliver a costly and complicated project very quickly: ‘I saw the President. He asked me “what do you want to do?” I want us to build our own cable. “Where will the money come from?” We’ll mobilise the telecos. “Fine, what do you want me to do?” I want to be introduced to the Emir of the UAE [United Arab Emirates].118 The President drafted the letter and before I went there, I spent two nights reading about cables.’ 119 Ndemo wanted Etisalat to take a 50% share in the cable but it would take only 15%. A number of ISPs 65

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supported him (including Richard Bell), but Michael Joseph, CEO of Kenya’s Safaricom, was hesitant: he was already a member of the EASSy consortium and doubted whether any country could build its own cable. But as the project moved forward more quickly than EASSy, Safaricom agreed to make a 32% investment.120 Alcatel Lucent won the tender to build the cable, but at a time when Kenya was right in the middle of the chaos of post-election violence in 2008: ‘We needed the money but didn’t have Parliament to approve ways to get it.’ 121 Ndemo got the regulator CCK to give the project its initial US$3 million: some CCK board members resigned because of the decision. Both the World Bank and President Kagame were asking Kenya to give up on the idea of a cable, and President Thabo Mbeki of South Africa tried putting pressure on Ndemo: ‘The South African D-G of the ministry of communications, Lyndall Shope-Mafole, told her president to call our president. She said I was playing mischief. He didn’t act on what Mbeki was saying. At that time, people thought that Kenya would not need more than one cable.’ 122 Finally the finance for the cable was tied up and building began. But, three months before completion, Kenya’s Anti-Corruption Commission was raising questions about the initial US$3 million investment. Given Kenya’s history of non-existent capital projects that were elaborate scams, the Commission thought the cable was a way of diverting money to someone’s pocket: ‘You think we are all fools. This has not been done anywhere in the world … They were telling me you have fooled us and the President, even as the cable was physically landing on the Mombasa shore.’ 123 In the event, the cable took two years to build and, whatever corners Ndemo had cut to get there,124 the project was completed in a time scale that was impressive even by global standards: ‘[The Kenyan government] had never executed an infrastructure project. If we can build an undersea cable, we can build other things like the Thika superhighway.’ 125 Less good was the fact that the cable went into UAE’s Etisalat, an unliberalised telecoms company that insisted on above ‘above average transit fees’ 126 to send data internationally. 66

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Seacom: a private cable breaks down a wall of opposition

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Just before Seacom completed its financing, it closed an extraordinary deal in South Africa. The phone rang for South Africa’s research and education networking services provider TENET’s (Tertiary Education and Research Network of South Africa) CEO, Duncan Martin: An American voice came on the line. Seacom’s founder Brian Herlihy offered TENET 10 Gbps between Johannesburg and Sicily for US$23 million. I realised this was an unimaginable amount of bandwidth at an amazing price. I called my CTO [chief technical officer] in and said we’ve got to do this. He agreed enthusiastically!127

After going backwards and forward about where TENET might connect in Europe, the price was reduced to US$20 million. The 10 Gbps would be terminated in London at Telehouse and in South Africa it would be landed at Seacom’s new landing station at Mtunzini on the coast. Having agreed in principle to the deal, Martin had to find a way to distribute it to his university members and work out how he was going to finance it. South Africa’s second national operator, Neotel, was asking almost the same amount as the international leg was costing to get the capacity from Mtunzini to Durban. Martin turned to one of the country’s newest operators Dark Fibre Africa (DFA): They said to us we need three customers to justify doing this fibre route. We’ve got one already. I told them TENET would be two customers, if necessary. But they got more than three customers. DFA charged US$1 million for an IRU for six dark fibre pairs … [The government-owned incumbent] Telkom was very opposed to the deal and approached all the universities, saying there’s not going to be a Seacom cable and this is what we’re going to do for you.128

To finance the purchase, Martin worked out what it would cost over six years with interest payments and asked his twenty-six university members to make irrevocable bids for what they needed over six years in US dollars per month. Their bids raised 130% of the required amounts: ‘When we showed these commitments to Seacom, they said yes and the deal was 67

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signed on 15 November 2007.’ 129 Seacom’s Herlihy believed that ‘bandwidth was enabling. The shareholders bought into this perspective. We gave TENET a 70–80% discount on the condition they didn’t sell to commercial players.’130 Days earlier, on 13 November 2007, Seacom had closed its financing. Initial private investment in the Seacom project was US$375 million: $75 million from the developers, $150 million from private South African investors and $75 million as a commercial loan from Nedbank (South Africa). The remaining $75 million – a mixture of equity and debt – came from the Aga Khan Fund for Economic Development. KDN’s (Kenya Data Networks) CEO, Kai Wulff, was mulling his options between the TEAMS and EASSy cable projects when he too got a call: ‘If I help SEACOM, I will get the same prices at POPs131 anywhere on the continent. It had the best interconnection (internationally). I was not a big fan of any consortium because there were too many compromises.’ 132 It also meant he could make better use the fibre link he had built to Rwanda from Kenya. The Seacom cable opened for business just ahead of TEAMS in July 2009: [Data centre provider] Teraco and Dark Fibre Africa started feeding off each other and connecting to the Seacom cable. We were the first to host Akami, Limelight, Level 3 and Google. OTTs133 put a ton of pressure on bandwidth. There was a myth of too much supply. People keep building cables. What’s changing today is people are becoming more cloud orientated and we’re stepping up to bigger customers. Had Seacom not happened and there was just EASSy, the capacity would have been a fraction of what it is today.134

World Bank financing allows EASSy cable to go ahead While the EASSy consortium was free of NEPAD’s influence, it still had some of the same issues that it had started out with: It was a year late because it was a consortium. The project cost rose from US$180 million to US$236 million. It aimed to connect every East African country, even landlocked countries. The main carriers who could put money in were Telkom and MTN but we were still US$80–90 million short. We 68

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divided the cost by landing parties, for which you needed US$17–20 million for a landing station. People just laughed and said you have no money.135

The main source of potential funding for the shortfall was the World Bank. If it committed, other international Development Finance Institutions would follow; but many of the government-owned carriers were still opposed to the idea of a non-monopoly cable with open access principles. Eventually a breakthrough moment came: We (the World Bank and the IFC [International Finance Corporation]) attended a meeting at Victoria Falls. It was clear that the [EASSy] operators wanted financing but were not interested in open access. Basically, we had to walk out of that meeting. It was the biggest bluff we had. My colleague and I sat by the pool and he said ‘let’s enjoy this moment and see what’s going to happen’. A couple of folks said it’s time to reset and there was a willingness to be constructive about open access. We were building trust with the operators.136

After a three-day meeting in Nairobi in July 2006, it was agreed that the consortium should be structured as a Hybrid Special Purpose Vehicle. This enabled the diverse members of the consortium to get something of what they wanted. The bigger parties like Telkom and MTN formed the overall consortium with a sub-SPV that came to be called the West Indian Ocean Cable Company (WIOCC). The latter included all those who found it hard to get financing and who had to abide by open access principles. By now, the presence of two competitor cables and WIOCC’s open access structure created a downward pressure on prices.137 The WIOCC structure was also backed by the IFC, African Development Bank (AfDB), French Development Bank (AFD), German Development Bank and European Investment Bank. ‘We set up an SPV to raise the shortfall and got a bit of a grant from the World Bank. Each of the smaller carriers had to invest between US$0.5–1 million depending on the capacity bought.’ But even after the international donor funding, there was still a shortfall: ‘Every time I had a shortfall MTN would help with it. It would say “OK, this is the last time.” I did that a couple of times. It wanted to break the monopoly.’ 138 MTN took something more than a financial position: ‘There was no business case 69

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at this time but some saw the bigger picture. There was a doubt EASSy would ever happen and this led to other cables.’ 139 EASSy eventually opened for business a year after its two competitor cables – SEACOM and TEAMS – on 30 July 2010. The Nigerian women who wanted to build an international fibre cable to her country Meanwhile, on the west coast of the continent, Nigerian Funke Opeke set out two years earlier to become the first woman to create an international fibre connection in Africa and one of the first to be privately financed. Her story demonstrates how those returning from the diaspora brought with them fresh skills and confidence that enabled them to tackle new business opportunities and major infrastructural projects. On 18 April 2008 a meeting took place in Ikoyi, a district of Lagos, between Opeke, who wanted to build an international fibre cable to her country, and the banker and lawyer who would help her do it. Neither the banker nor the lawyer had taken a risk quite like this before. Despite Nigeria’s reputation for online scams, they needed to raise US$240 million to build a 7,000 km fibre route. Funke Opeke had returned from the US after twenty years of working in its telecoms industry and in a start-up (Sendmail). She came back to become CTO for the mobile operator MTN Nigeria. One of the founders and chair of Nigeria’s GT Bank, Fola Adeloa, persuaded her to get involved with the privatisation process of the government telco Nitel: ‘I saw the poverty of infrastructure. It was not interconnected within the country or to the rest of the world.’ 140 ‘We needed a private sector solution. We were doing the feasibility work and had talked to Nitel about reviving the SAT3 operation … Transcorp was trying to buy Nitel for US$250 million but the deal fell apart.’ 141 Nitel was probably one of the most corrupt government-owned telecoms incumbents and, after a while, Adeola decided he had had enough. Feeling slightly guilty about abandoning Opeke, he told her: ‘if there is anything you want me to help you with, you know where to find me’.142 70

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A year later Opeke came to him with the idea for the MainOne international fibre cable: ‘The internet gap had to be closed and people were desperate to get their hands on it but it was difficult to get it to work.’ Cables, like the one she was proposing, supplied the bandwidth for the internet that would make it both cheaper and more reliable. After a lot of discussion Adeloa agreed to chair the project, and they were joined by Nigerian lawyer Asue Ighodalo, who had also worked on the Nitel privatisation. The meeting in Ikoyi was intended to get everyone to agree on the first task of raising US$3.2 million to kick the project off. Aware that it was high risk, the banker Adeola said ‘if I’m going to support this, the spouses of the investors have to be present at the meeting as they need to give the go-ahead’ as it was family money they were investing. Opeke recalled: ‘I needed to have skin in the game. I had funded the work up to that point and got my sister there as family.’ She pitched the project to the assembled families and investors, and after some discussion the initial financing document was signed. Her former commercial officer described Opeke as ‘very articulate and self-assured. I’ve dealt with many entrepreneurs and you can tell fairly quickly who will fail and who will pass.’ 143 Despite it being in the middle of the 2008 international financial crisis, raising equity was comparatively easy: ‘The public offering made was over-subscribed. People were throwing cheques through the door as we sat there. We were able to attract bigger investors based on that.’ 144 The project had raised 50% of the required finance through equity: the rest was required to come from loans. Based on the equity finance, Opeke, Adeola and Ighodalo started the project, but found it much harder to raise the required loans. At one point they had to persuade the contractors Tyco to dispatch the cable-laying ship without having paid it any money: ‘We were not able to prove we could get all the debt but they trusted us and they were at risk when the ship sailed.’ 145 They found expensive loan financing from the development bank AfDB and, once the cable was launched, found better terms elsewhere. Raising US$240 million – even with a banker and lawyer who’d got your back – was a tough challenge: ‘I had an absolute belief in what was needed. Looking back, I think how on earth did I do that? I’d been in the 71

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US and the amount of money was not intimidating.’ 146 Opeke also has tremendous energy and focus: ‘She’s extremely driven, shoots straight from the hip and doesn’t take any prisoners!’ 147 But Opeke’s cable was not addressing an easy or obvious opportunity. Despite the rapid take-off of mobile voice, internet was seen as the ‘poor sister’ that failed to catch fire in the way that mobile voice had. Many sub-Saharan African policy makers were unconvinced that it was as important as voice. At an ITU regulators’ meeting in Maputo, one of them contributed to a debate about broadband by saying: ‘Broadband? Not in my village. That’s not what they need.’ 148 Opeke realised that ‘the [mobile] networks had been built for voice. They were very thin networks in capacity terms. Mobile operators needed to phase in capital to deploy their networks. They had to have sufficient market uptake to get payback. Distribution networks have been the biggest bottleneck.’ 149 Funke Opeke’s MainOne Cable got built, and opened for business on 22 July 2010. It was originally envisaged as a regional project (going all the way to South Africa) but had been held back by the attitude of some regulators who would not grant it landing rights: ‘In Nigeria, we got the first cable licence. Glo had not got a cable landing licence at that stage. We got a pioneer licence in Ghana. Other countries were not willing or able to move fast enough. The difficult reputation of Nigeria might have put them off.’ 150 MainOne Cable put in branching units to connect Senegal and Côte d’Ivoire at a later date, and its phase two connection to South Africa was overtaken by the later WACS (West Africa Cable System) cable.151 In September 2018 Orange bought into the MainOne Cable and the landing stations’ management in both countries: ‘Orange has commercialisation rights in Senegal but not in Côte d’Ivoire, where we both have commercialisation rights.’ 152 In December 2021 MainOne was bought by global digital infrastructure provider Equinix, as part of a wave of investment in data centre and fibre network infrastructure. Between the completion of SAT-3 in 2002 and the time of writing, thirteen international and regional fibre networks have been built to sub-Saharan Africa. A further seven are planned for completion by 2023.153 72

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Rolling out national networks to deliver the new international capacity Following the arrival of international fibre on the coast of the continent, there was a much longer process of building national fibre networks to deliver the internet to a considerably wider number of users. The expansion of national fibre networks again cast light upon the need for local fibre delivery networks and the need to open access both nationally and in the last mile. With growth in both these areas, demand for data expanded exponentially and continues to grow. One of the biggest of the national and pan-Africa network builders was Liquid Telecom:154 We started looking at fibre and built out ourselves in 2008. Then we started looking at a combination of acquisitions and building ourselves with a pan-African focus. Building out fibre was a highly regulated process. No one had built [in this way] before and you had to get approvals from suspicious regulators and agencies responsible for digging things alongside roads. We were operating across many countries, across Kenya, South Africa and many others.155

In September 2018, Liquid Telecom completed what it called its One Africa network.156 This Cape Town to Cairo fibre network was over 10,000 km in length, connected over six hundred cities and towns and required more than forty national and regional licences.157 The build of national fibre networks has continued all through the period after the major cable builds to the present day: ‘Liquid Telecom was somewhat disruptive because it was a cross-border operator, normalising the idea that you could operate across regions.’ 158 Getting open and competitive access to both national and local fibre networks has proceeded more slowly. But a couple of examples demonstrate how things have changed. In July 2008 Vodafone bought Ghana Telecom. One of the conditions of the sale was that its wholesale division (which ran its national and local networks) was separated from its other operations. Renamed NCBC, it offered fibre across the country at one price, irrespective of distance. Also, Botswana’s government telco, BTC, 73

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separated out its wholesale operation into a separate organisation called BoFiNet. In October 2015, Google’s Project Link159 committed itself to building out 1,200 km of local fibre in Ghana and Uganda: Our pricing is very different from the [current] market. The typical model is a combination of distance and throughput. We want you to put more capacity through to customers. Ghana’s still only using 10% of the capacity available at the landing station. The throughput model makes the cost of getting this capacity to the customer prohibitive.160

The reasons for Google’s involvement in this project are explored in Chapter 3. Among other national carriers, Abuja-based BCN (which started with 100 km of fibre in 2011) has plans to invest US$30 million in putting fibre across the states of Northern Nigeria. The dollar price per Mbps is the data equivalent of the price of wholesale petrol. This went from US$6,500 in 2001 to under US$5 in some countries in 2019. According to Liquid Telecom’s CTO: ‘International bandwidth used to be 50% of backhaul, now it’s only 10%.’ 161 The third wave of new international fibres – one of which will be built by Google and the other with Facebook’s involvement – will again reduce wholesale prices to an even lower level. Over the twenty years since 2000, all sub-Saharan African countries have connected to global fibre networks (except, at time of writing, Eritrea) and all landlocked countries also acquired fibre connections. Notes 1 Ampah et al., Connecting Sub-Saharan Africa, p. 29 n. 5: ITU Survey, 1,236 Mbits per sec in 2003. 2 ITU, Birth of Broadband (ITU, 2003) and ITU, World Telecommunications Development Report (ITU, 1999). 3 ‘In many countries incumbent operators still enjoy a monopoly of … provision of infrastructure for data and other Internet related services.’ Ampah et al., Connecting Sub-Saharan Africa, p. 9. 4 Ibid.

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Bandwidth as the digital economy’s fuel 5 Author interview, Steve Huter, NSRC, 23 June 2020. 6 Transmission Control Protocol/Internet Protocol. A set of rules that governs the connection of computer systems to the internet. 7 To access the full timeline, www.internetsociety.org/internet/history-of-theinternet-in-africa/ (accessed 7 December 2021), and see https://nsrc.org/ networkstatus (accessed 7 December 2021). 8 The document above provides a fairly complete list of early pioneers from this period. 9 Traffic on the MUKLA network in Uganda was 40% NGOs and 25% university-related activities. 10 ‘Unrepentant hippie and world networker Randy Bush enters net’s hall of fame’, Wired (14 May 2012), https://internethalloffame.org/ blog/2012/05/14/unrepentant-hippie-and-world-networker-randy-bushenters-net%E2%80%99s-hall-fame (accessed 7 December 2021). 11 M. Fall, ‘Francophone countries’, in National Research Council, Bridge Builders – African Experience with Information and Communication Technology (National Research Council, USA, 1996), p. 150. 12 P. Nyirenda, ‘Malawi’, in National Research Council, Bridge Builders – African experience with Information and Communication Technology (National Research Council, USA, 1996), p. 177. 13 The World Bank financed 80% of its first-year costs. 14 A worldwide computer network that is used for communication between bulletin board systems (BBSs). It uses a store-and-forward system to exchange private and public messages between the BBSs. 15 Unix-to-Unix Copy. Generally refers to a suite of computer programs and protocols allowing remote execution of commands and transfer of files, e-mail and netnews between computers. 16 C. Musisi, ‘Uganda’, in National Research Council, Bridge Builders – African experience with Information and Communication Technology (National Research Council, USA, 1996), p. 173. 17 See case studies by L. Adam and M. Fall in National Research Council (ed.), Bridge Builders – African Experience with Information and Communication Technology (National Research Council, USA, 1996), pp. 123–40 and 141–51. 18 Author interview, Pierre Dandjinou, 17 July 2020. 19 Author interview, Steve Huter, 23 June 2020. 20 Paulos Nyirenda had to obtain security clearance from the government before starting his internet project in 1993. Ethiopia’s socialist government banned the use of modems by anyone outside government. 21 National Research Council, Bridge Builders – African experience with Information and Communication Technology (National Research Council, USA, 1996), p. 130.

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Technology diffusion 22 ‘African internet history: highlights’, Internet Society (n.d.), p. 18, www. internetsociety.org/internet/history-of-the-internet-in-africa/ (accessed 7 December 2021). 23 Named after Democratic Congressman Mickey Leland, anti-poverty activist, who died in a plane crash in Ethiopia while on a mission there. See the original Leland Initiative site on Wayback Machine, https://web.archive. org/web/20011031204028/www.usaid.gov/leland/countries.htm (accessed 7 December 2021). 24 Chapters by B. King (Guinea Bissau), M. Muiruri (Kenya) and J. Miller (Tanzania) in E.J. Wilson III and K. Wong (eds), Negotiating the Net in Africa: The Politics of Internet Diffusion (Lynn Reiner, 2006). 25 Author interview, Lane Smith, 28 July 2020. 26 Author interview, John L. Mack, formerly African Telecommunications Director, US State Department, 7 August 2020. 27 Author interview, Lane Smith, 28 July 2020. 28 Author interview, Jon Metzger, 17 July 2020. 29 ‘Southern Africa trying to climb online’, Wired (18 August 1997), www.wired.com/1997/08/southern-africa-trying-to-climb-online/ (accessed 7 December 2021). 30 ‘Madagascar’, Balancing Act’s News Update 5 (14 January 2000), www. balancingact-africa.com/news/telecoms-en/47381/madagascar (accessed 7 December 2021). 31 Office de la Recherche Scientifique et Technique d’Outre-Mer. 32 A private telecommunications circuit between two or more locations provided according to a commercial contract. 33 Author interview, Lane Smith, 28 July 2020. 34 Author interview, Pierre Diandjinou, 17 July 2020. 35 For example, South Africa’s first commercial ISP launched on 1 November 1993. 36 ‘Internet: 13 years of growth from ground zero in Nigeria from 1960–1996’, Vanguard (27 October 2010), www.vanguardngr.com/2010/10/internet13-years-of-growth-from-ground-zero-in-nigeria-from-1960-1996/ (accessed 7 December 2021). 37 An ICT conference series run by Sean Moroney, Aitec, which was a melting pot for people involved in the African technology sector. 38 http://afrispa.skybuilders.com/launch.htm (accessed 7 December 2021). Many of these ISPs had been involved in the network training organisation AfNOG, which was launched by AfriNIC. 39 Author interview, Brian Longwe, 24 June 2020. 40 Author interview, Eric Osiakwan, 15 July 2020. 41 During the period covered by this chapter, many individuals worked on creating other parts of Africa’s internet infrastructure including AfNOG, Afrinci, AfTLD and NRENs. 76

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Bandwidth as the digital economy’s fuel 42 R. Southwood, Via Africa – Creating Local and Regional IXPs to Save Money and Bandwidth (IDRC and ITU, 2004). 43 E-mail, Brian King, formerly Leland Initiative, Guinea Bissau, 12 November 2020. 44 Author interview, Kai Wulff, 6 July 2020. 45 This was the year when legislation was passed liberalising the sector. 46 Including Brian Longwe, who became general manager, Afrispa. 47 Author interview, Brian Longwe, 24 June 2020. 48 Author Interview, Richard Bell, 25 June 2020. 49 ‘KIXP background’, Tespok (n.d.), www.tespok.co.ke/?page_id=11651 (accessed 7 December 2021). 50 Author interview, Richard Bell, 25 June 2020 51 Ibid. 52 Author interview, Badru Ntege, 17 August 2020. 53 ‘Kenya’s Jambonet blocks the internet but the private sector fights back’, Balancing Act’s News Update 139 (n.d., probably 2002), www.balancingactafrica.com/news/telecoms-en/10305/kenyas-jambonet-blocks-the-internetbut-the-private-sector-fights-back (accessed 7 December 2021). 54 ‘Desperate Ghana Telecom shuts off outgoing ISP lines, blames VoIP’, Balancing Act’s News Update 145 (n.d., probably 2002), www.balancingact-africa.com/ news/telecoms-en/10091/desperate-ghana-telecom-shuts-off-outgoing-isplines-blames-voip-but (accessed 7 December 2021). 55 M. Kah, V. Mbarika, K. Samake, J. Sumrall, Community-Based Information Technology Access: The Case of Cyber-Café Diffusion in Sub-Saharan Africa (University of Pennsylvania, 2006). 56 I. Ndiomewese, ‘A tribute to cybercafes and their undeniable role in Nigeria’s internet revolution’, Techpoint (16 December 2015), https://techpoint. africa/2015/12/16/cybercafes-in-nigeria-memoirs/ (accessed 7 December 2021). 57 ‘The rise of cyber-cafes – who will make it through 2002?’ Balancing Act’s News Update 91 (4 January 2002), www.balancingact-africa.com/news/telecomsen/47463/the-rise-and-rise-of-cyber-cafes-who-will-make-it-through-2002 (accessed 7 December 2021). 58 Kah et al., Community-Based Information Technology Access. 59 I. Brinkman, M. de Bruin and F. Nyamnjoh, Mobile Phones: The New Talking Drums of Everyday Africa (Langa and African Studies Centre, 2009), chapter 9. 60 Author interview, Papa Njie, Unique Solutions, 12 February 2021. 61 Ibid. 62 Brinkman et al., Mobile Phones, chapter 9. 63 Kah et al., Community-Based Information Technology Access. 64 Except in Ethiopia, where they closed down cafes offering this service. 65 E. McDermott, ‘Busy internet history’ (unpublished, 2013). 77

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Technology diffusion 66 Ibid. 67 Ibid. 68 Ibid. 69 ‘The rise of cyber-cafes’. 70 He was founder of Metrobeat and co-founder of First Tuesday. 71 McDermott, ‘Busy internet history’. 72 Author interview, Estelle Akofio-Sowah, 28 July 2020. 73 At one its most successful events the then Minister of Communications was asked some very tough questions. 74 McDermott, ‘Busy internet history’. 75 Its full name is SAT-3/WASC/SAFE. 76 In order, going south: Senegal, Côte d’Ivoire, Ghana, Benin, Nigeria, Cameroon, Angola and South Africa. 77 ‘Telkom history – 2000 onwards’, Telkom (n.d.), www.telkom.co.za/history/ TelkomHistory/index.html (accessed 7 December 2021). 78 Audio recording, Telkom (n.d.), www.telkom.co.za/history/TelkomHistory/ contentaudio/aud_7_undersea_cable_02.mp3 (accessed 7 December 2021). 79 Author interview, Mike Jensen, 17 February 2021. 80 A club consortium is closed group of investors that create their own set of rules to run an international fibre cable. 81 The SAT3/WASC section of the cable had 11 African shareholders. 82 ‘The SAT3 fibre – a monopoly that stands in the way of cheaper international bandwidth’, Balancing Act’s News Update 247 (4 February 2005), www. balancingact-africa.com/news/telecoms-en/7716/the-sat3-fibre-a-monopolythat-stands-in-the-way-of-cheaper-international-bandwidth (accessed 7 December 2021). 83 A fuller exposition of these arguments can be found in A. Jagun, ‘The case for “open access” infrastructure in Africa: the SAT-3/WASC cable – a briefing’ (APC, n.d., probably 2007). 84 ‘Namibia plans to link up to SAT3’, Balancing Act’s News Update 368 (10 September 2004), www.balancingact-africa.com/news/telecoms-en/18729/ namibia-plans-to-link-up-to-sat3 (accessed 7 December 2021). 85 ‘Industry’s dirty little secret – cross-country transit prices keep SAT3 international bandwidth prices high’, Balancing Act’s News Update 325 (6 October 2006), www.balancingact-africa.com/news/telecomsen/5247/industrys-dirty-little-secret-cross-country-transit-priceskeep-sat3-international-bandwidth-prices-high. (accessed 7 December 2021). 86 Author interview, Eric Osiakwan, 15 July 2020. For a longer description see E. Osiakwan, W. Foster and A. Pitsch Santiago, ‘Ghana – the politics of entrepreneurship’, in E.J. Wilson III and K. Wong (eds), Negotiating the Net in Africa (Lynn Reiner, 2006). 87 Author interview, Eric Osiakwan, 15 July 2020. 78

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Bandwidth as the digital economy’s fuel 88 ‘Revealed: the SAT3 consortium’s shareholder agreement they don’t want you to see’, Balancing Act’s News Update 317 (4 August 2006), www.balancingactafrica.com/news/telecoms-en/5454/revealed-the-sat3-consortiumsshareholder-agreement-they-dont-want-you-to-see (accessed 7 December 2021). 89 Author interview, John-Paul Bagiire, formerly of MTN Uganda, 7 August 2020. 90 The initial 11 signatories were Telkom Kenya, Zanzibar Telecom, Uganda Telecom, MTN Uganda, TDM Mozambique, Telkom South Africa, Djibouti Telecom, Sentech, Telecom Malagasy, Rwanda Telecom, and Botswana Telecom. 91 Author interview, John Sihra, formerly chair of EASSy, 28 July 2020. 92 The New Partnership for Africa’s Development (NEPAD) is a socio-economic development flagship programme of the African Union (AU), adopted by African leaders at the 37th Summit of the Organization of African Unity (OAU) held in Lusaka, Zambia, in July 2001. However, it was driven by South Africa and its then president, Thabo Mbeki. 93 Author interview, John-Paul Bagiire, 7 August 2020. 94 NEPAD workshop on the development and rationalisation of ICT infrastructure for Eastern and Southern Africa, 28–30 July 2004. 95 The presentation also included the Dynamic Map and future bandwidth projections produced by Paul Hamilton. 96 Author interview, Anders Comstedt, 21 July 2020. His presence was requested by Mozambique’s then minister Venancio Massingue and paid for by SIDA. 97 A. Comstedt, E. Osiakwan and R. Southwood, Open Access Models: Options for Developing Backbone Access in Developing Countries (with a Focus on Sub-Saharan Africa) (World Bank, 2005), https://documents.worldbank.org/ en/publication/documents-reports/documentdetail/154331468005135945/ open-access-models-options-for-improving-backbone-access-in-developingcountries-with-a-focus-on-sub-saharan-africa (accessed 7 December 2021). 98 Mostafa Terrab was an energetic promoter of open access ideas. 99 The ideas for open access in the period under discussion came from Sweden and the operation of municipally owned Stockolm wholesaler Stockab. 100 Author interview, Kerry McNamara, formerly infoDev, 3 August 2020. 101 Comstedt et al., Open Access Models. 102 Its full name is Protocol on High Level Policy and Regulatory Framework for NEPAD Broadband ICT Infrastructure for Eastern and Southern Africa. 103 Author interview, Laurent Besancon, 20 August 2020. 104 Author interview, Anders Comstedt, 21 July 2020. 105 ‘Kenyan government wants changes to EASSy protocol’, Balancing Act’s News Update 324 (13 October 2006), www.balancingact-africa.com/news/ telecoms-en/5182/kenyan-government-wants-changes-to-eassy-protocol (accessed 7 December 2021). 79

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106 107 108 109

Author interview, Bitange Ndemo, 19 June 2020. Author interview, Mike Jensen, 17 February 2020. Author interview, Bitange Ndemo, 19 June 2020. ‘Shope-Mafole defends herself ’, Business Day (Johannesburg) (12 November 2008). ‘She insisted that she always acted correctly, and denied there had been any conflict of interest arising out of her personal relationship.’ Her contract as director-general for the Ministry of Communications was cut short in February 2009 when she left the ANC and joined the opposition party Congress of the People. 110 Author interview, Brian Herlihy, Founder, Seacom, 23 June 2020. 111 Ibid. 112 An early internet pioneer in Rwanda and minister for infrastructure (2011–13). 113 Author interview, Anders Comstedt, 21 July 2020. 114 Employed by Swedish donor agency SIDA to help the landlocked countries. 115 Shem Ochuodo. 116 Author interview, Anders Comstedt, 21 July 2020. 117 Author interview, John Sihra, 28 July 2020. 118 EASSy chair John Sirha also introduced the Kenyans to Etisalat, the Emirates telecommunications company. 119 Author interview, Bitange Ndemo, 19 June 2020. 120 Ibid. 121 Ibid. 122 Ibid. 123 Ibid. 124 Ndemo obtained an executive order from President Kibaki rather than wait for cabinet approval. 125 Reported words of Francis Mathaura, author interview, Richard Bell, 25 June 2020. 126 Author interview, Richard Bell, 25 June 2020: ‘the existence of three cables makes them all stay honest’. 127 Author interview, Duncan Martin, former CEO, TENET, 15 July 2020. 128 Ibid. 129 Ibid. Also, TENET obtained a subsequent Development Bank of Southern Africa loan. 130 Author interview, Brian Herlihy, 25 June 2020 131 Points of Presence: access points or physical locations at which two or more networks share a connection, for example allowing a company to connect to a wider network. 132 Author interview, Kai Wulff, 6 July 2020. 133 OTT are over-the-top media services offered directly to viewers via the internet. 134 Author interview, Brian Herlihy, 25 June 2020.

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Bandwidth as the digital economy’s fuel 135 Author interview, John Sihra, 28 July 2020. 136 Author interview, Laurent Besancon, 20 August 2020. 137 ‘EASSy members agree to hybrid SPV and KDN still going ahead’, Balancing Act’s News Update 315 (14 July 2006), www.balancingact-africa.com/news/ telecoms-en/5612/eassy-members-agree-to-hybrid-spv-and-kdn-still-goingahead (accessed 7 December 2021). 138 Author interview, John Sihra, 28 July 2020. 139 Author interview, John-Paul Bagiire, 7 August 2020. 140 Author interview, Funke Opeke, 30 June 2020. 141 Ibid. 142 ‘Funke Opeke: Nigeria’s cyber revolutionary – how one woman set about connecting her country’, Al Jazeera (24 September 2015), www.aljazeera.com/ program/my-nigeria/2015/9/24/funke-opeke-nigerias-cyber-revolutionary (accessed 7 December 2021). 143 Author interview, Bernard Logan, commercial officer, formerly chief commercial officer, Main One, 30 July 2020. 144 Ibid. 145 Ibid. 146 Author interview, Funke Opeke, 30 June 2020. 147 Author interview, Olu Teniola, 13 July 2020. 148 Author’s recollection. 149 Author interview, Funke Opeke, 30 June 2020. 150 Ibid. 151 Ibid. 152 Ibid. 153 For an excellent visual mapping, see Many Possibilities, https:// manypossibilities.net/african-undersea-cables/ (accessed 7 December 2021). 154 Now renamed Liquid Intelligent Technologies. 155 Author interview, Nic Rudnick, CEO, Liquid Telecom, 15 June 2020. 156 Other networks of this kind exist on a smaller scale. In November 2020, Orange launched its Djoliba network connecting Senegal, Mali, Côte d’Ivoire, Burkina Faso, Liberia and Guinea. 157 ‘Africa’s first major terrestrial cable takes ten years to complete and connects 660+ cities and towns – Liquid Telecom’s next pan continental route may be east–west’, Balancing Act’s News Update 943 (21 September 2018), www.balancingact-africa.com/news/telecoms-en/44060/africas-first-majorterrestrial-cable-takes-ten-years-to-complete-and-connects-660-cities-andtowns-liquid-telecoms-next-pan-continental-route-may-be-east-west (accessed 7 December 2021). 158 Author interview, Steve Song, 5 June 2020. 159 In May 2017, it expanded its ownership base with US$100 million investment from Andile Ngcaba’s Convergence Partners, Google, IFC and Mitsui.

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160 ‘Google’s Project Link commits to building 1,200 kms of metronet fibre in three key Ghanaian cities and changes the pricing model’, Balancing Act’s News Update 799 (16 October 2015), www.balancingact-africa.com/news/ telecoms-en/34894/googles-project-link-commits-to-building-1200-kms-ofmetronet-fibre-in-three-key-ghanaian-cities-and-changes-the-pricing-model (accessed 7 December 2021). 161 Author interview, Ben Roberts, CTO, Liquid Telecom, 14 July 2020.

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3

Cheaper mobile internet and low-cost smartphones come together with apps sub-Saharan Africans want to use (2005–18)

Before internet use could reach more sub-Saharan Africans, three factors had to align: lower mobile internet prices and faster speeds; cheaper mobile phones with better functionality; and attractive and widespread content apps on these improved phones to breed internet use. The opening section of this chapter looks at how this process looked from two very different perspectives: the one of a mobile phone fanboy who became an influencer; the other of an African mobile executive who grappled with some of the first mobile internet roll-outs. From their different perspectives, they illustrate both the early potential for mobile internet and the barriers it had to overcome. The chapter then details: the five-year road to cheaper mobile internet prices; how the issue of cheaper smartphones was, and continues to be, tackled; and the arrival of Google and Facebook and how they contributed to the increase in African internet users. Mobile internet from different ends of the telescope: the fanboy and the mobile operator executive Nigerian Jesse Oguntimehin and Sierra Leonean Alex Kamara have never met. But their lives cover the gap between better international bandwidth arriving and mobile internet taking off in sub-Saharan Africa. One was a mobile phone ‘fanboy’ turned digital marketer and the other was a 83

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telecoms executive, and they looked at events from different ends of the same telescope. Before 2005, most Africans had a basic phone. It had voice calling, SMS text messaging and long battery life: ‘Given that a swathe of the population didn’t have regular access to electricity, battery life was one of the most critical features when purchasing a device. FM radio and a torch were also popular, again due to lack of electricity.’ 1 Nokia was the dominant handset seller. As a former employee remembered: ‘When I joined Nokia, in 2009 we had a 60% market share and a 15% fake Nokia [phone] share in sub-Saharan Africa. In 2006 when I was working in Mozambique in my previous job, Nokia had an 80% market share.’ 2 People with money generally had early pre-smartphones (from Nokia) or a BlackBerry. Others had featurephones that could access the internet, store and play music but didn’t have touch screens. In 2008 Vodacom signed an agreement with Apple to sell its new smartphone – the iPhone – but its high cost meant low sales. As a young teenager, Jesse Oguntimehin saw someone using an early Motorola flip phone with an antenna and dreamed of having one himself: ‘I didn’t know it was possible for me to own a phone. I thought it was only for rich people.’ 3 When mobile internet first came to Nigeria, Oguntimehin accessed it on a used phone: ‘I would browse and I found it interesting. I started using GPRS [a slow, early version of mobile internet] on second-hand phones imported from the UK. My phone had a very small black and white screen with a numeric keypad.’ Unable to find a job when he left Lagos State University in 2008, Oguntimehin started blogging about mobile phones. He joined Twitter and Facebook in 2010. Before long Nokia was sending him press releases; other brands followed suit. ‘I became an influencer … It was new and I was able to meet people and share opinions. I had a small media in my pocket … Social media was very exciting. You could learn and broadcast to the world and fight boredom.’ 4 Alex Kamara was luckier on the job front: a Bolivian friend and fellow student at London Business School contacted him and asked whether he’d be interested in coming back to Africa for a job at Millicom.5 The 84

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company – which operated with the brand name Tigo – was one of the less well-known leading players in the industry and the only one to operate solely in Africa and Latin America. Millicom sold to ‘bottom-of-thepyramid’ customers and was very margin focused. Kamara joined in July 2007 in Ghana, finding that mobile internet was not an easy sell because the only cable, SAT3, had very high wholesale prices. Tigo Ghana was the first company to buy from African handset vendor Mifone in April 2008: it bought five thousand standard 2G featurephones that sold for US$40–50: From July 2008 to end 2009 we started to offer ‘baby’ browsing experiences. We’d offer things that you can look at in a browsing kind of way. It was not like making a request using SMS. Facebook started to offer SMS versions of Facebook. Lots of people were getting access for the first time.6

By the time Tigo launched in Rwanda in 2010, the country had three international cable options and cheaper pricing was easier to negotiate. But mobile internet was of secondary importance to the priorities of trying to attract new, low-income customers to use voice calling and mobile money: With data [for internet] people were expecting it would be cheap. We struggled with how to define consumption and value. With voice, it’s minutes. Kilobytes and megabytes don’t translate in the same way. [Customers] would say data sucks. We were unable to price like for like. We spent a ton of money and we funded giveaways and bundles.

The cost of building new data networks kept prices high: ‘It became expensive because the costs [of supplying data] were in the ground. It was difficult to get returns.’ 7 The rest of this chapter looks in turn at how the major barriers to mobile internet – the cost of using it, cheaper mobiles to access it and more attractive and useful apps – came about. The five-year road to lower mobile internet prices With the arrival of the new international fibre cables, wholesale bandwidth prices started to go down on the east coast of Africa after 2010 and 85

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subsequently elsewhere. However, retail internet pricing for customers did not immediately follow: ‘Operators continued to charge customers the same amount but give them greater volume.’ 8 One African technologist caught the mood of disappointment in 2010: ‘Prices for internet access have gone down by a factor of 2 rather than 10 as expected. Indeed prices are still high in most of Africa …’.9 It was not a question of being able to supply the customer, as the number of countries offering 3G mobile internet in sub-Saharan Africa had gone from two in 2005 to twenty-four in 2010.10 Often initial 3G coverage was limited and wider roll-out was slow after the initial launch. As the GSMA (Global System for Mobile Communications Association) noted in 2011: ‘Mobile broadband penetration remains very low in Sub-Saharan Africa where operators are yet to launch extensive 3G services and limited infrastructure still remains a key barrier to growth.’ 11 Despite the disappointment at high prices, those who could afford the 3G internet began to use mobile internet: the number of mobile broadband connections tripled from 5.4 million in 2008 to 15.3 million two years later.12 The example of Kenya illustrates the dramatic scale of this upturn. When Safaricom launched 3G in May 2008, initial uptake was slow with only 392,964 users by December. But by March the following year the number had quadrupled to nearly 1.7 million.13 Safaricom did not sell its 3G as a separate premium service as other mobile operators did. It also successfully sold plug-in ‘dongles’ (small modems) for computers, making access easier from Wi-Fi ‘hot-spots’. Research ICT Africa’s annual household surveys between 2007/8 and 2011/12 highlighted the growing impact of mobile internet. Across four of the nine countries surveyed, households with access to the internet rose from below 5% to above 10%: in South Africa they rose from 4.8% to 19.7%; in Namibia, from 3.3% to 11.5%; in Botswana, from 0.1% to 8.6%; and Ghana from 0.3% to 2.7%. In a number of the countries surveyed, daily internet use doubled, and in several countries mobile became the most widely used device for first-time use of the internet.14 Although 3G mobile internet speeds and quality were often variable, the new services delivered wider availability and faster access times. However, it took some time for dramatic increases in speeds to be delivered. In 2014 the average 86

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download speed in sub-Saharan Africa was 2.5 Mbps, only rising to 7.2 Mbps by 2018.15 Over five years after the arrival of the international fibre cables in 2009, the retail price of mobile internet began to fall. For example, in Nigeria the cost of 1 GB (gigabyte) fell from US$11.15 in second quarter 2014 to US$2.78 in fourth quarter 2019. Across the nine countries for which there are full data,16 all fell to around US$2–3 per 1 GB. South Africa was the exception, charging US$6.81 per 1 GB in 2019.17 The number of mobile internet subscribers increased as prices fell, more than doubling from 120 million in 2014 to 270 million in 2019.18 However, there still remains a considerable gap between use in urban and rural areas. Nonetheless, price levels for mobile data continue to be an issue in many sub-Saharan African countries, and the manner of selling it discourages frequent use. In most instances, smaller pre-paid data bundles prove to be most expensive to those who can least afford them. Time limits on data use contribute to a very sparing use of data.19 MTN defines active mobile data users as those using more than the rather modest 5 MB per month. Across the five countries for which the company provided data, the level of active data users as a percentage of all mobile subscribers ranged from 38% in Nigeria to 67% in South Africa.20 However, in its 2020 year-end results it reported that its active data subscribers had reached 12.4 million across the group, up from 6.5 million in the first half of the year. Getting cheaper smartphones Between 2009 and 2014, two high-profile handset brands – Nokia and BlackBerry – could lay claim to offering smartphones, and sold enough phones in different market segments to succeed in sub-Saharan Africa. When I was inducted at Nokia’s HQ in 2009 I was shown a video about where Nokia was going. It was all about multi-use devices and different form factors. But when I got the first Nokia devices in my hand, I thought ‘bloody hell, these are sluggish and slow’ … It was clear that the Nokia operating system, Symbian, was not working. The phones looked good but the operating system was outdated.21 87

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But Nokia introduced app stores and integrated payment services before anyone else: The apps were decent and were working well enough. My job between 2009 and 2013 was to get developers in tech hubs to generate an ecosystem. We had to catalyse overall growth but in doing so make them want to choose us. But [the tech hubs] became Android tech hubs. It was too difficult to build for Symbian. It was game over by 2013.22

To try building a path to smartphone use, Nokia had put Facebook apps on its featurephones: it also included WhatsApp, a music service and a camera: ‘The majority of data users were using data-enabled Nokia featurephones. They were slow but like smartphones. So the next time the users bought a device, they said why don’t we buy a smartphone?’ These Facebook-enabled featurephones were popular between 2009 and 2011 but cost between US$80–100. It wasn’t until 2011 that Nokia launched its Asha range at a US$50 price point. The Asha range was an attempt to blur the differences between featurephones and smartphones. A Nokia employee noted that The first low cost Android phones came from Samsung. The Chinese (like Tecno) started coming in and competing at the lower end. Their devices were not as robust as Nokia’s but they were cheaper. When I left in 2013 it still had 30% volume share. When I arrived in 2009 we had 45% of top-end devices but that had collapsed by the end. […] In 2004/5 you had to invest millions to set up a device factory. Concept Nokia built a standardised chipset on which we built an engine that could be used for ten to twenty different devices. The Chinese copied the idea of these engines. There were then many counterfeit devices. You could set up shop for US$2,000 and manufacture mobile handsets.23

The turning point was between 2011 and 2012: carriers wanted to sell more smartphones as they started to appear in informal channels from places like Dubai. Another player noted that Around 2013 Chinese handsets with Android took major market share. With the Shenzen ecosystem, these were unbelievably cheap. The Android 88

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OS could be ported on to them and worked reasonably well. When Google built the first HTC … it was slow and didn’t really work. I thought it will not have mass adoption, except it embraced the touch screen like Apple. It was the touch screen that made the difference.24

The other contender in what was becoming a crowded mobile phone manufacturing field was RIM’s BlackBerry. Up to 2012, it was outselling smartphone competitors in three of the continent’s largest markets.25 It had two functionalities that particularly endeared it to its African users: a physical keyboard and the relatively cheap, pay-for messaging service, which allowed users to exchange messages. It was also an aspirational device and the BlackBerry PIN – the code that allowed people to connect to others – was seen as differentiating its users from ordinary SMS message senders: ‘“The average Nigerian has a very healthy interest in status and luxury. So if somebody asks for your BlackBerry PIN and you don’t have one …” [the interviewee] trailed off with a dismissive flick of her false eyelashes.’ 26 It had such cachet in Nigeria that a 2011 Nollywood film was made called BlackBerry Babes. Despite the fact that BlackBerry’s sales had declined globally by 2012, it survived in South Africa until 2015 – often with three-year-old phone models.27 A Huawei ‘pitch deck’ from 2012 explains why both Nokia and BlackBerry were overtaken. Huawei was selling its low-end IDEOS smartphone to Vodafone Ghana, based on its success in Kenya with Safaricom. It contended that mass smartphones would take the market share of middle-range featurephones and that 20% of all subscribers were potential smartphone owners. At that point, only 10% of Ghana’s mobile users’ phones were data enabled (about 200,000 smartphones) and most were using Nokia, Samsung and BlackBerry. The core of Huawei’s argument was that the Android OS fundamentally changed users’ behaviour, opening up many things for which they would need to buy data in order to enjoy. This trend was part of a wider pattern. As an ex-Google employee put it: ‘Traffic jumps in emerging markets as Android reaches the user.’ 28 Operators were willing to subsidise smartphones to promote data use for internet. A phone review from the launch period described the 7,999 Kenyan shillings (US$80.83) price of the IDEOS phone as ‘arguably one of, if not the lowest 89

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recorded retail price globally for the device’.29 But the US$80 price point (achieved with a subsidy) was still some way short of the US$50 price point needed to expand the number of users. The first attempt to build a cheap smartphone for internet use in subSaharan African markets came to fruition in 2012. That was the year that Rick Fant was hired by Mozilla Corporation, the commercial side of Mozilla Foundation,30 to work on a low-cost smartphone. He had previously worked for both Microsoft and Vodafone, building stores for apps and ecosystems: ‘Mozilla had already gotten started in building the Firefox OS. I was hired to create an ecosystem. There was a team of engineers building the store and other things.’ 31 Mozilla was motivated by needing to get itself ready for wider mobile internet use so as to continue getting income from the use of the Firefox browser. It also saw the new mobile operating systems (Android, iOS and Windows) as ‘walled gardens’ 32 that would slowly strangle the more open nature of the web. Mozilla had a belief that the current ecosystem was not doing a great job for underserved users to get access to the web. Apps on the market were closed apps. It wanted a phone that was open so you could innovate on it and operate it openly. Existing app stores were closed shops and not everyone could participate. The economics were slanted to the big players. The phones available were too expensive for low-income markets. The mobile was where the web and services were going to occur.33

So Mozilla set out to build a more accessible, lightweight OS and make it available on low-cost mobile phones. It believed that Firefox OS would work well on low-cost hardware and disrupt the more expensive smartphone market.34 Fant’s pitch in 2014 was to offer a low-cost mobile as a force for social change: ‘The web in Africa is a liberating force for addressing poverty and opening up education.’ 35 Mozilla did not manufacture the phones itself but connected the mobile operators with the original equipment manufacturers in China, who installed its Firefox OS on the phones that were produced. It had a number of successes in sub-Saharan Africa. Orange rolled out a Firefox OS Klif phone in eleven countries: in Kenya this cost US$39.93, less than a third 90

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of the price of MTN’s Fire Mobile at US$145.36 The drawback of the Orange Klif was that its users aspired to the increasing sophistication of Android phones. For people upgrading to a phone with more features, an Android smartphone ‘was more like a laptop in their pocket’.37 A Kenyan reviewer at the time said it didn’t have ‘a decent camera’ and there were very few apps. The Klif competed with Safaricom’s own branded cheap phone, the Neon, and both were based on Alcatel handsets. Although over five million Firefox OS phones were sold globally, the project was not a commercial success and was closed in 2016: ‘These were not big numbers. The Firefox OS was attempt to influence business models and structures. We wanted to open the web and make it more available. We also wanted to align the business models so it was not such a closed ecosystem.’ 38 The Firefox OS did not eventually support a full smartphone and it had to downgrade to a featurephone: ‘Our ecosystem was not big enough for suppliers to invest money in … We’d evolved to a lesser device like a featurephone and we could have gone on to build an even skinnier OS.’ 39 KaiOS (see below) took over where Firefox OS left off. Accelerating smartphone adoption In May 2015 Jesse Oguntimehin, who had kick-started his career by blogging about mobile phones, joined Chinese handset vendor Transsion as its digital marketing manager in Nigeria. From 2008 the company had steadily built up its three phone brands – Infinix, Itel and Tecno – becoming by 2017 sub-Saharan Africa’s leading phone vendor,40 taking 40% of sales and replacing Nokia in the smartphone segment. It kept specs low but achieved the difficult price-to-performance ratio. It focused locally, offering Amharic, Hausa and Swahili keyboards. Also, its dual-SIM phones got ‘instant heat’ from users shopping between different network calling prices. By 2015, smartphone penetration was beginning to get a foothold in sub-Saharan Africa. According to the respected Global Attitudes Survey by Pew, as a percentage of the population, it varied between 4% (Ethiopia, Uganda), Nigeria (28%) and 37% (South Africa). The survey concluded: 91

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‘Richer nations tend to have higher internet access rates and higher reported smartphone ownership.’ 41 The challenge of providing cheaper, internet-accessible feature and smartphones continues to the present. The latest contender, KaiOS, was spun off from mobile phone vendor Alcatel Mobile42 in 2016, attracting a US$22 million investment from Google in 2018. It is sells phones based on a development of the Firefox OS described above. Its first big success was in selling to Reliance-owned Jio in India: ‘Africa is much more complex. There are a number of countries and a diversity of operators.’ 43 If KaiOS can succeed in the many countries of Africa, it can probably succeed anywhere: in 2020 it was in about half of sub-Saharan African countries. KaiOS is persuading operators to commission low-cost mobile phones pre-loaded with KaiOS: ‘With [it] you can run with a much smaller data package (for example, 200–300 MB at US$1–2 per month) and still have a useful experience. MTN and Orange are building bundles for KaiOS and that’s very important.’ 44 Its current featurephones compete with a stripped-back Android OS called Android Go. KaiOS is also tackling one of the tougher barriers to full use of its phones: literacy, in terms reading and writing and technical expertise. Sixty per cent of KaiOS phone users45 surveyed in Nigeria use it only for calling and texting: ‘A lot of people get lost in the device. The new designs will bring people to more usage step by step. They show its functionality over time. They make connection to and disconnection from data easy for them.’ 46 KaiOS is working on a low-cost 4G smartphone, but the tech literacy challenges remain. The business challenge is being able to achieve ‘critical mass’ and the break-even point. At the time of writing in April 2021, KaiOS had sold 135–140 million devices: ‘In terms of volume, 350–400 million would be healthy. It would be a sustainable and healthy ecosystem. It’s a challenge for a small company to be global.’ 47 The dark side of smartphones There is a dark side to the spread of smartphones that very directly affects Africans in some countries. The phones require five minerals in their 92

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production: what are known as the three ‘Ts’ (tantalum, tin and tungsten), cobalt and gold. Cobalt is a key ingredient of lithium-ion rechargeable batteries. These minerals are mined in Central African Republic, DRC and a number of other countries, and the conditions under which a part of the output is mined are akin to modern slavery. According to one investigation: The Democratic Republic of the Congo is the source of more than 60% of the supply of cobalt used around the world, and at least 20% of this output derives from mining by peasants, called ‘creseurs’. These ‘creseurs’ dig, wash, and sort cobalt-containing heterogenite stones at so-called artisanal mining sites located across the ‘copper belt’ of the southeastern provinces of the DRC. The remaining cobalt from the Congo is mined at industrial sites largely operated by foreign companies.48

The author of the investigation claims that at least thirty-five thousand children are employed in the dangerous task of mining the cobalt. Children, as young as six, earn between US$0.50 and US$0.80 a day. They suffer lacerations and broken bones, as well as permanent damage to their health by handling cobalt with their bare hands and by breathing toxic mineral dust all day. More than 220,000 adults work as miners in similarly awful conditions: ‘At Kimpese, more than 11,000 creseurs, including 2,000 children, mine cobalt and gold in deplorable conditions under military guard. By all accounts, many of these people are slaves.’ 49 Although the complexities of the supply chain make it difficult to monitor where and how these mineral are mined, the Responsible Minerals Initiative is seeking to create standards for responsibly mining.50 Google and Facebook on a mission With cheaper mobile internet access and smartphones, the third element needed was attractive content apps. This was accelerated by the arrival of two US companies, Google and Facebook. Of course, their services were available before they came to sub-Saharan Africa, but they applied their money, skills and influence to addressing the whole ecosystem, 93

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including connectivity. And in the case of Google, its immediate motives were not purely driven by profits.

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Google: ‘Are we doing something about Africa?’ The apocryphal tale about how Google got involved in Africa is that its then CEO, Eric Schmidt, attended a Clinton Global Initiative event: ‘He was called out by Bill Clinton who asked him: “what are you doing in Africa?” He drew a blank.’ 51 Afterwards Schmidt sent an e-mail to his business opportunities team asking: ‘Are we doing something about Africa?’ The answer was no. After internal discussions, ‘he said here is a US$100 million budget, go spend it on Africa. Spend it legally on tech-driven projects that have an impact on the ecosystem and create long-term prospects for Google.’ 52 This was not an isolated gesture but something that was intended to create new markets: ‘There was a lot of talk in Silicon Valley about how this internet thing is maturing in developed markets and we must go to emerging markets.’ 53 After some preliminary investigation, Google appointed a team to start working in sub-Saharan Africa in 2008. This included Kenyan Joe Mucheru54 as sub-Saharan African lead, working from ‘a nice office that was very Googley’. But the team itself was in a strange position. It was not running a commercial strategy, but seeking to lay the ground over a ten-year period for future growth. It was neither a charitable brief nor a ‘bottom line’-driven mandate. This mixture caused some initial confusion among potential recruits: ‘I said I don’t want to sell ads. [The person trying to persuade me] said you’re not listening. It’s not about selling ads.’ Nevertheless, the European ad sales team did in fact create a position in South Africa in 2008.55 First off, this new ‘orphan’ team had to get the attention of the commercial teams working in Google’s headquarters in Mountain View: We then enter into this very strange zone and process. Every commercial team works very independently. You have to get their interest because unless the strategy has been sold, it’s non-existent.

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Cheaper mobile internet and smartphones People were coming up with leads and things they wanted to explore. You would have people in Mountain View telling you what was happening in Africa and they would win the argument by the volume of their voices. Whatever team it was in Mountain View, it didn’t give a damn what [CEO] Eric Schmidt had said to you. The lower the level in the company, the harder it was. We were paralysed [into] doing small things … We couldn’t spend our budget. We got a lot of attention from Eric Schmidt and Google’s Founders. [Google Co-Founder Larry Page attended TED in Arusha in 2007.] Eric kept saying ‘I gave you budget and you’re not spending it.’ […] Eventually the Africa team got a director (in 2013) and an Excom was created that was much more oriented towards implementation.56

Google chose four areas to focus on: access to the internet and infrastructure, local content, policy and regulation and the start-up ecosystem. One way to encourage access to the internet was through the Google Access Program for African universities, which was made available in Ghana, Kenya, Nigeria and Uganda. It provided a mixture of its apps, affordable laptops, Wi-Fi access and bandwidth. It created what it called university-based Developer Groups. The company saw itself as putting the internet into the hands of future leaders: ‘Google’s mission is to organise the world’s information and make it universally accessible and useful. This program aims to improve the accessibility of the internet for Africa’s future leaders – University staff and students.’ 57 As one ex-employee saw it: ‘It was about democratising access to the internet through a bunch of free tools.’ 58 Put more cynically, this might be seen as getting ‘an early start on securing its next generation of customers’.59 Before Google opened offices in sub-Saharan Africa, most professional Africans accessed their e-mails through Microsoft’s Hotmail or Yahoo! Mail: ‘Yahoo! had won the email [client] battle without doing anything. I remember going to an event in Côte d’Ivoire and the minister gave me his card with a Yahoo! e-mail account on it. We had our engineers consulting with government, saying you could use Google Suite and have your data

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hosted in the cloud. The minister insisted that the data centre must be in Côte d’Ivoire but he had a Yahoo! e-mail account [hosted in the US].’ 60 With hindsight, Google looks like the easy winner of the fight to become the number one search engine and to become the second most-used e-mail client after Apple’s iPhone. But in 2008/9 Google was a long way off this position: Microsoft and Yahoo! dominated the sub-Saharan African e-mail client market. By the end of 2008, depending on who was doing the counting, Google Search had between 64% and 72% of the market share. Whatever Google’s motivations, adding new Google Search and e-mail client users certainly contributed to its growing market share in sub-Saharan Africa over a five- to ten-year period.61 Given the continuing difficulties of delivering fast, affordable bandwidth to African customers, Google sought to bring access to its content closer to them. By 2012, it had put local caches in internet exchange points and data centres in five countries: ‘YouTube is available in all African countries but has been localised in a number of African countries including: South Africa, Nigeria, Ghana, Kenya and Uganda. In one West Africa country with a local Google cache server in 2012, the amount of traffic through the local IXP is now 800 Mbs and the majority of it is YouTube use.’ 62 The experience for African internet users improved: ‘The overall user experience improved and locally cached YouTube video was much faster.’ 63 Google worked on a variety of infrastructure projects, including Wazi WiFi (wholesale Wi-Fi supply), a TV White Spaces trial in South Africa64 and Google Link in Ghana, Liberia (supported by USAID funding) and Uganda, which eventually was spun off as CSquared65 and Loon (balloons providing rural internet access).66 All these initiatives were aimed at driving down the cost of internet access for Africans. It tried to work with mobile operators but encountered a high level of suspicion and distrust: ‘We tried to make partnerships with mobile operators on infrastructure but had a round of useless conversations for two years. They were cautious around any third-party player but particularly Google. They were afraid of us “going from the living room into the bedroom”.’ 67 But mobile operators nevertheless opened their doors to Google products as a way of encouraging 96

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more internet use, which would benefit them. As transitional measures Google piloted Search using SMS and chat using Gmail to SMS for free: ‘Search via SMS took off in pockets. They were mad about it in Senegal. It was a way to offer something to mobile operators. They signed up to this because the bill for the SMS was going out to Google.’ 68 In terms of its work to increase interest in local content, one of the Google Africa team’s early wins was the Google Maps team’s decision to map the continent: ‘Google Maps was a big focus. It brought a dynamic into the mapping community. There was no street numbering and there’s no e-commerce without proper mapping.’ 69 This started in South Africa in 2010 and now covers all sub-Saharan African countries. Some of the Africa team also rolled out the (now defunct) free classifieds service, Google Trader, to allow people to buy and sell products and find jobs. Users without internet access could also post items and search for deals by sending an SMS to a special short code: ‘Google was not focused on sales but on making the internet useful to people.’ 70 Google Baraza allowed people in countries across the continent to share knowledge with each other by asking questions and posting answers. Over time, Google translated its main user interfaces into many African languages, starting with Swahili and the twelve official languages of South Africa, creating local translation networks, using both professionals and volunteers. Google Translate also started adding African languages and by 2020 it supported thirteen languages,71 with more planned for the future. Another strand of Google’s strategy for developing content was to encourage emerging artists and creatives to make videos for YouTube from which they could earn money: ‘For African artists, any money is good money. We had to sign deals with local [music] collection societies. We launched in Senegal with Youssou Ndour,72 who was a minister and also had his own media company.’ 73 YouTube proved to be a key to unlocking African internet use: One of the team members said you guys are silly. Google’s money will come from YouTube. We had the numbers. Even when the internet was bad, buffering completely, we were getting as much video access as Google queries. 97

Technology diffusion We had already started Google caches. The telcos had said give us a cache, not help us with infrastructure. They wanted to use our brand to get people online.

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[…] [Internally] I said we want to do YouTube in Africa. The conversation started in late 2012. My management said you’re not allowed to do this. So I went ‘underwater’ to do it. We signed Youssou Ndour, Nation Media and Jason Njoku, of Nollywood film platform iROKO [see Chapter 5]. There were five contracts out of London. We taught them how to upload or ship the disks to London to get them uploaded.74

The YouTube commercial team noticed what was happening: iROKO took US$1.8 million in their first year. It was big enough for the guy managing Middle East and North Africa (MENA) to notice. It suddenly represented 10% of his numbers. One year later the Head of YouTube wrote to the Emerging Markets guy and they kicked us out and took over. It’s the time of the Arab Spring and in North Africa and the Middle East people are using YouTube for this. Social networks are exploding all over the place. Eric Schmidt said ‘why is YouTube not launched in these markets?’ … So we launched five [countries] in MENA and five in sub-Saharan Africa.75

Google also helped media publishers who were transitioning from print to digital: My team was specialising in monetising the web for publishers, with banners powered by Google. The reality was that Google Auction (for online advertising) never picked up to a sufficient level to make money. The auction was only strong if there were a lot of diaspora viewers and reads. [With YouTube] at one million views, the account holder got around US$10 per thousand views.76

The difficulties with YouTube were not easy: ‘Advertisers lag behind consumers. You needed to convince advertisers to shift their budget from print to digital … Volumes had to be so significant for it to work, anything over a million views.’ 77 98

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Finally, the company’s regulatory and policy work focused on market blockages affecting infrastructure, getting governments to remove import taxes on mobile phones and persuading regulators to open up access to spectrum.

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Facebook joins the party When Google first arrived in sub-Saharan Africa, it had to promote the use of its products and services, but by the time Facebook, arrived seven years later, its social media product was already widely popular. By August 201078 the top three sub-Saharan Africa countries by Facebook users were South Africa (1.3 million), Nigeria (1.7 million) and Kenya (864,750). By 2011, Facebook as a website was ranked number one or two in the fourteen countries covered by internet rankings company Alexa,79 and user numbers kept creeping up.80 By 2012, as a sign of things to come, over 60% or more of internet users surveyed in eight out of eleven countries in sub-Saharan Africa had Facebook accounts.81 Facebook had three commercial objectives for the platform that it applied in sub-Saharan Africa. Firstly, it wanted to acquire more users. Secondly, it needed to monetise this use by attracting advertising: for example, it already had agents in African countries selling its online advertising space to advertising agencies and clients by 2011. Thirdly, it needed to encourage African developers to write more services for the platform.82 As social media, Facebook pressed a lot of buttons for potential African users: One of the things about Facebook in Africa is that it provides an extremely fast route to getting a web page: you can have an online presence without needing to go through all the cost and hassle of having a web designer do it. For the individual, it becomes a combination of bulletin board and e-mail browser. It is probably one of the significant links between Africans on the continent and friends and family in the diaspora.83

Behind its commercial strategy, it had a long-term development plan that borrowed elements of the Google playbook described earlier. As a 99

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way of closing the digital divide it launched Internet.org, its own not quite a charitable organisation and not quite ‘for profit’, in partnership with several other companies. The first tool Facebook used to close this gap was an SMS version called Facebook Zero that was offered with free data. In May 2010, fifty mobile operators launched it in forty-five countries, including Côte d’Ivoire, DRC, Rwanda and Uganda. A later iteration was what became known as Free Basics: this provided mobile users with access to a small number of data-lite websites of basic services, free of data charge – a model widely described as a walled-garden internet experience. Framed by Facebook as a philanthropic effort, Free Basics was fiercely contested in India, and eventually banned in 2016 following pressure from a civil society campaign.84

Their fear was that Facebook would commandeer the internet in emerging markets: indeed, for many first-time African users, Facebook was the internet. ‘[W]e try to identify content that may be useful for first-time internet users as an “on-ramp” for their first internet user experience … I’m talking about health, about education, finance, job listing, local content.’ 85 Free Basics’ first sub-Saharan African success was a partnership with Airtel, which saw the app rolled out in July 2014 in Zambia with thirteen free content services, with Tanzania, Kenya and Ghana added over the next six months. To extend the usefulness of Facebook and associate itself with wider development aims, it launched the Praekelt Foundation Incubator for Free Basics in 2015: this provided support to a hundred NGOs, and civil society organisations received support to establish Free Basics-compatible versions of their websites and services. Facebook’s Internet.org initiative echoed Google’s emphasis on increasing access to the internet and infrastructure: Project Aquila (solar-powered drones delivering rural access, subsequently closed down), the Telecom Infra Project (low-cost mobile base station hardware and software), what became Wi-Fi Express (a low-cost, hot-spot project) and putting money into low-cost ISP and hot-spot providers (for example, Project Isizwe in South Africa, Surf in Kenya, Tizeti in 100

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Nigeria and fibre network roll-outs such as Airtel in Uganda and Main One in Nigeria) and an investment in the planned international fibre cable A2Africa. Like Google, Facebook also funded a number of local caches in Internet Exchange Points to improve the users’ experience, invested in the start-up ecosystem (for example, Tech Crunch Battlefield for Africa and NG_HUB in 2018) and training (including developer circles, online safety) and supported digital rights campaigns, particularly around elections. However, the Cambridge Analytica controversy also impacted on Facebook, as the company had done work in Kenya.86 Both Facebook and Google have learnt from their business development activities in sub-Saharan Africa: ‘They are meeting users where they are. They are now building lite apps and that wouldn’t have occurred to them ten years ago.’ 87 Google clearly laid the groundwork for some of what followed: [It was] interested in developing the internet and not thinking about the money for 10 years. Lots of things had an impact later on, like people playing YouTube on their phones after all the struggles over the cost of data and handsets. It played a crucial role both with direct investment and influence.88

New software platforms upend the business model As elsewhere globally, for Africans, having internet on a mobile changed the focus of what it meant to have a phone. No one had to accept the things that a phone came loaded with, but could choose what they used. Different platforms could appear as an OS on a smartphone or featurephone (Android being the main one in sub-Saharan Africa): an internet platform like Facebook, WhatsApp or Opera, the internet itself, the platforms that mobile operators had provided or SMS. Those who could afford to use the new apps were spending less time using the operator’s services. The danger for sub-Saharan Africa’s mobile operators was that such internetpowered platforms as Facebook and WhatsApp would separate them from their customers. They feared becoming a ‘dumb pipe’ 89 and that 101

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these new platforms, over time, would pose a threat to their existing voice and SMS revenues as people came to rely upon them. These new companies like Facebook and Google were referred to as ‘Over-The-Top’ (OTT) operators by mobile companies because they could be used without having to go directly through the mobile operator’s platform. They got their revenues from selling their users to advertisers. This meant that mobile operators had lost their ability to ‘own the customers’. Strategically, the mobile operators had two ways of creating a different future: either they could serve as a platform for everyone else’s services or they could become content and services companies themselves. The operators were no longer the ‘gatekeepers’ at the centre of the industry: everyone – old and new players – was jostling for some higher ground that in the industry jargon provided ‘added value’. Some companies – like Millicom and Safaricom – took to describing themselves as something more than mere telecoms companies. Millicom started using a tagline for its marketing: the digital lifestyle. Sadly for Millicom, it was perhaps a case of the right story at the wrong time. In 2016 it started to sell off its African subsidiaries, and had exited by 2019. MTN fought back against the social media platforms with its own ‘super-app’, Ayoba, but with five and a half million registered users and two million active users in June 2020 it has a long way to go.90 The next part of the book looks at the services, like mobile money (Chapter 4), that were built on top of the infrastructure described in Part 1, how Africans made use of these services (Chapter 5), the role played by development actors (Chapter 6) and the corrupt underbelly of the telecommunications industry (Chapter 7).

Notes 1 2 3 4 5

Author interview, Sean Pashley, 8 September 2020. Author interview, Jussi Hinkkanen, 16 July 2020. Author interview, Jesse Oguntimehin, 1 July 2020. Author interview, Jesse Oguntimehin, 1 July 2020. P. Curwen and J. Whalley, ‘A tale of two continents: the internationalisation of Millicom in Africa and Latin America’, Digital Policy, Regulation and 102

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Cheaper mobile internet and smartphones Governance 22.3 (2020), 177–99. It is owned by Swedish holding company Kinnevik. 6 Author interview, Alex Kamara, 10 July 2020. 7 Ibid. 8 Author interview, Mike Jensen, 17 February 2020. 9 A. Twinomugisha, ‘Why African internet bandwidth prices are still high’, ICT Works (5 May 2010), www.ictworks.org/why-african-internet-bandwidthprices-are-still-high/#.X9ilLl7gryV (accessed 7 December 2021). 10 It would reach 32 countries in 2012. See Sub-Saharan Mobile Observatory 2012 (GSMA, 2012). 11 African Mobile Observatory 2011 (GSMA, 2011). 12 Ibid. 13 Communications Authority of Kenya website, https://ca.go.ke/consumers/ industry-research-statistics/statistics/ (accessed 7 December 2021). 14 E. Calandro, R. Gamage and C. Stork, The Future of Broadband in Africa (Research ICT Africa, 2012), p. 4, table 1. 15 State of Mobile Connectivity 2019 (GSMA, 2019), p. 50. 16 Cameroon, Ethiopia, Ghana, Mozambique, Nigeria, Rwanda, South Africa, Tanzania and Uganda. 17 Research ICT Africa Mobile Pricing (RAMP), https://researchictafrica.net/ ramp_indices_portal/ (accessed 7 December 2021). 18 Mobile Internet Connectivity 2020 – Sub-Saharan Factsheet (GSMA, 2020), p. 2. 19 Only South Africa’s regulator, ICASA, seems to have addressed the data rollover issue. ‘Icasa’s new mobile data rules come into effect on Friday, but some operators still want to screw us’, Stuff (26 March 2019), https:// stuff.co.za/2019/02/25/icasas-new-mobile-data-rules-come-into-effect-onfriday-but-some-operators-still-want-to-screw-us/ (accessed 7 December 2021). 20 MTN’s financial results, Q2, 2018. 21 Author interview, Jussi Hinkkanen, 16 July 2029. 22 Ibid. 23 Ibid. 24 Author interview, Rick Fant, 29 July 2020. 25 Egypt, Nigeria and South Africa. M. Mark, ‘Nigeria’s BlackBerry addiction offers hope for Research in Motion’, The Guardian (15 November 2012), www.theguardian.com/technology/2012/nov/14/blackberry-nigeria-statussymbol (accessed 7 December 2021). 26 Ibid. 27 N. Linge, ‘Who wants a BlackBerry these days? Millions in Africa and Asia’, The Conversation (29 January 2015), https://theconversation.com/who-wants-ablackberry-these-days-millions-in-africa-and-asia-36685 (accessed 7 December 2021). 103

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Technology diffusion 28 Author interview, former Google employee. 29 ‘Android app review: IDEOS u8510 series (Prologue)’, techweez (27 September 2011), https://techweez.com/2011/09/27/android-app-review-ideos-u8150-seriesprologue/ (accessed 7 December 2021). 30 The Mozilla Foundation is a free software community founded in 1998 by members of Netscape. The community uses, develops, spreads and supports Mozilla products, thereby promoting exclusively free software and open standards. The community is supported institutionally by the not-for-profit Mozilla Foundation and its for-profit subsidiary, the Mozilla Corporation, which auctions the use of Firefox as a default search engine, mostly to Google but also Yandex in Russia. 31 Author interview, Rick Fant, 29 July 2020. 32 Platforms that showed you content from a single provider rather than all of the worldwide web. 33 Author interview, Rick Fant, 29 July 2020. 34 It also worked on a low-cost tablet. 35 ‘Mozilla brings low, low-cost smartphones to Africa – looking forward to 50–80% smartphone ownership’, Balancing Act’s News Update 753 (17 April 2015), www.balancingact-africa.com/news/telecoms-en/33674/mozilla-brings-low-lowcost-smartphones-to-africa-looking-forward-to-50–80-smartphone-ownership (accessed 7 December 2021). 36 E. Chenze, ‘Orange Klif review: the phone for everyone else’, techweez (31 July 2015), https://techweez.com/2015/07/31/orange-klif-review-the-phonefor-everyone-else/ (accessed 7 December 2021). 37 Author interview, Jesse Oguntimehin, 1 July 2020. 38 Author interview, Rick Fant, 29 July 2020. 39 Ibid. 40 A. Deck, ‘Africa’s phone phenom: your guide to Transsion’, Rest of the World (23 June 2020), https://restofworld.org/2020/transsion-from-chinato-africa/?utm_source=Rest+of+World+Newsletter&utm_campaign= 6b42b3ae24-EMAIL_CAMPAIGN_2020_07_27_07_29&utm_medium= email&utm_term=0_b91e039431-6b42b3ae24-381413383 (accessed 7 December 2021). 41 J. Poushter, ‘Climb in emerging economies: but advanced economies still have higher rates of technology use’, Pew Research (22 February 2016). Other results: Kenya (26%); Ghana (21%); Senegal (19%); Burkina Faso (14%); and Tanzania (11%), www.pewglobal.org/2016/02/22/smartphone-ownershipand-internet-usage-continues-to-climb-in-emerging-economies/ (accessed 7 December 2021). 42 Owned by Nokia. Firefox OS shipped on both Alcatel and Nokia featurephones. 43 Author interview, Sebastian Codeville, CEO, KaiOS, 15 June 2020. 44 Ibid.

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Cheaper mobile internet and smartphones 45 www.kaiostech.com/press/kaios-releases-findings-of-research-on-internetuse-and-perception-in-nigeria/ (accessed 7 December 2021). 46 Author interview, Sebastian Codeville, 15 June 2020. 47 Ibid. 48 S. Kara, ‘Open letter to anyone who uses a smartphone, drives an electric car, or flies on a plane’, Thomson Reuters Foundation News (18 September 2018), https://news.trust.org/item/20180918134734-kqc8m/ (accessed 29 November 2021). 49 Ibid. 50 See www.responsiblemineralsinitiative.org/ (accessed 7 December 2021). 51 Author interview, former Google employee. 52 Ibid. 53 Ibid. 54 In 2021 Kenya’s cabinet secretary in the Ministry of Information and Communications. 55 Author interview, Andrew MacLaughlin, 3 August 2020. 56 Author interview, former Google employee. 57 www.afterschoolafrica.com/326/google-africa-university-access-program/ (accessed 7 December 2021). 58 Author interview, Thomas Shoemaecker, 19 August 2020. 59 Brad Ree, quoted in, www.dw.com/en/googles-plans-to-expand-internetaccess-in-africa-is-about-the-data/a-16903897 (accessed 7 December 2021). 60 Author interview, Thomas Shoemaecker, 19 August 2020. 61 2020 e-mail client share: Apple iPhone: 38%; Gmail: 27% (plus Google Android: 1%); Yahoo! Mail: 5%; www.promothon.net/tips-and-resources/ email-clients/ (accessed 7 December 2021). 2008 search engine market share: https://searchengineland.com/search-market-share-2008-google-grew-yahoomicrosoft-dropped-stabilized-16310 (accessed 7 December 2021). In 2020 Google had 92.71% of the search engine market: https://gs.statcounter.com/ search-engine-market-share (accessed 7 December 2021). 62 ‘YouTube opens the road to new online business models in Africa with video streaming’, Balancing Act’s News Update 613 (13 July 2012), www.balancingactafrica.com/news/broadcast-en/25418/you-tube-opens-the-road-to-new-onlinebusiness-models-in-africa-with-video-streaming (accessed 7 December 2021). 63 Author interview, Thomas Schoemaecker, 19 August 2020. 64 An initiative largely pushed by Microsoft. 65 Partly owned by Andile Ngcaba’s Convergence Partners. 66 Closed down in 2021. 67 Author interview, former Google employee, 29 July 2020. 68 Author interview, Thomas Shoemaecker, 19 August 2020. 69 Ibid. 70 Author interview, Isis Nyong’o, 4 September 2020.

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Technology diffusion 71 Afrikaans, Amharic, Chichewa, Hausa, Igbo, Malagasy, Sesotho, Shona, Somali, Swahili, Xhosa, Yoruba and Zulu. 72 Ndour was appointed Minister of Culture and Tourism on 5 April 2012. 73 Author interview, Thomas Shoemaecker, 19 August 2020. 74 Author interview, former Google employee. 75 Ibid. 76 Author interview, Isis Nyong’o, 4 September 2020. 77 Ibid. 78 Source: Internetworldstats.com, gathered by Balancing Act. 79 ‘Africa’s Facebook explosion – user numbers double in many countries in just seven months’, Balancing Act’s New Update 551 (21 April 2011), www. balancingact-africa.com/news/telecoms-en/21754/africas-facebookexplosion-user-numbers-double-in-many-countries-in-just-seven-months (accessed 7 December 2021). 80 Twitter’s first visit to the continent and the start of its involvement was in 2010. Video interview, Jessica Verrili, Corporate Development and Strategic Initiatives, 23 November 2010, www.youtube.com/watch?v=jJXEDHREQFg (accessed 7 December 2021). 81 Research ICT Africa surveys for 2012 quoted in E. Calandro, R. Gamage and C. Stork, The Future of Broadband in Africa (Research ICT Africa, 2012), figure 3. 82 ‘Africa’s Facebook explosion’. 83 Ibid. 84 T. Nothias, ‘Access granted: Facebook’s free basics in Africa’, Media, Culture and Society 42.3 (2020), https://journals.sagepub.com/doi/full/10.1177/ 0163443719890530 (accessed 7 December 2021). 85 Video interview, Nicola d’Elia, Head of Growth and Partnerships, EMEA, Facebook, 26 September 2014, www.youtube.com/watch?v=lObgp7jMVKc (accessed 7 December 2021). 86 D.N. Nyabola, Digital Democracy, Analogue Politics (Zed Books, 2018), p. 86. Cambridge Analytica was using Facebook user data to profile potential voters without their knowledge. 87 Author interview, Jonathan Donner, 22 July 2020. 88 Author interview, Isis Nyong’o, 4 September 2020. 89 The term was coined by David Isenberg (www.rageboy.com/stupidnet.html [accessed 7 December 2021]) to describe the internet at large. Dumb pipes are a key operating principle of net neutrality. 90 www.ayoba.me/newsroom/ (accessed 7 December 2021).

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Part II

Technology influences: uses, behaviours and abuses

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4

Mobile money: from transferring cash by SMS to a digital payments ecosystem (2000–20)

This chapter describes how sub-Saharan Africans used airtime transfer to send cash to each other; the way in which this was noticed and used to create early, unsuccessful mobile money services; how the British aid agency DfID helped to finance M-Pesa; the unsuccessful, early roll-outs of mobile money in West Africa; how mobile money start-up Paga was launched in Nigeria; and the developing payment ecosystem. It concludes by looking at the future of mobile money and how industry ‘collision’ will play a part. Africa’s mobile users invent a service using a virtual currency Well over 90% of mobile phone use in sub-Saharan Africa is pre-paid. In the early 2000s ‘scratch cards’ could be bought: the card was scratched to get a PIN code to access the airtime. Africa’s mobile consumers figured out how to use this as a virtual currency. By 2006, users were using mobile airtime credit transfers to send money via village agents, who charged commissions of 10–30%.1 With hindsight, these informal practices make Africa’s first successful mobile money service look easy. But what happened informally was not easily translated into an operational business. Celpay was a precursor to later mobile money services that Celtel launched in 2000. Two ‘aha!’ moments led to the company being launched. Its managers in Malawi noticed that customers were buying, unusually for Africa, a lot of high-value ‘scratch 109

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cards’: the cards were dollar denominated. They were buying them as a hedge against the falling value of the local currency, the Kwacha. The managers realised that: ‘pre-paid scratch cards have become a form of currency … if everyone suddenly believes that something has a value that can be exchanged, a new currency is created’.2 At about the same time, two Celtel managers were caught in the traffic going out to Kinshasa airport to fly out of DRC: ‘There were two guys sitting on the side of the road with a massive stack of currency … talking into old-fashioned half-brick mobile phones. Puzzled by the sight, they enquired as to what was going on. It turned out that this was the banking system in a country where the banks had all but ceased to function.’ 3 The roadside money-transfer guys arranged with trusted contacts to make the payment in, say, Mbuji-Mayi in exchange for making a similar-value transaction in Kinshasa for their trusted contact. An equivalent bank transfer – if possible – would take a month. Celtel decided to trial its mobile money-transfer service in neighbouring Zambia before launching it in DRC. The technology needed was simple but the business was harder than it looked: we hadn’t thought through the complexity of it. In order to move from cash to an electronic system, there has to be an element of trust. There has to be a change in people’s mindsets. People were reluctant to be charged 1–2% of their payment when it cost nothing to pay with cash.4

So Celtel created a corporate payments service: South African Breweries, BP and a local cement company were willing to pay 1% for this kind of service. It also ended up making US$50 million worth of payments to demobbed soldiers from DRC’s civil war. In the end Celtel – clearing out non-core businesses before its initial public offering in 2005 – sold the company to South African bank First Rand, who closed it in 2013. Two other attempts at entering the field at around the same time were not wholly successful. Both were in South Africa, where banking services were much more widely available. Wizzit launched in 2004 to provide basic banking services for the unbanked. In 2005 MTN and Standard Bank created a joint venture to offer a free mobile money service. In 2006 110

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it had only about twenty thousand customers and a lot of problems with SIMs that it wouldn’t work with and identity checks.5 Neither service achieved scale or captured the users’ imagination.

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The M-Pesa story: how the British aid agency funded a major innovative breakthrough In the early 2000s if an urban Kenyan wanted to send money to his or her parents in a rural area it would be sent by bus, artfully hidden in a parcel, and would take at least two days to get there. The vast majority of Kenyans were unbanked, and even if they did have an account, bank branches were largely an urban phenomenon.6 Traditional banks in almost all sub-Saharan African countries in the early 2000s catered for a small, urban elite and initially had little or no interest in widening their services beyond those living in urban areas. But, in order to compete with ‘bricks and mortar’ banks, the cost structure of mobile money services had to be dramatically lower to reach low-income users. In 2001, three academic researchers noticed that mobile phones were creating innovative financial behaviour: ‘This spontaneous use of airtime as a currency … suggested to us a huge pent-up demand for financial services, particularly the transfer of money within the country.’ 7 One of these researchers, Simon Batchelor, director of research and consultancy at development consultants Gamos, noticed the scale of diaspora remittances – money sent by Africans abroad – and the high amount of commission the senders were being charged. He felt that he had to do something about it. Two donor agencies – IDRC from Canada and DfID from the UK – agreed to fund pilot research on money transfer. A chance meeting at an arts festival in 2004 was to speed things up. Batchelor, who had gone to hear Stephen Timms, MP speak (who was number two to Gordon Brown at the Treasury in the UK’s Labour government), found himself alongside him in the food queue: ‘I approached him and made my elevator pitch. Aid is US$60 billion, remittances are US$120 billion and [those sending remittances] are being charged 12% to send them. He said make an appointment to come and see me.’ 8 111

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Vodafone’s executive for global corporate responsibility, Nick Hughes, was approached after a debate at an international event, the World Summit on the Information Society (WSIS; see Chapter 6), by someone from DfID who ran a challenge fund. This set him thinking: ‘What if a firm could use somebody else’s capital to overcome the internal competition [for capital] and a compelling proposition could be shaped that would give the company some comfort that the project was addressing a market of potential future value?’ 9 At the time, DfID was matching on a 50% basis joint investments with the private sector to improve access to financial services. Vodafone secured £1 million in matching funding after a competitive bid, with its own contribution being made in the form of staff costs, budgeted at an agreed rate. It looked at doing both Kenya and Tanzania but, after an appraisal of both countries, piloted the project in Kenya only in 2005.10 Batchelor’s connection with the UK Treasury proved necessary to smooth the regulatory path: the governor of Kenya’s Central Bank was far from convinced about the project: ‘We flew [the governor] to the UK [to meet] Gordon Brown, who said we don’t need it in the UK but you should do it.’ 11 The central bank governor gave a ‘letter of no objection’.12 Michael Joseph, the CEO of Vodafone-owned Safaricom was initially sceptical about the M-Pesa pilot: ‘It was not great software. None of the Vodafone companies would trial it. We did a trial in secret in the north of Nairobi with a microfinance institution [Falulu] (and a bank [Commercial Bank of Kenya]).’ The pilot was intended to make the process of microfinance loans easier. The users who participated in the pilot project figured out what they wanted: ‘Users worked out you could send money to someone else … So it was launched in March 2007 as a service to send money from one person to another.’ 13 The product came from watching this behaviour in real time. It allowed people to buy airtime without having to buy scratch cards and was localised with a Swahili language option.14 Joseph drove the growth of M-Pesa very hard: I discussed with the team how to get one million subscribers. The business plan said a quarter of a million. To achieve this, we had to replace sixteen thousand SIM cards and give dealers commission. They were not keen on 112

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the product. We advertised for shops to take it on. We spent US$10 million in the first year.15

As the density of agents increased, the number of users kept climbing: the customers were more likely to become frequent users if there was a mobile money agent nearby: ‘It was only … roughly fifteen months after launch that Safaricom started recruiting new agents more quickly than new customers [on a percentage basis].’ 16 When it was successful, the banks started to panic. They actually tried to find a way to stop us. [Kenyan MPs] asked the minister of finance to close us down. They told him it was a Ponzi scheme. So I went to see him and he said: ‘What’s this all about?’ He had a farm so I told him how he could pay his workers using it. Then I made a payment to his farm manager to show him how it worked. He thought it was the most wonderful thing ever and told the president.17

The private secretary in the ministry of information and communication, Bitange Ndemo, argued to President Kibaki that this new mobile money market would get money out from under people’s mattresses and into the banks where you could see it: ‘He said: ‘who’s opposing it?’ That’s how it happened.’ 18 On 25 January 2009, the Kenyan Treasury published the results of the audit of the M-Pesa money transfer service undertaken by the Central Bank of Kenya at the end of 2008, concluding that it was ‘safe and reliable to use’.19 But other operators were reluctant to roll out: Mobile operators focus on voice and data. Launching M-Pesa was expensive. They didn’t want to spend the money. It was first launched more as corporate social responsibility than a money business. They said this is too expensive and too much effort. It took about five years to get traction … I tried to take it across the Vodafone footprint but most were reluctant to launch.20

Growth came in unexpected ways: ‘There was a post-election violence lift [in late 2007/early 2008] … It really spiked the usage right up.’ 21 People avoided going out to make payments and M-Pesa also became a popular 113

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way to send money to displaced persons in refugee camps. As it achieved a ‘critical mass’, the number of potential uses increased: The first app was never built for thirty million customers. We said to ourselves let’s build for five million with a certain set of functionalities. We were making very basic first steps. It was just person-to-person transfers and airtime purchases. If customers bought airtime on their wallet [rather than scratch cards], there were savings on the bottom line. Since then, they have been layering on new functionality over time.22

Over thirteen years, M-Pesa went from a million users in November 200723 to 30.19 million in early 2020.24 In April 2008 Vodacom launched M-Pesa in Tanzania, reaching a million users just before Christmas in 2009. MTN Mobile Money – lacking Vodacom’s experience – had a slower start in Uganda. Having launched in March 2009 it attracted only 413,000 users after ten months.25 ‘In Kenya, M-Pesa’s bigger than all the banks put together.’ 26 Not only is it bigger than Kenya’s banking sector27 but it has a 99% market share in the country’s mobile money market. M-Pesa now holds a de facto monopoly position, something that reinforces Safaricom’s de facto telecoms monopoly. Wider roll-out of mobile money stumbles Between 2008 and 2011 all of the major mobile operators (and some of their smaller rivals) rolled out mobile money services across sub-Saharan Africa. The success of M-Pesa in Kenya ought to have led to a speedy roll-out across the continent. But its take-off in Kenya hid wider obstacles that became apparent only as others sought to replicate its success. Outside of East Africa, Africans were slow to warm to mobile money services. At first it was not clear why. On the supply side, mobile money services grew fastest between 2009 and 2015, expanding from three countries to thirty-five in 2015, with MTN Mobile Money and Orange Money leading the charge. But what seemed like a golden opportunity for mobile operators did not go so smoothly. A former MTN employee recalled: ‘In February 2009, I joined MTN and 114

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saw the launch of five28 MTN Mobile Money operations [in West Africa].’ 29 Up to this point, MTN’s most successful launch had been in East Africa (Uganda) in March 2009. Everything initially seemed to go swimmingly for these launches. Large numbers of people signed up, but hardly any made use of the service: active user rates were as low as 0.65% in Ghana and 1.3% in Côte d’Ivoire: ‘It was a disaster.’ 30 Mobile money users register to make use of a mobile money service (registered accounts) and are counted as active if they clear the fairly low bar of a single transaction in a 90-day period (active accounts). Lots of the launches were conceptual. You’d tell people you’ll have a mobile wallet. People didn’t understand what a wallet was. Cash is king. When you launch, you have a choice: you can have a full mesh wallet strategy with tons of services or focus on P2P [person to person]. We targeted the product to do everything when we should have started with the targeted-use cases … It was also seen as a financial inclusion (service) for the poor, not really for people who have a job. But it had to work for the African middle classes first.31

Speaking to its Uganda operation, MTN discovered it had had the advantages of a good consultant and had received a US$0.5 million grant: ‘It did two things we did not do well: firstly, it invested in marketing. And secondly, it created good distribution channels. There was no proper management of distribution in WECA.[…] When the success of Uganda was raised, local staff in West Africa would say it’s cultural and it won’t work outside the East African region.’ 32 The same lack of management affected Orange Money in Madagascar at the same time: ‘The mobile money project has been managed by five different departments before being set up as an independent business unit. There are still moments when the activity is questioned.’ 33 The MTN executive visited the local mobile money agents in a launch country to get a feel for what was going wrong: ‘We had to visit seven agents before finding one who didn’t overcharge us and had cash. We were telling our [mobile voice] agents “we’re launching financial services” without knowing how much harder it was than airtime sales.’ 34 The solution 115

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to MTN’s difficulties turned out to be using the Kenyan consultant Jennifer Barassa, of Top Image, who had worked on both M-Pesa and Orange Money: ‘Then things picked up. When you pick up a critical mass, you don’t need her [JB’s] services. We had a bunch of metrics. The key performance indicators said that you have to visit agents every two weeks. You remove agents if they’re not meeting their targets.’ 35 The failures summarised here occurred over a period of three years and MTN was not alone in finding it hard to launch these new services. Mobile money fell outside of the mobile operators’ core business. Despite that, those involved believed that they were right to take it on: ‘Every industry will fail at new activities because it’s not just about the technology. How many other African companies do you know pushing such innovation?’ 36 It is easy to underestimate the jump that mobile operators were making: It was a different business within telcos. You really needed to invest in distribution networks and liquidity. The expertise was not there. 2007–17 was mainly M-Pesa … Success was not as much elsewhere initially. It was mainly MTN and Orange. Then it started scaling quite fast in Central, West and Southern Africa.37

MTN’s mobile money business (now called MoMo) is now headed by one of the veterans38 of those early failures. At the time of writing (April 2021) the business was adding US$1.15 to the average revenue per user of its subscribers. It handles international remittances and has grown its loans and insurance revenue streams.39 In 2019 it opened its Application Programming Interface (API) programme in seven countries, allowing developers to build products that can integrate directly with its MoMo service.40 Nigerian mobile money start-up founder gets turned down at first In 2011, Paga, one of the first non-mobile operator money transfer services, raised money and got through the regulatory hurdles to provide the most

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widely available service in Nigeria, a country that still enjoys an almost unbreakable love affair with cash.41 Paga founder Tayo Oviosu showed up in venture fund CEO Tokunboh Ishmael’s office and asked for US$20 million for marketing. Both had experiences in investment, tech and start-ups but somehow the presentation didn’t click.42 Oviosu remembered how badly the meeting went: ‘She literally kicked us out of her office.’ She had just raised a fund and was focused on microfinance. Oviosu, as the entrepreneur, had misjudged it: ‘In my mind as I went into the meeting I thought we’re achieving the goal but not in [the microfinance] category.’ 43 The two did not have a meeting of minds: ‘He was looking for marketing and I said maybe it could be a financial inclusion story.’ 44 A few weeks later Oviosu bumped into Ishmael at Lagos airport as she was boarding a flight to London with her son and, after exchanging pleasantries, Oviosu asked if they might talk again. At the second meeting they focused on how Paga’s plans might meet the mandate of Ishmael’s investment fund. She had to get her investment mandate changed to invest, but Paga became her first fintech investment. At that point, highly localised microfinance institutions were considered to be the best way of creating financial inclusion among the unbanked. As Ishmael remembered it, her fund investor, Wim van der Beek, who had established Goodwell Investments, was doubtful: ‘You’re not serious, are you?’ It was a complete start-up with no licence for mobile money. ‘This is not why we’ve been given money. We’ve been given money to drive financial inclusion.’ Eventually I convinced him. Recently we made our fourth investment in Paga and it took 5 minutes to approve.45

Oviosu got the idea for Paga by methodically drawing up a list of potential proposals: I’ve forgotten what number one on my list was but the Paga idea was number ten. How do you get the unbanked on a digital platform? You open in stores in your local communities. They trust the guy down the street. He sells to them on credit. You use them to create a network of local agents.

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The first thing that this 33-year old had to do, in a continent that pays more attention to the old than the young, was to get a banking licence: The Central Bank of Nigeria [CBN] had just published a regulatory framework. I went to the CBN website and found a contact in payments and called them. Within three transfers, I was talking to the gentleman in the team responsible for the regulatory framework. We had a good chat. We had a meeting and he told me to apply and the department responsible.46

Oviosu flew to Nigeria’s administrative capital Abuja with a suitcase with ten copies of the two-hundred-page application and waited eagerly for a reply. Three months later he had heard nothing back: I then started networking and we were able to meet the CBN Governor to do a presentation. He said I’ve never heard anything like this. He called the payments team and told them to come to the meeting. He said we need a process to licence. Please be helpful to them. What would have happened if we’d never had that meeting?47

Not long afterwards, a Request for Proposals was advertised and Paga was selected as one of seventeen licensees: ‘Of these, we’re the only one still standing.’ Paga got its full licence in August 2011. Just under a year later, in July 2012, it had raised investment funds from: Acumen Fund, Adlevo Capital, Capricorn Investment Group, Goodwell West Africa and Omidyar Network.48 In addition, it had ‘business angel investment’ from high-profile Silicon Valley investor Tim Draper of Draper Fisher Jurvetson. Nigeria was unusual in the way it had licensed the mobile money market: The CBN went through a long process to figure this out … If you allow the mobile operators to come into the market, you’ll be putting the banking of the 80% of the unbanked into the hands of a few companies who also control telecommunications, which is crucial to the country.49

(CBN subsequently changed its mind in 2019 and gave two licences to mobile operators, MTN and 9Mobile.) We didn’t have any relationships with mobile operators and they were not supportive of us trying to get into the space. MTN tried to refuse to connect us to SMS for two years. It said it didn’t have the pricing structure for this 118

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category. In the end it was forced to by the CBN and NCC [the Nigerian Communications Commission, telecoms regulator] and it then took half a day to connect us.50

The mobile operators who had previously challenged the status quo were on the road to becoming its incumbents. Paga’s transactions grew from millions to billions, processing US$2.3 billion in 2019, compared to US$61 million in 2012. In April 2021 it had 17,942,375 registered accounts.51 Based on this growth, it plans to expand into Ethiopia and Mexico. Paga’s founder, Oviosu, describes Ethiopia as ‘a long game’ 52 but regards Mexico as fundamentally similar to Nigeria: ‘I have a lot of Mexican friends and it’s the second-largest country in Latin America. Sixty-five per cent are unbanked and 90% don’t save in formal financial institutions.’ 53 The Paga and M-Pesa stories show two contrasting ways in which the mobile money business in sub-Saharan Africa got started. Both embraced business objectives and social purposes from the start. On the surface, M-Pesa was initially a corporate social responsibility activity started with donor funding encouragement. Only later did it become a very successful business stream for Safaricom. By contrast, Paga, which launched a couple of years later, was a privately financed start-up, but one of its initial investors had been funded to focus on financial inclusion through microfinance. Like a lot of mobile money services, it received donor support to enable it to deliver specific services. How mobile money has met the needs of the unbanked Mobile money services sought to create financial inclusion: the vast majority of people without a bank account could participate in a range of services that they needed and that otherwise were inaccessible to them. In 2009, 80% of sub-Saharan Africa’s adult population (326 million) were classified as unbanked.54 Mobile money services would enable them to send and receive money (particularly from relatives) quickly, cheaply and safely, without risking being physically robbed of all their cash. They could pay bills without queuing and save for a rainy day. 119

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The mobile operators sought – often with ‘incentive’ money (from donors and foundations) – to turn this huge potential social and economic need into a working business. The attraction for everyone involved was that more Africans had access to a mobile phone than to any form of financial services. For example, in 2008 in Sierra Leone only 13% of the population had access to financial services, compared to 26% having access to a mobile phone. In Sudan, 15% had access to financial services compared to 29% having access to a mobile phone.55 Over the six years between June 2013 and 2018, registered accounts in sub-Saharan Africa rose from 98.3 million to 469 million; the percentage of those registered accounts that were active fell from 43.1% to 38.5% over the same period. But, as markets matured, the number of active users increased. Taking the example of Ghana, the number of active mobile money users as a percentage of total voice subscribers has increased. In December 2015, only 18.4% of MTN’s voice subscribers were active mobile money users, but this rose to 40% by June 2017.56 Growth of active users in more mature markets is reflected regionally. There are still more subSaharan registered mobile money users in Eastern Africa (53%), where the initial services started, than in other regions – West Africa (35%), Central Africa (10%) and Southern Africa (2%).57 Once they had become active users, the unbanked both sent and received money and paid their bills. For example, in Madagascar, 71% of households in the country are involved in agriculture and nearly half the adult population relies on farming to make a living. Only 21% of those in rural areas have a phone. In a national survey in 2016, 21% of adults had received a remittance payment in the last twelve months and 16% had sent one over the same period. In a pattern familiar across many sub-Saharan African countries, 29% of adults sent remittances within Madagascar (probably from urban to rural areas) and only 2% outside of Madagascar. Seventeen per cent of survey respondents used mobile money services for the following payments: remittances (80%), paying bills (73%) and savings (12%). But 41% were still financially excluded (i.e., did not use any financial products, formal or informal, to manage their lives): ‘many Malagasy

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households are currently forced to rely on risky informal means to store value, including “a secret place” or at home’.58 According to industry data, there is very little gender disparity among mobile money users. For example, in three very different markets in sub-Saharan Africa – Mozambique, Senegal and Uganda – the percentage difference between male and female active users is only 3–4%.59 The biggest disincentives to using mobile money services in these three countries are low literacy and digital and financial skills: in Mozambique, these reasons are cited by 45% of men and 43% of women. The same barriers doubtless apply elsewhere.60 Even before mobile money services existed, cash was being sent in several different directions. Urban sons and daughters in most African countries sent money to their rural parents and relatives, particularly to cover emergencies. Likewise, the growing African diaspora sent money through the de facto duopoly of Moneygram and Western Union to relatives in Africa. In 2004, international remittances to developing countries were already a US$124 billion business. But money also travelled along less obvious corridors. These became more conspicuous with the arrival of mobile money services and emerged as an important part of those services. For example, Ugandans selling fish on the shores of Lake Victoria received money from those supplying Kampala and surrounding areas with fish. These exchanges created a geospatial corridor along which transactions multiplied. Some money crossed borders. These ‘remittance corridors’ were not always immediately apparent to mobile operators. But by 2015 the mobile industry trade body, the GSMA, had identified twenty-nine cross-border mobile money remittance corridors connecting nineteen countries. Of these, sixteen involved inter-regional transfers between African countries.61 A key issue was the cost charged to send these remittances, whether regionally or internationally. In 2004 the charge per transaction could often run as high as 12%. By 2017, the cost of international mobile remittances (including cash-out fees) had fallen to between 3.9–5.6%, depending on the amount sent.62

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A payment ecosystem developing Between 2013 and 2014 sub-Saharan Africa’s mobile money services that had started as P2P transfers and airtime sales had morphed into a strategic financial infrastructure upon which a growing number of financial services were being built. Increasingly, mobile operators and banks worked together and a genuine ecosystem was developing, with a bewildering array of third-party providers. The first mobile money service, M-Pesa, had started with P2P and airtime purchases and then added other services as users trusted the P2P service. Subsequently, added many more service uses: ‘The number of use cases increased. Bill payments, international remittances, bulk payments (like salaries), ATMs, loans, savings and credit, etc.’ 63 Those that launched later often had a ‘full mesh wallet’ with many or all of these services from the start. In the very early days of mobile telephony in sub-Saharan Africa interconnecting different mobile operator networks played a key role in subscriber growth. The ‘network effect’ 64 accelerated both the number of users and, potentially, the amount they used their phones. It might have been expected to happen with mobile money services so that money could be sent across different operator networks. But the successful operators (like M-Pesa) were keen to hold on to their customers. Bob Collymore, CEO of Safaricom, admitted ‘off the record’ in January 2011 that they should have done this but would only do so if compelled to by the regulator.65 Existing central banking payment switches were rarely ideal for mobile payment interoperability because they were designed for a low volume of high-value payments. Indeed, interoperability was slow to take off: by 2015 only three countries – Madagascar, Rwanda and Tanzania – had any level of national interoperability.66 Two broad levels of this emerged: workarounds involving things like customer SMS vouchers and full account-to-account (A2A) transactions: ‘A2A is inherently more convenient for end-users because it opens access to customers outside mobile money providers’ networks.’ 67 122

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One of the mobile operators’ fears was that, in creating a system of payments across mobile operators, the banks would insist on changes that would make it harder and more costly to operate existing mobile money services. By 2019, twenty-seven out of thirty-five sub-Saharan African countries had some level of interoperability (sometimes on a bilateral basis between operators), but only eight had full A2A interoperability.68 Overall, interoperable P2P transfers grew by nearly 25% in 2019. In 2018 Orange and MTN launched their Mowali (Mobile Wallet Interoperability) initiative and enabled a hundred million registered users in twenty-two sub-Saharan African countries to transfer money between accounts in real time and at low cost. When it was announced, the initiative covered just under a third of all mobile money registered accounts.69

Innovating payment ecosystems Building these cross-connected payment ecosystems was often hard. They required new financial partners for mobile companies like banks (for loans) and insurance companies. The cross-connected payments were often made across borders. Not all of these changes were easy to make in mobile operators. As Dare Okoudjou, who left to start his own business, recalled: MTN was a big organisation and it was not easy to drive innovation through it. I left MTN in 2009 and MFS Africa started trading in 2010. I had worked for 6 months in a start-up in New York in the late 1990s and I saw parallels in what was happening in financial services to what happened with media and telecoms.70

MFS Africa focused on cross-border transactions: ‘By 2014, people in Africa were very familiar with P2P transactions and we didn’t have to convince people to use them for cross-border transactions. Through the mobile operators we can terminate transactions and create ecosystems quickly. So 2015–17 saw rapid growth in cross-border transactions.’ 71 MFS 123

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Africa’s mobile payment wallets spanned most of the major operators: ‘The cross-border flows are not just about remittances but also cross-border trade. You can see different clusters of it in East Africa, Côte d’Ivoire for francophone Africa and a Southern Africa cluster.’ 72 In 2018 MFS Africa had 170 million customers in thirty countries with mobile payment wallets and this had grown to 200 million in thirty-five countries by the end of 2019. It connected with an increasing number of remittance companies outside Africa and it signed an agreement with Visa. This allowed users connected to its platform to generate an instant Visa virtual card, linked to their mobile money accounts to use for remittances and e-commerce transactions: ‘The advantage of [say, a country like] Ghana is the non-dominance of M-Pesa but MTN Money is beginning to dominate there. You have to be able to establish an aggregation layer.’ 73 In August 2020 MFS Africa bought a Ugandan domestic mobile payment company called Beyonic. From MFS Africa’s point of view, it was able to bring the money in but it could not offer domestic transactions in local currencies: ‘We’re trying to reduce friction between different systems and provide interoperability between different platforms.’ 74 At a country level, mobile money ecosystems include the following elements: loans and savings, insurance, government-to-person (G2P) payments, bulk payments (like wages) and merchant payments in retail outlets and online. Some services have been more successful than others: ‘Mobile insurance has had a number of false starts dating back almost 10 years. Seven mobile insurance services that were launched have since either closed or merged, indicating that it has taken some time to get the commercial and partnership model right.’ 75 One of the most successful loan products in sub-Saharan Africa has been M-Shwari, launched in 2012 as a partnership between NCBA Bank and Safaricom’s M-Pesa. To qualify for a loan, a customer had to have been an M-Pesa subscriber for at least six months. Their initial eligible loan is determined by an algorithm based on their past use of Safaricom services. At its seventh anniversary in 2019, M-Shwari announced that it

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had disbursed loans amounting to over Sh430.5 billion and had customer savings deposits of over Sh18.7 billion.76 There are similar mobile operator products (like EcoCash Savings in Zimbabwe and M-Koba in Tanzania), as well as start-up companies that use mobile operator infrastructure (like Migo in Nigeria). Another fast-developing category is G2P. This is a form of direct payment transfer by mobile to the payee for whom the money is intended and it cuts out a great deal of corruption. When the co-founder of the business payment company Cellulant, Bolaji Akinboro, met Nigeria’s then agriculture minister, Akinwumi Adesina, on a plane and they talked about how mobile payment might reduce corruption, ‘[the minister] bought into the idea that they could stop the money disappearing [corruptly from its farmer subsidy scheme] by processing through mobile wallets. You would send money direct to the farmers. We had seventeen million farmers on an M-Pesa-like platform to send subsidies over five years.’ 77 At the end of the scheme, Cellulant turned it into a payment platform for farmers called Agrikore (see Chapter 8). One of the more challenging ecosystem finance services has been merchant payments. No one knows this better than Marcello Schermer, head of expansion at South Africa’s, Yoco who attempted to open up its services in sub-Saharan Africa: We did small-scale pilots in Rwanda and Tanzania. After a couple of months we decided to close them down and focus on South Africa. As a payments market it is by far the largest on the continent. At the end of the day the viability of the model relies on digital payments demand from the consumer. Even in some places where there is a high issuing of digital payments, like Kenya, the use at point of sale is still fairly limited. […] There are about three million SMEs [small and medium-sized enterprises] in South Africa and roughly 10% accept card payments. Eighty to ninety per cent of consumers have cards, so there is a massive imbalance. We’re helping businesses get paid digitally and we have ninety thousand merchants now.78

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In Zambia, what are described as digital financial services accounts (a new name for mobile money accounts) increased in 2018 by 4,345,858, to 6,500,000 active subscribers at the end of December 2018. Despite this increase, a UN report noted that ‘there is still a gap in second-generation products beyond person-to-person (P2P) transfers and airtime purchases. This offers industry players an opportunity to innovate for a purposeful bouquet of financial products that meet the needs of different categories of customers.’ 79 Industry consolidation and collision As mobile money services become established, one company has tended to dominate the market: the most dramatic example is in Kenya, where M-Pesa has a 99% market share. Data sources are fragmented, but online media reports in 2019 and 2020 suggest that MTN MoMo in Ghana had fifteen and a half million registered accounts, compared to its two nearest rivals Vodafone (two million) and Airtel (one and a half million): ‘Most markets have a dominant player.’ 80 Industry consolidation may reinforce this trend. For example, in September 202081 in Tanzania, one of the long-established markets, Vodacom’s M-Pesa had 41% of the market share, Airtel Money 20% and Tigo Pesa 28%. Airtel has subsequently bought Tigo’s operation and its share may be close to 50%. The same pattern of consolidation occurs among third-party providers, with Stripe’s purchase of Nigerian business payments start-up Paystack for a reported US$200 million in October 2020. This emerging digital payment space is characterised by ‘industry collision’: everybody wants to do everything. Retailers and banks run phone services as Mobile Virtual Network Operators. Social media platforms (Facebook, Google, WeChat) want to be payment platforms. A mobile operator like Orange wants banking functions. In the sometimes uneven struggle between the social media companies and the mobile operators in sub-Saharan Africa (see Chapter 3), the latter have more customers: 469 million registered mobile money accounts in 2019 against 212 million Facebook users.82 126

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Orange opened its own bank in France and has (in partnership with local bank and insurer NSIA) opened in Côte d’Ivoire, with future roll-outs planned in its other markets: We’re developing a different model since we are neither a neo-bank looking for new customers nor a traditional bank with a network of branches. We’ve expanded our existing range of 100% digital and mobile services … In addition to our Orange Money offer, Orange Bank Africa provides these customers with access to savings and loans.’ 83

In April 2021, Orange announced that it had 500,000 customers and that further expansion was planned, ‘subject to the Central Bank’s authorization, therefore we are working towards being ready for implementation as soon as we receive the necessary approvals’.84 It will use customer mobile phone data to assess people for instant loans for as small amount as CFA5,000 ($8.85): ‘We are concerned about the battle for Average Revenue Per User (ARPU) and are looking for increased profitability per customer. We are building this through more services: financial transfers, deposits, credit, savings and so on.’ 85 It has taken a while for sub-Saharan Africa’s banks to really play a strong part in the mobile payment ecosystem. Increased competition – exemplified by the opening of mobile money to mobile operators in Nigeria in 2019 – has played a part. But, at the same time, smartphone adoption had reached 46% in sub-Saharan Africa in 2019. The fact that a significant number of smartphone owners were already likely to be banking customers encouraged Africa’s banks to implement digital strategies. For example, in 2018, South Africa’s Standard Bank had launched digital-only bank operations in nine countries, with a focus on mobile apps. In the one to two years since these launches in 2018/19, the number of Standard Bank digital-only app downloads has at least doubled across six countries, except in Côte d’Ivoire.86 How and why mobile money is changing Mobile money in sub-Saharan Africa has gone through several different versions. The earliest version was simply a payments transfer service: cash 127

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in and cash out. On top of this was built a more complicated payment ecosystem, and the adoption of smartphones (see Chapter 3) provided a richer customer experience. According to one money transfer analyst, the future is ‘making finance intuitive and invisible, embedded in other choices you make’. Imagine if every taxi was a place you could load your wallet. That same driver would be the person who delivered your lunch. Imagine if you are a gig worker and you buy a new motorcycle or car. You can set aside money for its insurance and make rainy-day savings. Does it all belong to Safaricom [or its equivalent mobile operator elsewhere]?87

Sub-Saharan Africa’s mobile operators currently face a number of key strategic choices: ‘Do you grow the ecosystem yourself or grow the ecosystem around you? You need to be agile and open to partners.’ 88 With the smartphone, payments becomes ‘a platform’ integrated into activities (like Uber) or, in the dreams of the super-platform creators like Ojek and Alipay, the app that can fulfil several of the users’ needs. The first of these ‘super platforms’, Opay, is claiming success in Nigeria.89 But the future for sub-Saharan Africa may be simpler: ‘Customers want to be at the centre, having offerings available to them. [The future] could be a bank or a Paga-like entity. You need to open up financial services and banking to the customer where people live their lives.’ 90 Without the need to dispense cash, a bank – viewed through one particular lens – is really just a set of very secure software designed to move money about. But people’s behaviour is at the heart of the changes described – not technology – and shifting habits away from cash could be a long process. Notes 1 J. Chipchase and I. Tulisan, Shared Phone Practices – Exploratory Field Research from Uganda and Beyond (Nokia, 2007), http://janchipchase.com/fp/ wp-content/uploads/presentations/JanChipchase_SharedPhoneUse_vFinal.pdf (accessed 7 December 2021). 2 Southwood, Less Walk, More Talk, p. 120. 3 Ibid., p. 121. 4 Ibid. 128

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Mobile money 5 ‘MTN mobile banking disappoints’, Balancing Act’s News Update 301 (7 April 2006), www.balancingact-africa.com/news/telecoms-en/6035/mtn-mobilebanking-disappoints (accessed 7 December 2021). 6 90% of Kenyans were estimated to be unbanked. See ‘M-Money services a huge success in Kenya but waiting for their breakout moment elsewhere’, Balancing Act’s News Update 450 (17 April 2009), www.balancingact-africa.com/news/ telecoms-en/1928/m-money-services-a-huge-success-in-kenya-but-waitingfor-their-breakout-moment-elsewhere (accessed 7 December 2021). 7 S. Batchelor, K. McKerney and N. Scott, ‘The use of telephones amongst the poor in Africa: some gender implications’, Gender, Technology and Development 8 (2004), 185–207. 8 Author interview, Simon Batchelor, 20 July 2020. 9 N. Hughes and S. Lonie, ‘M-Pesa: mobile money for the “unbanked” turning cellphones into 24-hour tellers in Kenya’, Innovations, Winter and Spring 2007, 63–81, at 66. 10 Author interview, Nick Hughes, 29 June 2020. 11 Author interview, Simon Batchelor, 20 July 2020. 12 Author interview, Michael Joseph, 15 June 2020. 13 Author interview, Michael Joseph, 15 June 2020. 14 Hughes and Lonie, ‘M-Pesa’, p. 72. 15 Author interview, Michael Joseph, 15 June 2020. 16 Ibid. 17 Ibid. 18 Author interview, Bitange Ndemo, 19 June 2020. 19 GSMA Mobile Money for the Unbanked: Annual Report 2009 (GSMA, 2009), p. 34. 20 Author interview, Michael Joseph, 15 June 2020. 21 Author interview, Nick Hughes, 29 June 2020. 22 Author interview, Michael Joseph, 15 June 2020. 23 www.vodafone.com/news-and-media/vodafone-group-releases/news/m-pesa-10 (accessed 7 December 2021). 24 CCK Sector Statistics Report Q4 2019–2020. 25 ‘M-Money reaches critical mass of users in East Africa – where next?’ Balancing Act’s News Update 486 (8 January 2010), www.balancingact-africa.com/news/ telecoms-en/15101/m-money-reaches-critical-mass-of-users-in-east-africawhere-next (accessed 7 December 2021). 26 Author interview, Michael Joseph, 15 June 2020. 27 ‘Around 25% of the country’s Gross National Product flows through it.’ ‘Why does Kenya lead the world in mobile money?’ The Economist (2 March 2015). 28 These country launches included Benin, Cameroon, Côte d’Ivoire and Ghana. 29 Author interview, Alexandre Liege, former business supervisor, WECA, Mobile Financial Services, MTN, 29 October 2020. 30 Ibid. 129

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Technology influences 31 Ibid. 32 Ibid. 33 Orange Madagascar Money (GSMA, 2013), p. 2, www.gsma.com/ mobilefordevelopment/wp-content/uploads/2016/02/Case_Study_-Orange_ Mobile_Money.pdf (accessed 7 December 2021). 34 Author interview, Alexandre Liege, 29 October 2020. 35 Ibid. 36 Ibid. 37 Author interview, Nika Naghavi, 9 July 2020. 38 Serigne Dioum, Head of MFS, MTN. 39 2019 Annual Results, MTN, p. 8, www.mtn.com/wp-content/uploads/2020/03/ MTN-Group-2019-annual-results.pdf (accessed 7 December 2021). 40 Safaricom also opened its APIs in 2017. 41 In 2020, 95% of transactions were still in cash. 42 Tayo Oviosu: Travant Capital, Cisco, Lucent, Deloitte Consulting. Tokunboh Ishmael: Aureos Capital, Saloman, Smith, Barney and Obongo. 43 Author interview, Tayo Oviosu, 12 July 2020. 44 Author interview, Tokunboh Ishmael, 14 July 2020. 45 ‘Alitheia Capital’s Tokunboh Ishmael starts a fund for Africa’s women entrepreneurs – how it will reach the parts others don’t,’ Innovation in Africa 144 (July 2018), https://bit.ly/3v8rVRS (accessed 7 December 2021). 46 Author interview, Tayo Oviosu, 12 July 2020. 47 Ibid. 48 It also got a US$2 million grant from EFiNA, a fund created by the Bill and Melinda Gates Foundation and DfID. 49 Video interview, Tayo Oviosu, CEO, Paga, on the mobile money market in Nigeria, 8 July 2012, www.youtube.com/watch?v=LzaHXXwdfHU (accessed 7 December 2021). 50 Author interview, Tayo Oviosu, 12 July 2020. 51 Paga website, accessed 9 September 2021. 52 Author interview, Tayo Oviosu, 12 July 2020. 53 Ibid. 54 A. Chaia. A. Dalal, T. Goland, M.J. Gonzalez, J. Morduch and R. Schiff, Half the World is Unbanked (Financial Access Initiative, 2009), figure 2. 55 GSMA, Mobile Money for the Unbanked: Annual Report 2009. 56 Calculations done using GSMA, State of the Industry Report on Mobile Money 2019 (GSMA, 2017), figure 6, and voice subscriber data from National Communications Agency, Ghana, www.nca.org.gh/industry-data-2/marketshare-statistics-2/telecom-voice/ (accessed 7 December 2021). 57 GSMA, State of the Industry Report on Mobile Money 2019. 58 Madagascar 2016 (Finscope, 2016). 59 GSMA, State of the Industry Report on Mobile Money 2019, p. 46. 60 Ibid., p. 47. 130

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Mobile money 61 GSMA, 2015 State of the Industry Report – Mobile Money (GSMA, 2015). 62 GSMA, ‘Mobile money – Competing with informal channels to accelerate the digitisation of remittances’ (GSMA, 2018), figure 3. 63 Author interview, Michael Joseph, 15 June 2020. 64 The phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. 65 Author interview, Bob Collymore, 24 January 2011. It took until 2018 for the Central Bank of Kenya to provide guidelines that suggested companies themselves should reach their own arrangements. 66 GSMA, 2015 State of the Industry Report, figure 3. 67 GSMA, Tracking the Journey towards Interoperability (GSMA, 2020), p. 11. 68 Ghana, Kenya, Madagascar, Malawi, Nigeria, Rwanda, Tanzania and Uganda. See GSMA, State of the Mobile Industry in Africa 2019 (GSMA). 69 ‘Orange and MTN launch pan-African mobile money interoperability to scale up mobile financial service’, MTN (22 November 2018), www.mtn.com/ orange-and-mtn-launch-pan-african-mobile-money-interoperability/ (accessed 7 December 2021). 70 ‘Dare Okoudjou, CEO, MFS Africa in mobile money start-up MFS wants to have 400 million mobile wallets by 2020 – it’s already nearly halfway there’, Balancing Act’s News Update 926 (18 May 2018), www.balancingact-africa.com/news/ telecoms-en/43299/mobile-money-start-up-mfs-wants-to-have-400-millionmobile-wallets-by-2020-its-already-nearly-halfway-there (accessed 7 December 2021). 71 Ibid. 72 Ibid. 73 Author interview, Dare Okoudjou, 21 July 2020. 74 ‘Beyonic-MFS Africa deal: Luke Kyohere on why it’s a good fit and the future of mobile money’, Balancing Act’s News Update 1034 (14 August 2020), www.balancingact-africa.com/news/telecoms-en/47519/beyonic-mfs-africadeal-luke-kyohere-on-why-its-a-good-fit-and-the-future-of-mobile-money (accessed 7 December 2021). 75 C. Pénicaud and A. Katakam, State of the Industry 2013: Mobile Financial Services for the Unbanked (GSMA, 2013), p. 49, https://gatesopenresearch.org/ documents/3-1429 (accessed 13 December 2021). 76 ‘M-Shwari loans hit Sh430bn since inception’, Capital FM (11 December 2019), www.capitalfm.co.ke/business/2019/12/m-shwari-loans-hit-sh430bn-sinceinception/ (accessed 7 December 2021). 77 Author interview, Ken Njoroge, Cellulant, 16 July 2020. 78 Author interview, Marcello Schermer, 11 August 2020. 79 www.uncdf.org/article/6355/bank-of-zambia-and-uncdf-release-the-2019-stateof-the-digital-financial-services-industry-report (accessed 7 December 2021). 80 Author interview, Nika Naghavi, formerly director of Data and Insights, GSMA, 9 July 2020, 131

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Technology influences 81 ‘Bank of Zambia and UNCDF release the 2019 State of the Digital Financial Services Industry Report’, UNCDF (1 December 2020). See website of Tanzania’s telecoms regulator, TCRA, www.tcra.go.tz/ (accessed 7 December 2021). 82 WhatsApp user numbers are not available. 83 ‘Financial inclusion: a step forward with Orange Bank Africa’, Orange (22 July 2020), www.orange.com/en/orange-financial-services-mobile-revolution/ financial-inclusion-step-forward-orange-bank-africa (accessed 7 December 2021). 84 ‘Orange’s digital bank hits 500,000 users in Cote d’Ivoire – further roll-outs planned’, Balancing Act’s News Update 1051 (30 April 2021), www.balancingactafrica.com/news/telecoms-en/47553/oranges-digital-bank-hits-500000-usersin-cote-divoire-further-roll-outs-planned (accessed 7 December 2021). 85 ‘Orange bets on mobile financial services, energy, B2B services and content for its digital future’, Balancing Act’s News Update 925 (11 May 2018), www.balancingact-africa.com/news/telecoms-en/43209/orange-bets-onmobile-financial-services-energy-b2b-services-and-content-for-its-digital-future (accessed 7 December 2021). 86 Based on Google Play app store figures, 2018/2019 in Sub-Saharan Africa’s Digital Landscape (Balancing Act, 2019) and an update on 2 December 2020. 87 Author interview, Arjuna Costa, 20 August 2020. 88 Author interview, Nika Naghavi, 9 July 2020. 89 O. Olowogboyega, ‘Encouraged by growth in Nigeria, OPay sets its sights on North Africa’, techcabal (7 January 2021), https://techcabal.com/2021/01/07/ opay-expansion-north-africa/ (accessed 7 December 2021). 90 Author interview, Tokunboh Ishmael, 14 July 2020.

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Sub-Saharan Africans start to live the digital life (2000–20)

This chapter looks at three aspects of sub-Saharan Africa’s emerging digital life: how online content emerged, its producers and business models and the increasing controls placed on it; who uses this content and how it fits into their everyday lives; and the ways in which languages and literacy limit the use of online content. Dawn comes up on Africa’s digital life Before the arrival of the international cables in 2009 and 2010, using the internet was tough, ‘like sucking the whole of global knowledge through a straw’.1 Without effective internet, there were few incentives to develop local African content. Choice was limited: there were SMS services and very early websites. The main drawback of the SMS services was, and is, that there is only so much information or entertainment that you can get into 160 characters. Most of the early African websites in 2000 were quite limited in scope and reach, alongside North America and Europe. There were also very few sites, by comparison: for example, in Zimbabwe one of the leading ISPs was hosting only eighty-eight sites.2 Most were corporate websites that could best be described as ‘brochureware’, designed for organisations that had little idea of what they were for: ‘Much like Senegal today, most companies were not able to explain why they had a website. “My competitor has one, let me have one. Let me be present online and it may bring me 133

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some business.”’ 3 But even in these unpromising circumstances, there were pioneering, successful attempts to develop internet content. News media sites were used in the countries they operated in by people who could afford the internet and by the global African diaspora. Outside of South Africa, there were three websites that became popular long before the internet became easier to use. One of the first Ghanaian websites was launched in 1996 by a radio station called Joy FM4 and was operated as an extension of the station, publishing listeners’ messages: ‘The users were in the thousands and were mainly people in offices as the internet was a luxury.’ 5 It then started publishing short news stories, which attracted users to the site who had missed the radio station’s news programmes. By 2020 it had a reach of one and a half million unique visitors, 70% of whom were from within Ghana and 30% from the diaspora. Three years after Joy FM launched online, news site Ghana Web was launched by a Dutch software engineer who came to this from print publishing for the Ghanaian diaspora.6 At its launch in 1999 the majority of its traffic came from the Ghanaian diaspora. However, with the arrival of smartphones it began to attract a sizeable number of users.7 In 2020 it had four million unique users, half of whom came from Ghana itself.8 As was the case with Ghana Web, sometimes this new African online content was encouraged by those outside the continent. In 2000 two American anti-apartheid activists9 launched AllAfrica, an aggregator site for African newspapers: it put news stories from independent African newspapers (like Nation Media in Kenya) online: ‘The website played a key role in encouraging African newspapers to put their content online.’ 10 In 2020 it had a monthly reach of twenty million users across all the platforms on which its content appeared. The sub-Saharan African internet existed, and many people launched online content and services before it was working well enough. There were a number of failures, both big and small. South African-owned Naspers tried to roll out e-commerce, online classified ads and business directories: it opened them in 2009 in several African countries but had closed them all by 2011. At a smaller scale, in the same year, a music 134

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platform, MwTunes, was launched in Malawi. At its peak it had ten thousand unique visits a month. As its founder recalled:

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It was painful but better than nothing. Your expectations have not been set any differently … but there was no opportunity to make money from ad revenue because people in the country just weren’t familiar with the concept yet. The rest of the local industry caught up about four years later.11

In 2010, Malians in the Tuareg city of Kidal in the north of the country were still swapping music on MP3-formatted cards to play on their mobile phones.12 In a 2005 survey in Nigeria before a 3G service was introduced, users were asked what features they wanted on their phones. Except for games (1.4%), all responses related to voice or how the phone worked.13 Without a smartphone it was difficult to imagine that a mobile phone might deliver more. The transition to digital life can best be captured anecdotally. Using a cab in any sub-Saharan African country before 2014, the driver would almost always ring a fellow driver or friend to get directions. In 2018 some Nairobi taxi drivers were pulling up Google Maps on their phones to answer the same question. In other words, they had shifted from analogue to digital thinking. Likewise, more sub-Saharan Africans now read newspapers online than in print form. In 2013, a half to two-thirds of featurephone users in six countries surveyed were accessing news and information using the internet on their phones on a daily basis.14 Not only is online more convenient but there is usually no charge for it. DRC: an entertainment website opens the door to new digital opportunities Online internet content took off in what might have seemed like one of sub-Saharan Africa’s largest but least promising digital countries, the DRC. In 2014, we were drinking at this local bar, music playing in the background, thinking this is so cool. We didn’t know who was playing … There was a local musician playing … but no one knows anything about him. What we needed was a Time Out [guide] about restaurants, clubs and bars.15 135

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They discussed ‘let’s do a website’ about entertainment venues. Acting on the idea, the three friends16 set up a website to showcase local content with interviews, fashion shows and concerts: We self-funded the journalism side of it. I had two people working in my dining room. It wasn’t making money but it was attracting attention … We got calls from concert organisers and musicians saying ‘can you come and cover this event? We’re releasing a new track can you cover it?’ It opened up an entirely different world for us. Wow, where is all this coming from? It was not just about the restaurants, clubs and bars, it was about the entertainment, the talent and the music. The website Voila Nights needed to be a platform to showcase Congolese artists.17

By 2017, the site had attracted two hundred thousand unique users a week18 and in 2020 its Facebook page had three hundred thousand followers. This may have been fun, but it was not a money-making proposition. However, the success of the website soon attracted revenues. A chance encounter led to one particular source of income: The CEO [of Samsung locally] saw me and asked: can you do online campaigns? Like washing your hands for Ebola to sanitise them? We brought in a few sponsors and had sanitisers distributed to schools. We built a Facebook app for them so people could participate, using viral content … We started bringing in a designer and buying Google Ads and ads on Facebook.19

This generated the first digital advertising agency in DRC, with a string of local and international brands (including Brasimba, Ecobank and Shoprite) whose social media accounts they managed. Voila Nights also started producing a terrestrial TV show. Other African countries, including Kenya, Nigeria and South Africa, already had growing online content and services markets. But it was more surprising that DRC – a country that had experienced several decades of civil war – was now moving into the digital age. In 2017, the country’s most-used apps were Facebook (2.7 million users), Instagram (estimated one hundred thousand users) and Twitter. They have enabled musicians

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to become the biggest influencers. Fally Ipupa has two million followers on Facebook and Instagram: Inos B who is a young musician is now one of the popular Vodacom superstars, who came from absolute poverty, and is now famous. Kofi Olamide is an influencer on Instagram on the fashion scene. We’ve just started seeing politicians getting into it. President Tshisekedi has a Facebook page [with 223,915 followers].20

These are modest numbers alongside the country’s estimated population of eighty-four million and, to date, most activity is concentrated in the country’s capital. But DRC is likely to follow the pattern found elsewhere in sub-Saharan Africa, where digital services are first taken up in the capital, then in regional cities, and spread much more slowly to rural areas.

The people who make digital media and entertainment and their challenges The field of sub-Saharan African online content is very wide and two of the most-used areas have been chosen here to highlight changes: media and entertainment. All the main global digital players – Amazon, Apple, Facebook, Google and Microsoft – have a significant consumer market presence in Africa, but this section is largely about sub-Saharan African digital content and services. A large research study for the Bill and Melinda Gates Foundation in 2013 asked what had changed most about media and communications in the last five years: Two responses were common to all those who took part: the greater amount of media available and the presence of the internet. The two are interconnected as wider media generally drives a wider set of viewpoints and information, with the internet acting as a backstop where people can get information not provided by traditional media or actually restricted by Government. This is very much the role it plays in slightly different ways in Ethiopia and Senegal.21

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The state of sub-Saharan African online media In Ethiopia nearly all media was government owned or in the hands of its supporters. By contrast, Senegal had a greater availability of media because of the liberalisation of media markets in sub-Saharan Africa, but there were various ‘red line’ topics that they avoided. Traditional newspaper and media groups were often the online news pioneers. They have benefited from increased audiences, but lost advertising revenues when they went online. Some – like Naspers’ News24 – have used the internet to expand their reach across the continent. The internet opened the door to a new set of players and a wider range of media with very different audiences: good examples would include Zimbabwe’s 263Chat, Pulse (owned by Ringier) and South Africa’s Daily Maverick. In 2006, two young Tanzanians, Mike Mushi22 and Maxence Melo, co-founded what is now called JamiiForums. It combined an alternative media site (for posting stories unacceptable elsewhere) and an opinion forum. It covered a range of subjects from politics, economics and entrepreneurship to relationships: ‘It’s user-generated content.’ 23 JamiiForums became a place where the disgruntled leaked sensitive documents: ‘It’s used by activists and human rights defenders to post various documents about corruption. It opened a space not offered by existing media and people have got used to that impact.’ 24 When it started, JamiiForums generated about ten thousand unique visits monthly, 80% from the diaspora. By 2010, with mobile internet penetration increasing with smartphone use, the diaspora accounted for only about 20% of its audience. At its high point, in 2010, it attracted two hundred thousand users a month.25 Eighty per cent of the content is in Swahili, the official language of the country. Its troubles with the government started in 2008: ‘President Bush was coming to [the capital] Dar es Salaam … they came to our places and said we were terrorists and kept us in jail for forty-eight hours. They were trying to find our servers to confiscate them.’ 26 The following year one of the co-founders was charged with obstructing an investigation for not handing details of who posted on the site to the police. They challenged this in the constitutional court, but 138

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lost the case: ‘Many were arrested and taken to court and it was not safe to use the site.’ The fear generated by these arrests pushed user levels down to fifty to sixty thousand a month. A decade later, in 2018, the government introduced a law to license media sites, with licences costing two million TZ shillings (approximately US$930). This was aimed at small, financially insecure media companies: ‘Failure to comply with the regulations – which also forbid online content that is “indecent,” “annoying,” or that “leads to public disorder” – would result in a five million Tanzanian shillings (2,202 US dollars) fine, a jail term of not less than a year or both.’ 27 Initially JamiiForums thought the legislation was about the money, but it also stipulated that companies must collect data on users posting: ‘The [government] can control the traditional media, but they haven’t been able to control the cyberspace. All these laws are about controlling the cyberspace.’ 28 Despite all these challenges, JamiiForums battles on. The alternative to surviving this kind of pressure is to operate outside the country.29 Since 2008, a small, self-funded online newspaper called Club-K has both chronicled and fought the corruption and human rights abuses of the Angolan government. It operates from outside of Angola so ‘we can be more independent. We don’t have to worry about the “red lines”.’ 30 The online site attracts more than sixty thousand unique users per month, the majority of whom come from inside the country. According to its founder, an advantage of the internet is that it is very easy to produce an online news site from almost anywhere: ‘With an online newspaper, you can write it anywhere, even at home and publish. I’ve got volunteers who send me stories. I get tips about things like construction in the wrong place. They will go and shoot a picture.’ Alongside online news platforms there has been, since 2015, a growth in ‘tabloid’ sites that do everything from reporting celebrity gossip to talking about love, sex and relationships. These include sites like Ghafla in Kenya and Linda Ikeji’s Blog and BattaBox in Nigeria. The latter is a video channel31 that covers food, indigenous customs, business hustles, street fashion and Naija Gist (gossip) and explores the social mores and behaviours of Nigerians. One item asked local university women students 139

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how many boyfriends they had. One interviewee demonstrated both how many and what purpose they served by showing the headings they were listed under on her phone: Expenses, Never a Dull Moment and My Love: ‘These women are in control of these relationships and know what they want.’ 32 In 2011, Swiss-owned media company Ringier entered the sub-Saharan African market, creating online tabloid news sites, classified advertising platforms and digital agencies. In Nigeria, Ringier operates Jobberman, Chekki and Private Property, and with an interest in francophone markets it has also bought Expat-Dakar.com. In March 2021 it claimed to be reaching over one hundred million people.33

The old Africa bites back: censorship, shutdowns and taxes One of the advantages of the internet has been its ability to spread information quickly, and faster than television and radio, a feature many African governments weren’t prepared for. Hence, while the internet has given ordinary people greater access to information, African governments have had less of a monopoly on it … many times information breaks out first on the internet more than on any other medium.34

According to Access Now, which tracks internet censorship,35 there were seventeen internet shutdowns in Africa in 2018, and ten in 2020.36 There have been many instances of African governments arresting individuals or shutting down the output of organisations they disagree with, often for online activity. Many of these actions are justified in the interests of ‘internal security’ and use existing ‘Public Safety’ legislation, often inherited from the colonial era. The pushback against the new spaces opened up by online media and platforms – as seen in the Tanzania example above – can take many forms. In 2018, for example, President Museveni in Uganda started taxing all the main social media platforms: ‘Social media chatting is a luxury by those who are enjoying themselves or those who are malicious.’ 37 Some of the older generation of African leaders find online media unnerving: Paul Biya in Cameroon referred to it as ‘a new form of 140

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terrorism’.38 But others have sought to fight ‘fire with fire’: former Nigerian President Goodluck Jonathan39 and current President Muhammadu Buhari have employed social media advisers to help government agencies build up digital capacity. In the main, presidents increased the number of people following them between 2018 and 2020; for example, President Macky Sall’s followers in Senegal increased from 562,313 to 1,080,587, and President Buhari’s Twitter followers in Nigeria from 650,000 to 2.6 million. One opted out after a successful run, seeking a quieter life. In November 2020 Kenya’s President Uhuru Kenyatta closed his widely followed Facebook and Twitter accounts, saying he got angered by comments on Twitter: ‘I would rather talk to my wife and sleep and wake up in the morning to work.’ 40 Mobile: the TV remote for online entertainment for young Africans Along with news, entertainment has become one of the most widely accessed forms of content in sub-Saharan Africa: ‘Mobile is the TV remote for young Africans. It gives them access to entertainment and services.’ 41 Whether it is Nollywood films from Nigeria, telenovelas, reality TV shows, comedy, satire, sports, betting or gaming, it can all be accessed online. The content ‘big hitters’ are not just based in Nigeria with Nollywood and Afrobeats, but in South Africa, Ghana, Kenya, Tanzania, Uganda, Ethiopia, Angola and some francophone countries (mainly DRC, Senegal, Côte d’Ivoire and Cameroon). There are two different types of audio-visual platforms available in sub-Saharan Africa: those ‘free-at-the-point-of-delivery’ (YouTube, Vimeo), and international and local pay-for platforms like Showmax, IROKOTV and Viusasa. The largest of the mobile operator, pay-for, video streaming platforms is Vodacom’s Video Play, with 883,000 active subscribers.42 The largest video streaming platform in Africa is YouTube. At the top end, its channel owners gain significant income from advertising based on the number of views on their platforms. Two of sub-Saharan Africa’s 141

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larger YouTube channel operators are Nigeria’s Aforevo (120 million views per month) and South Africa-based digital music company Africori (60 million views per month). Many African TV stations run channels on YouTube, attracting extensive audiences, both within their country of origin and from their diasporas. In 2021, Kenya’s Citizen TV had 2.37 million YouTube subscribers, Ivorian public broadcaster RTI had 1.53 million and Tanzanian public broadcaster TBC had 0.5 million downloads of its TBC Live app.43 One of the most interesting sub-Saharan African video streaming sites is IROKOTV, launched by diaspora Nigerian Jason Njoku. He started out by selling Nollywood movies on DVD online but realised that there was a bigger online opportunity. He began streaming this content using YouTube. By 2011, he had rights to a thousand films and was attracting a hundred million views. He moved back to Nigeria to develop the business and was one of the first sub-Saharan African start-ups to get major international investment. Venture capital investor Tiger Global saw an article about IROKOTV in TechCrunch, came and spent a day talking through the business with him and ‘the next morning we got a term sheet for US$3 million. It was for 20% of the business and gave us a US$12 million valuation. It was bizarre.’ 44 Ninety per cent of the business was diaspora users and Njoku waited until 2015 before focusing on Africa. The investors had wanted to invest in a mobile streaming app, as it would ‘become a strategic asset for somebody’.45 Njoku went from streaming to producing Nollywood content through IROKOTV’s own Rok Studios, run by his wife, Mary Njoku, a Nollywood actress, and this was bought in 2017 by French pay TV operator Canal+ (through one of its content companies, Thema). But the success with content was not mirrored in the video-streaming side of the business. Njoku concluded that sub-Saharan Africa’s internet users do not have the income to fuel the kind of subscriber explosion that is seen elsewhere: ‘The biggest surprise is that the consumer internet space in Africa didn’t grow … You had billion-dollar companies in Latin America and South-East Asia that scaled really quickly.’ 46 Therefore the company is changing its

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focus back to diaspora Africans, and announced in February 2021 that it would seek to raise between $20 million and $30 million on the London Stock Exchange Alternative Investment Market. There is a parallel pirate market for film and TV. This has two main forms: shops and street sellers selling pirated DVDs and illegally streamed downloads from Torrent47 sites. Torrent sites are among the top ten mostused sites in many sub-Saharan African countries. Nigerian street vendors, for example, have used Torrent to download film and TV series that they distribute using USB sticks that buyers bring to them.48 African digital content in search of business models Companies providing digital content and services – both African and international – need revenues to survive. In broad terms, there are two types of business models: the user pays (an individual or a business) or an advertiser or sponsor pays. Given the relatively low levels of disposable income among the key target constituencies of young users, pay-for services have struggled to find a foothold. For example, there are only 2.68 million49 (out of 1.1 billion) sub-Saharan Africans paying for video-streaming services. Piracy has long played a role, as African users acquired content on USB sticks in the past and are now likely to do so using Xender, an app that allows people to create a Wi-Fi hot-spot and transfer a 200 MB movie file in five seconds: ‘Everything else will be a drop in the ocean in five years’ time. You don’t need data. The next 500 million will spend less on content and come from lower income brackets. Consumer adoption [of digital video on mobile] will be piracy.’ 50 And as one industry executive pointed out, We don’t have a [video-streaming] market that we have to develop – people are consuming it every single day. Money is being spent in pirated markets and it is the challenge for [streaming] operators to provide a better-quality service at near or equivalent prices. The money is out there, it’s whether it’s moving in your direction or not.51

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Indeed, with better streaming services platforms, it seems that piracy streaming has reduced from 50% of total consumption to 20% of consumption in South Africa.52 The alternative to a pay-for model is to emulate the Spotify model, which offers a free service with advertisements and a paid-for, premium, ad-free service. Kenyan music-streaming service Mdundo has six million active users across both categories. It has signed advertisement deals with global and pan-African brands including Safaricom, Standard Chartered, Nivea, Oxfam and Serengeti.53 But, at the time of writing, digital platforms were generating relatively small amounts from online advertising revenues: ‘There’s not always been the same level of adoption. Implementation has lagged behind enthusiasm.’ 54 Before the arrival of Facebook and Google, local African websites and international sites with African content would sell direct to advertisers. In 2014 Uganda’s news portal UGO was able to reach 150,000 people: ‘The later challenge was cheaper ad platforms like Facebook and Google. We weren’t ready for that.’ 55 The same happened to African news aggregator, AllAfrica: We’ve suffered a lot in the last five years as Google and Facebook have monopolised ad spend. We’ve always sold direct and got a lot of revenues from Google Adsense. We had revenue on every page. The pay model only works for a few. Ad revenue is declining. It’s now sponsored content and funded projects from US foundations and other funders.56

The global companies have also affected artists’ revenues. As a music executive who worked with both anglophone and francophone music artists, particularly Nigerian artists, observed back in 2017: ‘In Africa, YouTube is the main music streaming platform in user terms and 40–70% of revenues for African artists are coming from YouTube.’ However, the average that artists were able to earn per view was only ‘0.0 something euros’.57 The changes affected media owners too: ‘It’s a bloodbath. Fewer and fewer South Africans are buying newspapers. It’s really testing to see print revenues translated into digital revenues.’ 58 By 2017, South Africa’s Mail 144

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and Guardian faced the classic digital squeeze that newspapers worldwide are trying to survive. The bulk of its revenues are still driven by print: 60%, including both print sales and advertising. The balance comes from events (20%), digital advertising (10%) and other sources.59 Two years later, the position was much the same: Eleven of the top 15 local sites measured by [internet monitoring company] IAB South Africa are news sites, but this healthy penetration doesn’t translate into significant digital revenue. There are a number of small, fiercely independent digital-only players, like Daily Maverick, Daily Vox, GroundUp, New Frame, and amaBhungane, which rely on some combination of donors and crowdfunding.60 Traditional publishers who took their news online have also developed comprehensive mobile web offerings in order to cater for the featurephone market as they cannot [commercially] only offer an app-based product. Alas, now the duopoly [Facebook and Google] dominates the budget allocations much like they do in most markets with 60%–70% of mobile/ digital ad budgets being assigned to these two options.61

Specialist print media (with much smaller circulations) are harder to replicate online. Former Big Cabal CEO, Seyi Taylor, found that despite reaching two hundred thousand people (across various online platforms) with Tech Cabal, an online tech news platform, its online advertising base alone was insufficient to support it.62 Sub-Saharan African mobile games development is even tougher: ‘Globally, games development is quite a difficult process … Revenue share with mobile operators where they take 70% has changed (a bit in Africa) but you have these sort of problems.’ 63 Faced with these challenges, some of the new digital players – like Africori and EatOutKenya – operate a hybrid model, combining digital and physical activities. Even South Africa’s Mail and Guardian, for instance, before COVID-19, generated 20% of its revenue from running face-to-face events. Both international social media platforms and mobile operators are able to play a gatekeeping function in relation to digital content and services, controlling advertising and distribution opportunities. While things that are accessible on the internet require permission from neither 145

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of these players, the ability to place and operate an app on a mobile platform does. This type of access is particularly important for media services and platforms of debate to ensure a diversity of media and opinion, and it can impede competition if, for example, the mobile operator is also a digital content or service player.64 Africa’s digital sphere: another form of life as we know it By 2020, fifteen out of fifty sub-Saharan African countries, had over 50% internet penetration by population; twenty had below 20% and the remainder were between 20% and 50%. However, no fully accurate internet user data exists for all African countries. The countries with the highest penetration are nearly always the wealthiest.65 Those with the lowest penetration rates include: Chad (6.3%), South Sudan (7.9%), Eritrea (8.3%), DRC (8.3%), Madagascar (9.5%), Burundi (9.7%), Somalia (10.7%), Niger (11.5%), Togo (12.2%) and Liberia (12.3%). Six of these countries have experienced civil war in the last decade. For example, in Somalia a quarter of the (largely urban) respondents accessed the internet weekly on their mobile phone, according to a 2015 Voice of America survey. Before 2015, use of the internet was an almost entirely urban phenomenon, although an increasing number of rural populations now have access. In 2013 in South Africa, sub-Saharan Africa’s most developed country, only 24% of those in rural areas were internet users, a figure that had increased by 2015 to 30–55% on mobile, depending on the province.66 Furthermore, the speed of internet connection has accelerated faster in urban areas (allowing access to video material) than in rural areas.67 For example, YouTube appears in the top ten of website use rankings68 and has considerable numbers of views and subscribers. The starting point for most sub-Saharan Africans using internet content is very everyday. A male Rwandan focus group participant in 2017 recalled that it was his interest in the European Champions League as well as in communicating with friends.69 But once they started, it became ‘a veritable tool for news, social interactions, education, business, online shopping, funds transfer, career building, among others’.70 A female Ugandan research 146

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group contributor described getting a lot from her smartphone (in terms of internet and social media) without putting a lot into it. Among other things, she accessed information from religious leaders about ‘marriage, dowries and business’.71 The biggest single defining feature of the sub-Saharan African internet user is education: the better educated they are, the more likely they are to use the internet. Across a wide range of research surveys, use was highly gendered, with men consistently having higher rates of access than women. Less-educated potential internet users had a harder time imagining what it might do for them. According to one Nigerian farmer who took part in a survey by a low-cost mobile phone company: ‘It doesn’t help my business. I farm, it’s just me, my hoe and the farm.’ Likewise another survey respondent said: ‘We do not need the internet for health. There is the hospital that is there, you do not need to go on the internet.’ 72 This person’s assumption was that if they felt ill, he or she would physically go to the hospital. This is more likely to be the case in poorer countries with less welleducated populations. So, for example, only 10% of Sierra Leoneans used mobile internet to get information, compared to 95% who simply called other people, according to a 2016 BBC Media Action survey.73 Friends and family and a range of other face-to-face encounters were as likely to be information sources as the internet, according to a 2017 USAID survey in Somalia.74 Data on time spent on the internet is only really available for markets with larger numbers of users. According to one 2019 source, South Africans were spending 9 hours 22 minutes daily on it – 3 hours and 10 minutes on social media. Ghanaian internet users spent 3 hours 58 minutes on mobile devices – 3 hours and 1 minute on social media. This compared to an overall total of time spent in Kenya of 3 hours and 23 minutes.75 The cost of the data needed to use the internet constrains more frequent use in many sub-Saharan African countries. Across a range of sub-Saharan African country internet surveys, three categories of online content use stand out: social media (including Whats­ App), entertainment (often through YouTube) and (largely local) news 147

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websites. Social media has many different uses: it is a way of keeping up with friends, family and colleagues, a news medium, and it has become a campaigning tool. Those following both media and entertainment Facebook pages run into the hundreds of thousands, if not millions. All these different uses take place alongside each other, and although some users segregate the professional from the personal, many appear not to. However, from 2020 onwards, there was a clear trend to the use of a wider number of social media platforms, including Instagram, Pinterest and TikTok. The major online content categories cut across all socio-demographic distinctions. But twenty- to thirty-year-olds are more likely to be interested in social media and those over thirty-five used it more for work-related activities and research.76 Online content used by a significant minority (below 20%) of internet users included: posting online content and blogging, games, peer-to-peer piracy sites, searching, accessing public services, ride hailing and e-commerce. As social media use has grown more widespread since 2012 (see Chapter 3), individuals’ use of social media often appears to threaten traditional social norms. One study found that female ICT users, in particular, limit their use of technology so as to conform to existing gender norms, ‘often complying with their male partners’ wishes’.77 One study revealed that Nigerian husbands might forbid their wives use of the internet: ‘Some don’t use the internet in marriage – the husband will say no Facebook or WhatsApp.’ 78 A Ugandan study revealed how one woman avoided chatting to male friends on social platforms because her partner might object. The same study revealed how a Ghanaian woman experienced new tensions in her relationship after she had tracked her boyfriend online, revealing his infidelity.79 Social media is often seen as encouraging democracy, but may simply reinforce existing political behaviours. A study of the use of Twitter during elections between 2011 and 2013 in Ghana, Kenya and Nigeria found that: In Nigeria, where divisive identity politics feed violence and electoral misconduct, discussion of tribe, region, and religion dominate mentions of platform policies. In contrast Ghanaians, who enjoy the most robust democracy of the three countries, were seven times more likely to discuss 148

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policy issues rather than identity. Kenyan democracy is still undergoing consolidation, and tweets again reflect this, with almost as many tweets devoted to tribal identity as campaign policy. These findings suggest that social media discussions may echo the state of democratic deepening found in a country during its national elections.80

In digital life, the devil often has all the best tunes. Gambling has been a much-discussed driver of both internet and mobile money use in subSaharan Africa. Betting sites feature in the top twenty most-used website rankings for all African countries analysed. According to the findings of a 2016 study, a third of respondents in Kenya gambled.81 Pornography also drives considerable internet use. In 2015 the global site Porn Hub recorded large increases in mobile use in Chad and Ethiopia.82 In 2018 it ranked South Africa twentieth in worldwide use of the site.83 The same year, Rwanda was ranked twenty-ninth out of all African countries accessing the site, with women making up a claimed 27% of its users. In 2019 it identified 37% of those using its site in South Africa as women – a higher-than-average level of use by women across Southern Africa. The authors of the only article on the subject noted that ‘nearly all literature … refers to the global North’. Their study focused on Ethiopia and Uganda in the context of available sex education; research participants told them that ‘pornography delivered the information they needed in an exciting manner’. The study drew attention to high levels of sexual violence experienced by women, and noted that they were often targets of ‘revenge porn’.84 For a significant minority, the internet and social media is not just about consuming content, but creating user-generated content. A 2013 survey of four sub-Saharan African countries found that posting on online forums one or more times a day was the most popular activity (as a percentage of internet users): Tanzania (44%), Ghana (43%), Northern Nigeria (17%), Senegal (15%). Writing a blog was the next most popular activity: Senegal (19%), Tanzania (17%), Ghana (11%), Northern Nigeria (4%). The third most popular activity was posting a photo: Tanzania (29%), Ghana (20%), Northern Nigeria (8%), Senegal (7%); and the fourth was posting a video: Ghana (14%), Tanzania (10%), Senegal (7%), Northern Nigeria (1%). 149

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A Pew study provides a more recent picture of self-generated content. In 2019, for instance, it found that 28% of respondents in Kenya posted pictures or videos and 25% posted their thoughts to social media. The level of posting in South Africa was much higher: 45% posted pictures and videos and 38% posted their thoughts. The study found that those survey respondents with more education were more likely to post to social media.85 How online fits into domestic life Digital life takes place within domestic settings where there used to be a single choice of listening or viewing – be it in a single household or of a village’s collective TV. A young Ugandan focus group participant gave a new twist to domestic power relations around TV watching.86 His siblings and aunt did not let him use the TV or radio to listen to music he likes: ‘I wouldn’t get time to listen to music because of the fights at home but now whenever I feel like listening to music [on a mobile phone], I control it.’ 87 A Kenyan participant made much the same point about accessing news: ‘in the village we had one television and you had to go to the neighbor to know what is going on through the country but … with the phone now you are able to access the news anytime and anywhere’.88 Young women fit their digital life around domestic chores and school work. Focus group members from Kenya and Uganda talked about how they like to play games on their mobile phones after the household chores have been done.89 Indeed, digital life fits into gaps in the day for most users. For a female research group member in Rwanda these activities were clearly prioritised: ‘The first thing I do when I wake up is to check my WhatsApp messages, chat with friends and I then read online local news from igihe.com and umurimo.com. I reconnect again at lunch time during the break and evening hours.’ 90 East African workers sometimes face a daily commute on a matatu (bus) which can be over an hour each way: this is an ideal time to look at social media, check the news and play games. Matatu Wi-Fi provider Moja provides free updates to the

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Facebook app and had 350,000 monthly active users in Nairobi and Kigali in 2018.91

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Living in the tower of Babel: language and literacy divides Participating in digital life requires a significant level of literacy, in the sense of being able to read and write. Eleven countries in sub-Saharan Africa in both 2015 and 2020 recorded literacy levels below 50%: examples include Niger (19%), South Sudan (32%), Chad (40%) and Liberia (48%). Put bluntly, 50% of the population of these countries would be unlikely to be able to use the internet.92 Furthermore, this data must be treated with caution: ‘Conventional literacy data tend … to overestimate literacy levels … ’.93 These inequalities are highly gendered in countries with lower levels of literacy. The disparity between men and women’s literacy can be as high as 26%. For example, in Nigeria, which has a large population, male literacy is 71% and female literacy is 52%.94 Internet use in sub-Saharan Africa is also made more challenging by the fact that there are over two thousand languages, and most are based on oral rather than written traditions. Transcriptions are not always available for either print or online provision or translation. Few have their own technical vocabulary. A male smartphone user in Senegal captures the challenge well: ‘I can read Wolof [the country’s most used language] but it takes too long and I don’t understand certain words.’ 95 Users may be less fluent in (the most widely used) online languages,96 for example Arabic, English, French and Portuguese. These are often official languages but are spoken by only a minority of people. Indeed lack of fluency in these languages may discourage internet use. For example, according to the Beyond Access – Rwanda Report: ‘This is particularly true for participants who dropped out from primary and secondary school.’ 97 ‘The number one reason is illiteracy and lack of understanding of foreign languages like English and French to manipulate devices and understand the Internet content.’ 98 In Nigeria, 16% of the population speak Pidgin, an English-based creole language.

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Despite the spread of internet access and digital content and services, sub-Saharan Africa is still divided into three broad groups that have very different experiences of the world: those with access to a digital life, those with only basic phones using voice and SMS and those without any kind of access. The next chapter looks at how development agencies have sought to narrow the digital divide between these different groups.

Notes 1 Author interview, Anders Comstedt, 21 July 2020. 2 There were 17,087 million websites in 2000, not all of which were active. www.internetlivestats.com/total-number-of-websites/ (accessed 7 December 2021). 3 Author interview, Sadibou Sow, 13 July 2020. 4 Owned by Kwasi Twum’s Multimedia Group. 5 Author interview, Richardson Doe and Ken Ansah, Multimedia, 15 July 2020. 6 He married a Ghanaian woman. 7 Author interview, Rob Bellaart, 18 June 2020. 8 It has expanded to other countries including Cameroon, Nigeria and Tanzania. 9 Reed Kramer and Tami Hultman. 10 Author interview, Reed Kramer, 17 June 2020. 11 Author interview, Wiza Jalakasi, 4 August 2020. 12 C. Kirkley, ‘Desert discs: how mobile phones are at the root of Saharan music’, The Guardian (1 November 2010), www.theguardian.com/music/ musicblog/2010/nov/01/music-from-saharan-cellphones-mali (accessed 7 December 2021). 13 F. Odufwa, Mobile Handset Report (eShekels, 2005). Based on an omnibus survey of 20,000, skewed to ages 18–34. 14 Ethiopia (55%); South Africa (62%); Ghana (63%); Kenya (68%); and Nigeria (69%). 15 Author interview, Shalini Moodley, 8 July 2020. 16 Shalini Moodley, Nathan Dahan (who became her husband) and Matan Friedman; the company was called the Metro Group. 17 Video interview, Shalini Moodley on creating DRC’s leading entertainment website and a music web, 7 January 2017, www.youtube.com/ watch?v=Oq5SRIMoy_M (accessed 7 December 2021). 18 Eighty-five per cent of those uniques came from mobile phones (largely smartphones) and 60–70% were from the youth segment. 19 Author interview, Shalini Moodley, 8 July 2020 20 Ibid.; Facebook page accessed 9 September 2021. 152

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Sub-Saharan Africans live the digital life 21 R. Southwood, The Sub-Saharan Media Landscape – Then, Now and in the Future (Balancing Act for Bill and Melinda Gates Foundation, 2014). 22 He also runs a digital communications agency largely used by NGOs. 23 Co-founders Maxence Melo and Mike Mushi. Latter interviewed by author, 2 September 2020. 24 Ibid. 25 ‘The brains behind “jamiiforums” Maxence Melo and Mike Mushi’, Yectanzania. com (21 September 21, 2016), https://justinepetersontz.wordpress.com/2016/09/21/ the-brains-behind-jamiiforumsmaxence-melo-an-mike-mushi/ (accessed 7 December 2021). 26 Author interview, Mike Mushi, 2 September 2020. 27 S. Dark, ‘Strict new internet laws in Tanzania are driving bloggers and content creators offline’, The Verge (6 July 2018), www.theverge.com/2018/7/6/ 17536686/tanzania-internet-laws-censorship-uganda-social-media-tax (accessed 7 December 2021). 28 Author interview, Mike Mushi, 2 September 2020. 29 Other examples include Nyasa Times on Malawi, Sahara Reporters on Nigeria and the Ethiopian diaspora blogosphere. 30 ‘Speaking truth to power – Angola’s leading online news site Club K tracks corruption and human rights abuses’, Digital Content Africa, 118 (August 2018), https://bit.ly/2TaDcTy (accessed 7 December 2021). 31 Launched by Yemisi Ilo and her partner Christian Purefoy, a former CNN correspondent. 32 Video interview, Yemisi Ilo, BattaBox, 28 October 2014, www.youtube.com/ watch?v=xJvrTBopQyg (accessed 7 December 2021). 33 ‘Pulse set to expand to Uganda and Côte d’Ivoire’, africanews (11 March 2021), https://guardian.ng/apo-press-releases/pulse-set-to-expand-to-uganda-cotedivoire/ (accessed 7 December 2021). 34 T. Parker, ‘Internet and social media shutdowns on the African continent’, Global Risk Insights (21 February 2020), https://globalriskinsights.com/2021/02/ internet-and-social-media-shutdowns-on-the-african-continent/ (accessed 7 December 2021). 35 www.accessnow.org/keepiton/ (accessed 7 December 2021). 36 Paradigm Initiative, Digital Rights in Africa Report 2019 (Paradigm Initiative, 2019). 37 ‘New taxes on OTT services will damage Africa’s digital transformation and its benefits’, Balancing Act’s News Update 933 (6 July 2018), www. balancingact-africa.com/news/telecoms-en/43566/new-taxes-on-ott-serviceswill-damage-africas-digital-transformation-and-its-benefits-ugandas-big-mansays-social-media-chatting-is-a-luxury (accessed 7 December 2021). 38 Parker, ‘Internet and social media shutdowns 39 See video interview with Uchechi Chuta, 30 October 2011, www.youtube.com/ watch?v=1In70Z2CiJE (accessed 7 December 2021). 153

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Technology influences 40 ‘Kenya’s president quits Twitter, gives reasons’, Arise TV (25 November 2020), www.arise.tv/kenyas-president-quits-twitter-gives-reasons/ (accessed 7 December 2021). 41 Video interview, Olivier Laouchez, CEO, Trace TV, 19 November 2016, www.youtube.com/watch?v=7RfCOOj4nVo (accessed 7 December 2021). 42 Vodacom Annual Results (31 March 2020), www.vodacom.com/pdf/investor/ annual-results/2020/presentation.pdf (accessed 7 December 2021). 43 Social Blade, https://socialblade.com/ (accessed 11 January 2021). 44 Author interview, Jason Njoku, 16 August 2020. 45 Ibid. 46 Ibid. 47 Sites that exist to distribute pirated content. 48 R. Southwood, ECOWAS ICT Regulatory Watch Initiative on Regulatory Regimes – Over-The-Top Services (World Bank, 2018), p. 24. 49 J. Easton, ‘SVOD subs to increase by six times in Africa’, Digital TV Europe (13 January 2020), www.digitaltveurope.com/2020/01/13/svod-subs-to-increaseby-six-times-in-africa/ (accessed 7 December 2021). 50 ‘Africa’s new digital piracy – sharing movies and music using Android file sharing apps like Zender’, Digital Content Africa 60 (March 2016), https:// bit.ly/3ihgiac (accessed 7 December 2021). 51 Author-moderated panel, Chris Savides, formerly Showmax at DISCOP, November 2017. 52 ‘Gaming, VoIP, and YouTube growing rapidly in South Africa’, MyBroadband. co.za (21 February 2017), https://mybroadband.co.za/news/internet/197491gaming-voip-and-youtube-growing-rapidly-in-south-africa.html (accessed 7 December 2021). 53 B. Seroto, ‘Mdundo reaches 6 million users’, Music in Africa (2 November 2020), www.musicinafrica.net/magazine/mdundo-reaches-6-million-users (accessed 7 December 2021). 54 Author interview, Musa Kalenga, formerly Facebook, 5 August 2020. Digital advertising spend as a total of all advertising spend: East and West Africa: 15–25%, South Africa: 5–12%. 55 Author interview, Albert Mucunguzi, 18 August 2020. 56 Author interview, Reed Kramer, 17 June 2020. 57 ‘DISCOP Africa – key video on demand players give their views on Africa’s digital content future’, Digital Content Africa 99 (15 November 2017), https:// bit.ly/38SsZzM (accessed 7 December 2021). 58 Khadija Patel, editor, Mail and Guardian, quoted in ‘South Africa’s Mail and Guardian in the eye of the digital disruption storm but looking to improving financial results’, Digital Content Africa 95 (September 2017), https:// bit.ly/2SiJVKv (accessed 7 December 2021). 59 ‘South Africa’s Mail and Guardian in the eye of the digital disruption storm.’

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Sub-Saharan Africans live the digital life 60 N. Newman, C. Roper and A. Schulz, Reuters Institute Digital News Report 2019 – South African Supplementary Report (Reuters, 2019). 61 Author interview, Sean Pashley, 8 September 2020. 62 Video interview, Seyi Taylor, Big Cabal Media, on creating Zikoko, an online media platform for African millennials, 7 December 2017, www.youtube.com/ watch?v=knxgi7wQCWY (accessed 7 December 2021). 63 Video interview, Benedict Olumhense on the barriers to success in the Nigerian games industry, 10 April 2016, www.youtube.com/watch?v=au9SCXNtLWY (accessed 7 December 2021). 64 Southwood, ECOWAS ICT Regulatory Watch Initiative. 65 www.statista.com/statistics/1124283/internet-penetration-in-africa-by-country/, March 2020 (accessed 7 December 2021). 66 ‘More than half of SA households now have internet access’, Hypertext (2 June 2016), https://htxt.co.za/2016/06/02/more-than-half-of-sas-population-nowhas-access-to-the-internet/ (accessed 7 December 2021) – see 2015 Household survey table. 67 Southwood, The Sub-Saharan Media Landscape. 68 Two services accessed were Alexa and SmilarWeb. 69 RIA Beyond Access Study – Rwanda Report (RIA, 2017), p. 17. 70 RIA Beyond Access Study – Nigeria Report (RIA, 2017), p. 5. 71 Bailur et al., Digital Lives in Ghana, p. 70. 72 Presentation, ‘Nigeria mobile phone market – a snapshot’, KaiOS (KaiOS, 4 March 2020). 73 A. Wittels and N. Maybanks, Communication in Sierra Leone: An Analysis of Media and Mobile Audiences (BBC Media Action, 2016). 74 L. Robinson, L. Malla and L. Oing, Somali Perceptions Survey Part 1 (USAID, 2017) – see Tables 2 and 4. 75 Digital 2020 (Hootsuite, 2020), https://datareportal.com/reports/ (accessed 7 December 2021). Data available for 2020: South Africa: 10 hrs 6 mins for internet and 3 hrs 32 mins for social media. Kenya: 3 hrs 42 mins for social media. No new data for Ghana. 76 RIA Beyond Access Study – Rwanda Report, p. 15. 77 Ibid. 78 Ibid. 79 Bailur et al., Digital Lives in Ghana, p. 76. 80 M.L. Best and A. Memg, ‘Twitter democracy: policy versus identity politics in three emerging African democracies’, ICTD Journal 15 (2015), http:// dx.doi.org/10.1145/2737856.2738017 (accessed 7 December 2021). 81 Mozilla Foundation, Stepping into Digital Life – a 2016 Digital Survey of Kenya (Mozilla Foundation, 2016). 82 www.pornhub.com/insights/pornhub-2015-year-in-review (accessed 7 December 2021).

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Technology influences 83 www.pornhub.com/insights/2018-year-in-review#countries (accessed 7 December 2021). 84 K. Cheney, A. Kamusiime and A. Mekonnen Yimer, ‘Feeling, blue: pornography and sex education in Eastern Africa’, IDS Bulletin 48.1 (2017), https:// bulletin.ids.ac.uk/index.php/idsbo/article/view/2846 (accessed 7 December 2021). Participants in the study were aged 12–26 and were both male and female. 85 ‘Pew: mobile and social media users in emerging markets have more diverse social networks’, Pew (23 August 2019), https://news360.com/article/505479796 (accessed 7 December 2021). 86 D. Morley, Family Television (Comedia/Routledge, 1986). 87 S. Bailur et al., Digital Lives in Ghana, p. 32. 88 Ibid., p. 39. 89 Ibid., p. 43. 90 RIA Beyond Access Study – Rwanda Report, p. 17. 91 ‘Got my Moja working – BRCK’s free Wi-Fi service targets bus and matatu users in Nairobi and Kigali’, Balancing Act’s News Update 949 (2 November 2018), www.balancingact-africa.com/news/telecoms-en/44294/got-my-moja-workingbrcks-free-wi-fi-service-targets-bus-and-matatu-users-in-nairobi-and-kigali (accessed 7 December 2021). 92 Comparison between www.worldatlas.com/articles/the-least-literate-states-ofafrica.html (accessed 7 December 2021) and https://worldpopulationreview.com/ country-rankings/literacy-rate-by-country (accessed 7 December 2021). 93 P. Easton, Sustaining Literacy in Africa: Developing a Literate Environment (UNESCO, 2014). 94 CIA Factbook, which uses 2015 data. 95 Presentation, ‘Etudes sur les usages et preferences du digital au Senegal’, Yux, 2018. 96 G. Barrie, J. Kendall and A. Wills, Conversational Interfaces and the Long Tail of Languages in Developing Countries (Caribou Digital, 2019), https:// dfslab.net/wp-content/uploads/2019/01/NLP-Language-Divide-Report-.pdf (accessed 7 December 2021). 97 Beyond Access – Rwanda Report, p. 15. 98 Ibid.

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6

Sprinkling on the magic dust: digital’s impact on development (1982–2020)

This chapter looks at how communications became the magic dust for development; the shift from information communication technology for development (ICT4D) to mobile for development (M4D); the transition to a wider palette of technologies; and the long challenges to ICT4D in Africa, learning and agriculture. It might seem perverse to start a chapter on technology and development with the story of one of the world’s largest refugee camps. But the snapshot presented in the next section illustrates that development agencies’ operating costs can often be improved by using the same technologies as are used elsewhere, not least by connecting camps to fibre networks and delivering aid money directly to refugees by mobile money. It also opens up a second theme of the chapter, which is how development agencies use technologies, and their use, or lack of use by so-called ‘beneficiaries’. Dadaab: the largest refugee city in Africa gets wired up Abdikadir Omar’s sister and his journalist parents were murdered in Somalia in 1991 as the country fell into a civil war that continues to this day. At fourteen years old he escaped and walked across the desert to the Dadaab refugee camp. He has lived in the camp for thirty years and is now married, with three young children. Dadaab is actually made up of four separate refugee camps in a bone-dry part of Kenya where the sheer heat of the day almost literally takes your breath away. Its population has 157

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fluctuated from half a million in 2012 to around 250,000 in 2021. Even with this reduced level of population, it can still lay claim to being Kenya’s third-largest city: ‘they’re inside a prison environment. There’s nothing to do in a refugee camp. You wait for food, you wait for water.’ 1 In 2016 the Kenyan government insisted that the camp be closed, claiming that it harboured Al Shabaab members. Financial incentives were offered and some refugees returned to Kismayo in Somalia, which was under the control of the Kenyan army operating as part of the UN’s African Union Mission in Somalia. In mid-April 2021 the United Nations High Commission for Refugees (UNHCR) announced that it had given the Kenyan government proposals for the closure of Dadaab and Kakuma refugee camps. ‘When the camps were first set-up there were no phones or internet. Only UNHCR had [mobile satellite] handsets for their operational activities. Later on it got some internet from UNHCR and its partners.’ 2 Prompted by a severe drought in the Horn of Africa in 2011, a consortium of NGOs, through an organisation called NetHope (with support from Microsoft), decided to bring the internet to the camp. By aggregating demand for the service from the NGOs working in the camp, it was able tell two of Kenya’s mobile operators – Orange and Safaricom – that it would buy a 50 Mbps link. The project started with a microwave link, but eventually fibre was installed: In 2014, there were hundreds of guys digging trenches in the desert to put the fibre loop in. Now it’s connected to Nairobi. We went from satellite to microwave to fibre. There’s now fibre to Garissa (about two and a half hours away from Dadaab). We dropped the price per Mbps from a few thousand dollars to US$350 and then down to US$190.3

The NGOs involved made significant savings, measured in the hundreds of thousands of dollars.4 In a recasting of American psychologist Abraham Maslow’s hierarchy of needs, communications is now essential: ‘When disaster strikes, the immediate needs are obvious: food, water, shelter and medical supplies, but none of these necessities reach survivors

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without a robust communication network to enable relief workers to save lives.’ 5 ‘In phase one, we connected only the humanitarian organisations: there were sixteen of them … In phase two we connected the schools, medical centres and outreach to the refugees. The Norwegian Refugee Council enabled refugees to gather around the school and get a Wi-Fi signal.’ 6 Microsoft provided a learning centre to UNHCR, which survives to this day: ‘We wanted to use it to help improve teaching through higher access to relevant teaching material and up-to-date information that teachers could use, and add educational videos and pictures for students into the mix.’ 7 Connecting to the internet and mobile networks has changed things, but not always in the ways envisaged, as was noted in a 2019 report from the International Labour Organisation (ILO): M-Pesa is mainly used by refugee business owners to pay middlemen and suppliers in Nairobi in order to obtain goods, although withdrawal charges constitute an additional cost. In the camps business owners prefer cash to mobile payments in order to avoid these charges, as well as to avoid any accidental misuse of money via M-Pesa. In spite of the presence of these services, it is still common for both refugee and host community members to keep their income on hand in cash.8

However, World Food Programme payments to refugees have been sent using a Safaricom service called SurePay that has restrictions on where the money can be spent. Another service, Bamba Chakula, allows relatives and friends to send funds that can be spent in selected shops. The ILO report found that as a result there had been ‘an increase in the vibrancy of local markets’.9 Online access also meant that the University of Geneva was able to run a ‘blended learning’, distance training course for junior healthcare professionals in Dadaab. Course materials were delivered using a Moodle platform. A USB stick provided to each student contained all written materials, by-passing internet connectivity issues. Course materials were complemented by teaching support from medical students via e-tutorials

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on WhatsApp. Students also received a face-to-face teaching input. Twentyseven students were recruited, eighteen finished the course and fourteen passed. Of those finishing, five were women and thirteen were men. Most had previous healthcare experience of some kind. Two students who returned to Somalia were able to complete their course at a computer lab at a university in Mogadishu. The course assessment provides useful insights into how technology interacts with social norms, being both transformative and at the same time bounded by them. The course initially had difficulties recruiting women, which it overcame. As one student told the researchers: ‘Women will marry and they will leave school. But now is a new world I want to learn.’ Even education opportunities using technology are understood through the prism of the country’s social structure: ‘The majority clans are getting the jobs. Minorities will not get jobs even with degrees.’ But the students appreciated the opportunity to ‘learn from anywhere’ provided by the course: ‘If you move you are not left behind, wherever I go I can get access to my studies without any limitations.’ Students had largely expected to simply have to learn things by heart: ‘Students were insufficiently prepared to embrace critical thinking. They valued memorising the course material instead of understanding it.’ The students wanted ‘a teacher to help us memorising the book’.10 For personal use, Abdikadir uses both voice calling and internet: Ninety-eight per cent of refugees in the camp use mobile phone and internet to call and receive calls from relatives. I use Facebook and WhatsApp but rarely use e-mail. The internet is very useful in day-to-day life. The disadvantages are if it’s not properly used. If parents are not aware of what children do, they may go to bad sites like pornography, also to Al-Qaeda related sites. The internet makes this easier.

The remainder of this chapter looks at how development tackled early technology adoption; the emphasis on ‘mainstreaming’ to focus more on tackling poverty; the use of mobiles for M4D; the wider uses enabled by the changes already described in Chapter 3; and the long challenges to ICT4D in Africa, learning and agriculture. 160

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Communications becomes the magic dust for development The term ICT4D was coined by a director of Canada’s IDRC to shorten his programme’s title.11 It is perhaps the easiest portmanteau word to describe: ‘the practice of using technology to assist poor and marginalised people in developing communities’.12 These technologies were seen by some in the development community as having the potential to make people’s lives easier; make services more accessible; allow citizens to take part in a conversation about what they want; increase efficiencies in the public, private and development sectors; and generate new jobs and investment. But there was and remains no direct translation from such potential to what actually happens. In 1982 the ITU plenipotentiary conference set up a commission to look at how ‘to identify the obstacles hindering communications infrastructure development, and to recommend ways in which the expansion of telecommunications across the world could be stimulated’.13 With the same focus on telecoms, the World Bank had also published a report two years earlier looking at its impact on economic development.14 A later edition of this report noted one of the most important shifts: Telecommunications, earlier regarded as a minor component of infrastructure, became in the 1980s a strategic factor of development at all levels … Traditional telecommunications sector structures, based largely on state monopolies, began giving way to more complex and flexible arrangements featuring reduced monopoly privileges, diversified and increasingly competitive supply of services and networks, increased participation of private capital and private enterprise, and a shift of government responsibilities from ownership and operation to policy and regulation.15

Although ICT4D has involved a range of the technologies (including computers, radio and TV), its key focuses have been the internet and mobile phones. In broad terms, donor agencies and the groups they funded carried out a number of ICT4D activities including: ICT policy support and research; access to knowledge, entrepreneurship and innovation; increasing economic and social inclusion; improved delivery of any 161

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development activity, particularly education and health; and, specifically, improving government services. Although views differed and changed over time, the work was grounded in a series of consistent assumptions. Describing some of these helps to make sense of the description of what agencies did. The first assumption was that technology and innovation were capable of making things happen differently: this implicitly criticised how development had been done up to this point. The second assumption was that, freed by liberalisation, business could deliver investments in infrastructure and services, and competition would produce better service levels at lower costs. The third assumption was that access to information and knowledge was power: with better information – whether in the market or for the governance of citizens – more informed, efficient and effective choices would be made. The fourth assumption was about access to knowledge: this would cut through ‘gatekeeping’ barriers in business, media and social interactions.16 Last but not least, the greater transparency of processes would make it harder for corruption to flourish. These assumptions were often illustrated by stories that encapsulated how changes would happen. The story might be of the farmer who saved money by having access to market prices, or the fisher folk who got life-saving advance warning of storms: ‘We tell each other ICT success stories almost as if they were parables for a better life. Often these isolated examples do not measure up to the hype we give them on a day-to-day basis.’ 17 Real-life examples did exist, but these experiences were often more nuanced than the telling of the parable implied. It is impossible to encapsulate the full history of ICT4D in this period without identifying the organisations and initiatives that played a key role. Those focused directly on ICT4D implementation included: HealthNet/ Satellife, Canada’s IDRC and the Acacia Programme (the latter launched in 1996), the Netherlands’ International Institute for Communication and Development (IICD; 1996), USAID (the Leland Initiative in 1996), Geek Corps (2000) and the ITU’s telemedicine project in Mozambique (1998); Schoolnet (2001), WSIS (an ITU initiative, 2003), DfID’s Catalysing Access to ICTs in Africa (CATIA) programme (2003) and the Swedish International 162

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Development Cooperation Agency’s (SIDA) SPIDER (Swedish Program for ICT in Developing Regions) (2004). More policy-focused initiatives included: the Global Knowledge Partnership (1997), G8 Dot force (2000), Bridges.org (probably 2000) and the UN ICT Task Force (2001). The World Bank worked alongside these organisations on liberalisation in the telecoms sector (see Chapters 1 and 2) and related projects. A number of individuals and organisations also worked on connecting Africa to the internet (see Chapter 2). Tech activism was another important strand – this refers to using technology to support physical political activism. Such organisations as GreenNet, Interdoc and Poptel inspired organisations like APC and SANGONeT, the South African NGO Network. This tech activist perspective was part of the formation of SMS text and interactive voice response (IVR) delivery services for development such as Frontline SMS and Freedom Fone. Open source, which provided a practical way of breaking the high costs of software licensing, was also seen as a utopian model for ‘sharing’. In the early 2000s development activists and the organisations they worked with often insisted on its use in their work.18 There was a critique of ‘traditional development’ and its perceived failings on a wider front: ‘The philosophy was IT could be an enabler. We were pretty critical towards development organisations.’ 19 Parts of the often instinctively anti-capitalist development sector signed up to open up communications markets and believed that technology would be the great leveller. At the same time, the private sector began to play a much greater role, both as investors in newly liberalised markets and also as sponsors and partners for ICT4D activities. In the sub-Saharan African context, its virtues were that it was more likely than the state to be efficient; that it could bring in funding – especially for technology – that international donors might not have and had know-how they lacked. Companies involved in these activities included Cisco (its Academy trained many African engineers), Hewlett Packard (under the leadership of Esther Dyson) and Microsoft. One version of the private sector’s motivation is captured by the chair of the G8 Dot Force:20 ‘This is all about self-interest. There is nothing 163

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wrong with self-interest, as long as it is enlightened, long-term selfinterest.’ 21 Some companies, however, were bound by a sharper, shorter-term focus: ‘Private sector programmes were a solution to marketing their technology like Nortel’s PicoNode.22 It wanted to get close to telcos and regulators. What was often billed as several million dollars contribution was actually time in lieu.’ 23 But not all were commercially motivated: ‘Microsoft, for example … It would have been fine to use open source. They set a good example.’ 24 Private sector success in Silicon Valley spawned a range of charitable foundations that played a role, including the Bill and Melinda Gates Foundation,25 which was established in 2000. It began funding ICT4D projects in sub-Saharan Africa in 2005 and also the Omidyar Foundation (launched in 2004), which funded projects at a later point.26 Key ICT4D initiatives The easiest way to illustrate how the development sector in this period took ICT4D on board is through two key players, IDRC and DfID,27 and two important international processes, the G8 Digital Opportunities Task Force and the World Information Summit (WSIS).28 IDRC is important because it was one of the pioneers to commit to this kind of work at an early stage. It started a sub-Saharan African programme in 1997 that lasted until 2010: It sought to empower African communities with the ability to apply ICTs to their own social and economic development. The principal problem [that the programme] sought to address was the increasing digital divide between the continent and the rest of the developed world. With knowledge as the key commodity of the twenty-first century, many feared Africa would be left out of the knowledge revolution much like it had been left out of the industrial one.29

Connectivity Africa and Telecentres.org were subsequently added as further programmes. Telecentres were a way of providing access to computers (and sometimes the internet) in more remote regions:30 ‘They were never

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meant to be commercial.’ 31 Some were successful but others struggled to maintain funding: In a Northern rural province of an African country there is an NGO cybercentre. The huge sign announcing it has been pushed over but people still seem to know where it is. It has not had internet access for over a year. The cost of connectivity went up and it could no longer afford it. A lone child plays games on one of the computers …

By contrast, a local commercial, cyber-cafe was busy.32 One of the key issues undermining their success was the relevance of the available content: ‘The information on the internet was not relevant to rural areas. There was a lack of local content. It was difficult for people like farmers to get adequate agricultural information but it was useful to students for research and to send e-mail.’ 33 At the time of writing, some telecentres are still going, but most were eventually overtaken by wider mobile internet coverage: ‘On a recent telecentre visit [in 2020], all the applications being used were from Facebook. The whole experience of building things themselves and local innovation had been forced out.’ 34 Although it is a research organisation, IDRC talked about ‘impact research’. Two projects give a flavour of how it approached its more applied work: ‘We funded the Uganda Health Information Network and worked with Holly Ladd at SatelLife and HealthNet. We also did rural health information using GSM technology in 2005. It was very forward looking. We were figuring out that mobile phones were more important than internet at the time.’ In policy terms, it funded the first universal communications service strategy in Uganda. On the research side, over fifteen years, it published reflective publications on its own and other work in the field. One major element of the programme was the Research ICT Africa (RIA) network,35 providing detailed work over time about ICT policy issues and regulation and survey work that tracked the use and uptake of ICT at a national level in key countries. Through involving local ‘experts’, it also created a small but influential cadre of Africans who played key roles in their countries’ ICT policy processes, people like

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Venancio Massingue (who was a minister) in Mozambique and ‘Tusu’ Tusubira in Uganda. In the words of one assessment of their programme, ‘it shaped individuals who became ICT champions and moved their country’s ICT agenda forward’.36 The G8 Digital Opportunities Task Force (the G8 DOT Force) was set up in 2000 at a meeting of the G8 in Okinawa. Its founding document put forward a principle of inclusion in which ‘everyone, everywhere should be enabled to participate in and no one should be excluded from the benefits of the global information society’, and reiterated its commitment to closing the digital divide: ‘Protestors marked the occasion by burning computers on the streets … They saw a simple trade-off between computers and development needs. We wanted to gather hard evidence on whether or not that trade-off existed, or whether digital development could play a role in wider development.’ 37 In part to forestall this kind of reaction to its work, the G8 DOT Force adopted a ‘multi-stakeholder approach’: each of the G8 country delegations had representatives from government, the private sector and civil society. The meetings were also attended by two sub-Saharan African Countries – Senegal and South Africa – both of which were champions for the increased use of ICT on the continent. It was pioneering to include civil society. There was a lot of pushback at the time from them: ‘You don’t ever include us.’ So they said OK, let’s try to have everything inclusive and have women … By the time the UK trio got to know each other, we shared an emotional understanding that the problem was important.38

The G8 DOT Force proposed four areas for action: fostering policy, regulatory, and network readiness; improving connectivity, increasing access and lowering costs; building human capacity; and encouraging participation in global e-commerce and other e-networks. It created an informal network of people who continued to work on these issues over the next five years. In practical terms, it gave birth to three initiatives: the Open Knowledge Network (OKN), an African entrepreneurship organisation called Enablis and the Digital Opportunity Initiative.39 Of 166

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these, OKN is the most interesting for the purposes of this chapter, as it sought to create local information that could be distributed digitally. NGOs in each country wrote relevant stories and information (for example, about agriculture) and it used technology to circulate them between different continents. However, the project’s technology challenge was that many of its potential recipients were nowhere near an internet connection. Therefore, it planned to deliver information through satellite signal to radios capable of receiving internet information. It started one of the first SMS jobs services, Kazi 360, which linked people in one Kenya’s low-income neighbourhoods, Kibera, to employers looking for staff. This might be described as a ‘horizontal-knowledge’ approach: ‘Everybody else was talking about top-down market prices to farmers.’ 40 OKN also worked with a Kenyan health organisation called AfriAfya, which was linked to the country’s Flying Doctor system and Arid Lands Information Network, providing information to subsistence farmers: ‘We gave computers, internet links and training.’ 41 OKN closed this African work in 2005. According to one former employee, ‘the whole was nowhere near the sum of the parts’.42 The other international ICT4D process was WSIS, an idea originated by the Tunisian government at an ITU event in 1998. It organised two major gatherings, the first in Geneva in 2003 and the second in Tunis in 2005. The latter was underwritten by the Tunisian government: ‘It was the biggest donation to the process.’ 43 An ITU secretariat managed both events. Contributors included Japan, Germany, France, Finland, Canada, Saudi Arabia, Sweden, Oman and the UAE. Japan’s NTT Docomo was the biggest private sector donor.44 Prior to organising WSIS, the ITU had been the UN body that tackled things like technical standards and the allocation of spectrum. By involving the private sector and civil society in WSIS it opened itself up to more difficult debates: This had both intended and unintended consequences … There was the whole debate about the ITU’s role in opening up the internet space. WSIS was getting requests about human rights issues and around access to the internet and these were uncomfortable issues for the ITU. Some governments wanted freedom of expression issues on the table, others didn’t.45 167

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The culture of the ITU, as a UN organisation, had always been consensusbased and was not used to dealing with political issues that were irreconcilable. WSIS was designed to address the digital divide, which was what the Tunisian government had picked up on: The digital divide was the point that the genie gets out of the bottle. If nervous, we could have put the case for ITU stats on price and access, which is part of what we did. But there were issues like IXPs and the cost of traffic going in and out of Africa. It raised the question: where does the ITU start and stop? How does it evolve? Some didn’t want to evolve, others did. The market and tech were evolving but the institutions had not.46

WSIS’s two events in the early 2000s raised the profile and credibility of ICT4D: ‘When we went to the first WSIS, it was the first time we were taken seriously. The ambassadors there were all thinking we need to know about this. We were one page ahead of them.’ 47 But it was not just ambassadors: fifty heads of state attended during WSIS 1.48 The events highlighted ‘best practice’ and gave prizes to some of the best projects presented. Following WSIS 2, an annual forum was established to track progress on action lines and maintain a community: ‘There was a remarkable level of enthusiasm, particularly showing what people were doing in projects. The ITU provides a platform for multi-stakeholders, NGOs are super-involved. It’s a multi-stakeholder instrument.’ 49 The ITU also enhanced its role in regulatory reform through its Telecommunication Development Bureau. Donors were able to strike funding deals or agree joint programmes of work with the private sector at WSIS: for example, at WSIS 1, IDRC was able to sign up Microsoft to funding its telecentres programme. However, embracing the internet was a double-edged sword for the host of WSIS 2, Tunisia’s then President Zine El Abidine Ben Ali,50 who stated in advance of the gathering that it ‘constitutes a historic opportunity for the international community to agree on a common vision of the Information Society and to develop an approach for action aimed at bridging the digital divide and allowing the advent of an Information Society that is balanced and accessible to all’.51 168

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On the other hand, a report published by IFEX-TMG before WSIS 2 found that Tunisia was blocking … websites, including news and information websites, and [there was] police surveillance of e-mails and Internet cafes. In addition, young people exploring the Web are harassed, arrested, tortured and sentenced to heavy prison terms following unfair trials. More Tunisians have been arrested for expressing themselves on the Internet during the past three years than for views carried by the print media since the country’s independence, 48 years ago.52

The British aid ministry DfID (sometimes branded UK Aid) emerged from the G8 Dot Force process, in which it was heavily involved, with alliances on funding with, among others, Canada’s IDRC and Sweden’s SIDA. DfID’s flagship programme was the ‘experimental’ CATIA, which committed a third of its project funding to ‘to policy focused components’.53 It focused on a trio of stakeholders – civil society, government and the private sector – worked in ten African countries and supported Africans lobbying at such international events as WSIS. Its private sector interventions were designed to improve market competition and to lower prices. It supported a trade association of African ISPs to argue for better regulation (with reports) and to set up IXPs. It funded academic networks that trained regulators and worked with regional regulator associations on various measures that included lowering the cost of VSAT satellite licences. In some of DfID’s target countries – like Kenya – the arguments for policy and regulatory change (see Chapter 2) had become accepted. Alice Munyua, whom CATIA employed to target policy change in six countries, set up Kenya ICT Action Network (KICTANet), which drew in the three stakeholders: ‘It brought everyone together and allowed us to develop a draft ICT policy ourselves.’ 54 Munyua became a board member of the regulator, CCK: ‘We were sharing power with CCK. We also had CEO level participation that was super-effective.’ 55 DfID’s skill was in spotting a strategic opportunities and promoting them jointly with other donors and interested parties. Chapter 4 explains its role in supporting the launch of M-Pesa. It played a similar role in promoting the need for international fibre cables (see Chapter 2), commissioning 169

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and circulating reports that argued why it was important to fund them, how they might be paid for and how they could be structured to avoid monopoly gatekeeping.56 It relied on being fleet-footed and adaptable: ‘We said we don’t know what we’re talking about but we’re looking for answers. We tried to learn quickly, change and be very adaptable.’ 57 It was able to bring civil society and the private sector together: ‘The private sector and civil society began to work together and not see each other as complete aliens.’ 58 When the two groups worked together they were able to create policy that benefited everyone. For all the confidence with which ICT4D advocates made their arguments, those involved in ‘traditional development’ would often say that it was necessary to install standpipes for water or build classrooms first before buying computers or creating access to the internet. The well-practised response to this argument was some version of the following: The problems of the developing world are not one-dimensional … For these countries, it should not be a choice between food, shelter and education on one hand and access to communications technologies on the other. If they get the technology alone, they will go hungry. If they only succeed in feeding and sheltering their citizens without developing an adequate communications infrastructure, then these countries will always be ‘Third World’ as they will never be able to compete fairly with industrialised countries. A holistic approach is needed.59

ICT4D was a new activity and lacked the ‘evidence base’ required to start winning over people to the arguments it was making: [T]here are finite amounts of money, time and attention. Investing these in ICTs means explicitly not investing them in other development areas. Yet the ICT fetishists have so far been unable to demonstrate how ICT-based information represents a more important resource than water, food, land, shelter, production, technology, money, skills, or power in the development process.60

But whatever the ‘evidence base’ was for the value of ICT4D, there were many different versions of vested interest that slowed down support for it. For example, its use in making work processes more efficient 170

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did not appeal to those with a vested interested in keeping ‘things as they were’. As one consultant commissioned to computerise a customs system put it: The project had failed multiple times before … The customs director said to me: do you want to die? If we were to digitise the customs records, we could both get killed. His staff were charging people to release goods from customs. I didn’t experience that in other countries I worked in.61

Another challenge in these early days was that donors and the projects that they supported were conceived ‘top-down’ and were regarded as irrelevant by proposed beneficiaries: You can have the best technology in the world and still do nothing with it … It’s necessary to appropriate the technology. You need to work out how it meets your needs. These are not going to be the same needs it was designed for in the developed world. We have to ask the question: what’s the problem we’re trying to solve? The way donors put ICT into countries is through projects, often separated from broader activities. But the key problem is one of culture. You cannot encourage ICT if it doesn’t become part of the culture. At present, the majority of people in Africa work manually and have no experience of it.62

At the end of 2003, a report questioned whether donors were using ICT4D to address fundamental issues around poverty: the proper approach to harnessing ICTs for development and poverty reduction is to mainstream them as tools of, and subordinate them to, broader strategies and programs for building opportunity and empowering the poor. The results of these efforts are, thus far, inconclusive. This is partly because the international community has not done a good job of monitoring and evaluating its ICT-for-development efforts. Yet it is also because poverty and low growth remain seemingly intractable problems in so many countries, and because ICTs themselves have not proved to be the transformative tools that some had predicted they would be.63

The report focused on the Millennium Development Goals (MDGs), agreed by governments: ‘The measure of such change is progress on the MDGs and broader, sustainable growth, not the increased presence of ICTs.’ Although the report’s author regarded ‘ICTs as one of many important 171

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tools’, its effect was to give the sceptics in donor agencies an opportunity to rein in spending on ICT4D.64 The perception of some in donor agencies was that the growing success of commercial mobile roll-outs was actually doing the ‘heavy lifting’: ‘After WSIS, things began to fall apart a bit. There started to be a sense that with the mobile revolution, all you needed was private sector investment. The president of [Canadian donor agency] CIDA Robert Greenhill said mobiles have solved the ICT issue. There’s no need for a programme in this area.’ 65 The more cynical interpreted this as donors moving on to other, more ‘fashionable things’: ‘The digital divide was the hot thing for a couple of years and [the donors] needed to find the next thing and they moved on.’ 66 Shifting to a greater focus on the MDGs implied three things: ‘encouraging and co-financing ICT applications that will directly benefit the poor, such as (firstly) information points in local community centres and (secondly) by investing in ICT applications in the public sector.’ 67 And thirdly, concentrating on the device used by the poor, the basic mobile phone. ICT4D goes M4D: different acronyms, same hopes With the shift to ‘mainstreaming’, there were three aspects to ICT4D activity in this period: the implementation of public sector applications; more ‘frontline’ M4D activities; and the policy-focused struggles over the financing and building of international cables and their domestic implications (covered in Chapter 2). The challenges of implementing ICT4D applications in the public sector in 2005 cannot be overestimated: someone who worked on a teachers’ SMS information messaging service (SEMA) in Kenya gives a good insight into its readiness at the time. The idea was to pilot a project of ‘blended learning’ for teachers who would then ‘try things out in the classroom’.68 At that point, communications to teachers were sent by post from the ministry to regional offices, who then sent them on to head teachers, who, in turn, communicated with their staff. The whole process took several weeks: ‘There was status and authority associated with this paper 172

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and people hid behind piles of paper.’ 69 To carry out the project, those involved needed to talk to teachers directly: ‘There were a few people from the ministry talking on behalf of teachers. They didn’t want to let us near them.’ Classroom attendances were a key piece of information collected by the ministry: ‘They could have sent in their register [by phone]. They could have stood in class with a phone, but heads wanted to control [this data] because salaries were affected by attendance. They could have done alerts if girls’ attendance fell off. There were issues with forced marriages.’ 70 There were similar issues with making exam results more generally available: ‘We suggested ads in newspapers. You could get parents to check by sending the name by SMS to a database and get an SMS to confirm their results.’ In 2004, South African students were receiving their results this way. In 2007 both Kenyan and Namibian students could get an SMS or look online for their results.71 (There were similar issues with computerising drivers’ licences in Uganda. Even in 2009, drivers were reluctant to bring their pictures for scanning so as to be issued with computerised permits. It was fairly typical for vehicle licence schemes in sub-Saharan Africa to be computerised from about 2010 onwards.) There was no sense in which the piloted SMS project for teacher training would be ‘mainstreamed’ by the ministry: [Government officials in the ministry of education] humoured us if we spent someone else’s money but did not humour us if it involved spending theirs. They chose Nairobi and Mombasa schools [for the pilot] and said: ‘that’s how we maximise our own per diems’. When I asked why that town, it turned out to be in the minister of education’s constituency.72

M4D was used for a wide range of development activities, including: health information (including medicine and appointment reminders), teacher training, drug verification, activism and campaigning, farm produce and fish market prices, literacy (m-novels), incident reporting and mapping and governance feedback (combined with radio shows). International donors and NGOs paid for these services and, in doing so, created new service organisations, like Text to Change: ‘SMS provided 173

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profound one-to-many interactions and reached into rural areas, in a way that previously only radio could.’ 73 An analysis of thirty-six M4D projects was presented at the Mobile Active event in Johannesburg in 2008. Although these were not exclusively African activities, they provide a good ‘snapshot’ of M4D and its challenges at the time. Of those reviewed, ‘18 projects were accessible to any handset; the others had hardware or application constraints requiring fancier phones.’ The report’s authors went on to identify a series of technical constraints affecting different types of phones.74 The transition to a wider digital palette From 2010 onwards, the changes described in Chapters 2, 4 and 8 would transform how ICT4D was carried out in sub-Saharan Africa. These included the use of mobile money, more mobile internet subscribers and innovation promoted by a start-up ecosystem supported by international donors: ‘[Before 2010] the infrastructure just wasn’t there and that was a huge bottleneck that stopped innovation.’ 75 One example of how ICT4D went ‘mainstream’ is the way m-health found wider acceptance. Three years after the initial discussions about mainstreaming ICT4D, a Rockefeller Foundation mHealth conference, involving NGOs, donors and the private sector. One attendee remembered: ‘There were thirty people, swapping ideas and there were one or two people from Africa.’ 76 Two years after that conference: ‘The medics turned up to the annual mHealth conference. Their message was cool gadgets, so what? As a sector we had to learn randomised control trials (a research methodology that started in the health sector).’ 77 By 2012, the private sector78 was beginning to turn up in larger numbers to the annual mHealth conference: ‘The “suits” could smell money but they didn’t know how to do it. There were people like health insurers and private hospitals. They thought there must be billions of dollars here. The GSMA got involved and half the sessions were about Return On Investment and Average Revenue Per User.’ 79

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Two years later, in 2014, governments started to show an interest: Every project was a world first. People got off on using words like disruptive tech and innovation. The Departments of Health were bureaucracies and not into those words. They were tremendously risk averse and all they could see was flaky risk. Then mHealth started to get evidence and then get traction. We had happily been spending donor and foundation money. When the Governments started to turn up, they said ‘you can do it in five clinics, can you do it in 5,000?’ We had to learn about large-scale health systems.80

The Ebola pandemic in West Africa in 2013 reinforced the need for better collection of health information. Finally, mHealth was embraced by the World Health Organization (WHO): In 2017 and 2018, the WHO started showing up.81 It was a valid part of the health system. It said it was OK for health bureaucracies to spend large sums of money on m-health. The job was then to make it become boring. It helps with data collection, supply chains and communications for behaviour change.82

At the beginning of this transition, down ‘on the ground’ in Uganda, something remarkable was happening. On 12 January 2012 Dr Jane Ruth Aceng, director-general of health services in the ministry of health announced a moratorium on e-health initiatives in the country, unless they had ministry approval and were interoperable with the ministry’s health information system. The country’s e-health strategy summarised what had gone wrong: Many of the existing eHealth Services are development partner funded projects and have tended to be proof-of-concept pilots, where ICT is introduced (or imported) to demonstrate innovative use of technology in a limited context and they lack local ownership, support and funding for roll-out. They often stall when the development partner funding is ended. The projects also fail due to the sustainability in terms of the supporting infrastructure such as affordable and reliable power, connectivity etc.; maintenance, hosting options, etc.83

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There were no common standards for collecting health information and no unique identifiers for health records. Several innovation hubs and hackathon challenges had produced too many duplicated projects. The moratorium resulted in the national implementation of mTrac (along with a handful of other applications) for disease surveillance and a toll-free ‘anonymous health service delivery’ SMS hotline, which could be used by anyone to report on health service issues, including health worker absenteeism, fraud, extortion, assault and theft of medicines.84 mTrac was developed by UNICEF Innovation using its SMS service RapidSMS.85 Its value was ‘underscored by the fact that the Ugandan government has decided to take responsibility for continuing and funding the program’ 86 (emphasis added). But although the technology has enabled better disease surveillance and overall management, the scale of the service shortfall remains enormous: ‘Client expectations are not being met in 90% of districts and [the health] service is generally seen as poor across all districts.’ 87 ICT4D becomes embedded in donor programmes A 2015 DfID review of digital in its development programme found significant investments in using digital in our programming across virtually all sectors. There is currently no way of confirming absolute numbers of programmes, although based on previous research, numbers of programmes passing through digital spend controls and interviews held as part of the review[. W]e estimate DfID is currently funding well over 160 programmes, which are either wholly or have some significant digital element.88

DfID was counting outputs rather than outcomes. It concluded that ‘digital technologies can add value to our development interventions to help us reach greater numbers of poor and marginalised people more quickly and cost-effectively’.89 At that time, DfID’s projects range[d] from major investment in programmes where digital is intrinsic to success such as Making All Voices Count or further rollouts of M-Pesa-type models; to smaller projects which are part of a bigger 176

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programme, or funded via Challenge Funds. The latter might include SMS, biometrics, smartcards or geomapping to deliver a small part of a wideranging programme.90

However, it acknowledged that ‘the evidence base is patchy and more work needs to be done … Digital is prevalent across sectors such as mHealth, mNutrition, education and humanitarian, but there are coordination and scale-up issues.’ The review identified over 1,800 M4D applications and services in the developing world, ‘yet co-ordination between these initiatives remains limited’.91 With the wider use of ICT4D, another key understanding emerged among policy makers in 2016. Having helped to get the fibre infrastructure for Africa in place, the World Bank turned its attention to the digital transformation using this infrastructure. But it also acknowledged that digital transformation would not be the only solution to deep-seated development challenges: In many instances digital technologies have boosted growth, expanded opportunities, and improved service delivery. Yet their aggregate impact has fallen short and is unevenly distributed. For digital technologies to benefit everyone everywhere requires closing the remaining digital divide, especially in internet access. But greater digital adoption will not be enough. To get the most out of the digital revolution, countries also need to work on the ‘analog complements’ – by strengthening regulations that ensure competition among businesses, by adapting workers’ skills to the demands of the new economy, and by ensuring that institutions are accountable.92

There is increasing interest among donors in using grant funding in more catalytic ways. They ask ‘what is the next M-Pesa going to be?’, in much the same way that venture capital funds sometimes ask who will be Africa’s next Mark Zuckerberg will be. The ‘holy grail’ is to create systemic changes in tackling development challenges. M-Pesa was developed from a challenge fund of the kind DfID first launched in 1999. Such funds were used to encourage new ideas and did not always focus on technology. They involved funds, prizes and development capital. Examples included the GSMA Innovation Fund and the Boston-based Catalyst Fund. The former has had a number of different focuses since 2013. Sub-Saharan 177

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African grantees have included Eneza (edtech), MaTontine (loans), Sudapay (payments), Farmcrowdy (agriculture), Gifted Mom (maternal and infant health) and Safemotos (transport). In 2020, the Catalyst Fund received US$12.9 million to connect thirty fintech organisations across Kenya, Nigeria, South Africa, Mexico and India to international investors and mentors. A more recent fund is the Assistive Tech Impact Fund, which will ‘contribute towards a thriving Assistive Tech ecosystem’.93 The two key shifts have been, firstly, away from grants and toward a wider range of financial approaches, including loans and equity, and secondly, that funders are taking a more strategic view of how to support long-term scaling up. An explosion of technologies is providing new challenges for funders: which are relevant for development objectives? In 2016 DfID created Frontier Technology to look at how 3D printing, Internet of Things, drones and other newer technologies can positively impact development challenges.’ 94 It provides grants of up to £100,000 to pilot new solutions and it match-makes ministry staff and their challenges with innovators and entrepreneurs. Long-term challenges for ICT4D in Africa The final section of this chapter looks at learning and agriculture, both of which pose continuing challenges for the use of ICT4D. The treatment of these topics is not definitive but is designed to highlight issues faced when technologies are used to tackle long-term development challenges with technologies. Adding something to the process of learning Early tech evangelists argued that tech by itself was a magic ingredient and produced change in learning and education outcomes. Two people stand out as presenting the purest version of these arguments: Sugata Mitra95 and Nicolas Negroponte.96 Mitra’s Hole in the Wall project put computers in holes in the wall in India and encouraged children to play 178

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with them to see how they worked. It drew on ideas of self-directed learning pioneered by Seymour Papert.97 Negroponte’s XO laptop has been described as bringing children ‘[a] means to freedom and empowerment’.98 The key challenge for classroom use of technology was the cost of providing it to each student. So the XO laptop was one of a long line of hardware devices designed to be priced for use in poor countries, of the kind found in sub-Saharan Africa99 In 2000 Britain’s then prime minister, Tony Blair, felt that something should be done about development and that technology would be a good approach. Education was a national priority, so why not use tech to help kids? The cost of providing classroom computers moved it in a different direction. According to UK government adviser Owen Barder: I was tasked with figuring out what that would be like. The consensus among the ‘educationistas’ was that the evidence was not good for using tech to support learners. So even if you could make it cost-effective, they were saying don’t do that. It would be a better idea to train teachers and that could have a big effect.100

The new project was called the Imfundo Initiative and it included private sector partnerships,101 which was partly to show that the governing party, New Labour, was not just about the public sector; so, in a pragmatic way it was tactical, political ‘positioning’. ‘It was very unlike the ways in which DfID used to work: it was overtly trying to do development in a different way. One of DfID’s senior education advisers said at the time that ‘it’s more important to get paper and pencils into the classroom.’’ 102 Imfundo established forty international partnerships in eight African countries by 2003 and sought to work with local organisations alongside its partners to implement relevant technological interventions ranging from developing an open source education management information system for Africa, to creating a facility where children at risk of living on the streets could use computers to gain access to learning resources in a local language. Tim Unwin, who led the initiative between 2001 and 2004, reflected that it may have been too far removed from DfID’s mainstream 179

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priorities at the time to be of lasting success. Some people, though, did really value its work, as reflected in the following comment: ‘Its strategic partnership approach and transparent, participative, networking processes are excellent, as is direct involvement of Imfundo with relevant expertise. Most other donors don’t work like this.’ 103 The first major initiative to get computers into African classrooms for the benefit of pupils was SchoolNet Africa, in 2001: The hypothesis was that if you set up a Schoolnet, either in ministries or independently, you would be able to create a wide range of access models: computer labs in schools, schools based around telecentres and refurbished computers … We were also looking at low-cost PCs like handheld devices and low-cost Indian computers … There was a Pan African network of champions. It captured the imagination of people across the continent.104

The initiative was fighting on several fronts simultaneously. It ran a campaign to put one million computers in schools; was seeking to make internet connectivity affordable through advocating a special rate for education (e-Rates); was developing teachers’ skills for using ICTs; was directly delivering computers into classrooms; and was providing a PanAfrican Knowledge Warehouse for teachers and learners, which had professional education development content for teachers. Support from funders such IDRC and the Open Society Institute of South Africa enabled it to establish ‘Internet for Schools’ projects, targeting ten schools in Mozambique with eleven computers that had e-mail and internet connectivity, content and courseware development. In Senegal, it set up twelve cyber youth clubs in schools. The sheer scale of resources required even for relatively modest demonstration projects made it hard to implement this classroom approach: ‘It was very ambitious to think we could network all schools across the continent and lobby for all school-going children and children out of school. We were highly dependent on donor funds.’ 105 Some parts of the network flourished better than others before it closed down in 2009: ‘Government started to run programmes. Everyone now has a standalone

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programme in this area but the ground was laid by SchoolNet.’ 106 But even with computers in the classroom, there was no guarantee that they would be well used: ‘Opening computer labs was often a photo opportunity and they were very under-utilised.’ 107 In the 2013 the debate about laptops in classrooms was reignited in Kenya when the winning presidential candidate, Uhuru Kenyatta, promised to put 1.3 million laptops into the hands of all first-year primary school students. When the initiative came to be implemented, there were discussions about whether money of this kind could be better spent on buying basic facilities like desks for worse-off schools.108 Arguments around this highlighted the continuing lack of infrastructure – particularly in many, but not all, rural schools – and teachers’ fear of the technologies. The first tendering process was struck down by the courts because of the ‘leaking of tender specifications’ to a select company by government officials. 109 In the second round of bidding, the government specified tablets rather than laptops, except for teachers. The bid was won by two separate consortia, both partnerships of local universities (Moi University and Jomo Kenyatta University of Agriculture and Technology) and private companies (Brazilian and Portuguese computer manufacturers). Five years after it was announced, a 2018 report to Parliament claimed that 983,271 tablets and 47,902 laptops had been delivered to 19,565 schools. Despite the time and cost involved, no clear evidence has emerged of how educational performance was changed. An academic study of tablet use in the Kenyan Primary Math and Reading Initiative found ‘gains in student learning outcomes … but significant differences in cost per student’.110 In other words, computers in the classroom are expensive, compared to face-to-face teaching. In July 2014 a DfID-funded project, iMlango, used satellite connectivity for a project that targeted 56,561 girls in 205 primary schools across rural Kenya. It focused on maths tutoring and literacy and life skills and included electronic attendance monitoring. Significantly, technical maintenance for the classroom computers was provided. The proposition was that ‘technological capabilities’ could be used ‘to deliver improved educational outcomes and life skills for marginalised girls and students more generally’.

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It was monitored using four different groups in a randomised controlled trial. Although there were some issues with the sample sizes, the Endline Report concluded: ‘While the project has delivered positive impacts at the output level, these unfortunately haven’t been demonstrated at the outcome level … the evidence does not demonstrate improved learning.’ 111 A key obstacle was the paucity of equipment: ‘securing significant time on task per girl was a challenge due to large school size and limited numbers of computers available in the lab’.112 As yet, there is only mixed evidence of improved learning outcomes based on larger-scale roll-outs of laptops and computers across sub-Saharan Africa. There remains a difficult underlying problem in the sub-Saharan African classroom: teachers see educating their pupils as carrying out ‘mindnumbing rote learning’.113 A World Bank report identified learning programmes that are overloaded with content to be learnt by heart.114 Tanzanian edtech social enterprise Ubongo, launched in response to what it saw as Africa’s education crisis, identified other barriers: Schools are overcrowded. Teachers are undertrained and the quality of education is struggling to keep up with population growth. Technology is a useful tool to fill these gaps but it’s not a tablet for every child. We use radio, TV and SMS, IVR and Android apps on mobile and we can do something like interactive learning … TV and radio are not interactive. We also have print books. We want the child trying to get the phone from their parent to send a message [to us].115

Drawing on work pioneered by Mediae116 and Soul City,117 Ubongo chose to support learning in a different way, by making curriculum learning a more exciting prospect: ‘We want to bring the joy of learning into classrooms. It’s still not exciting. How can we make it more exciting? We use entertainment content to support this objective. We want to promote creativity in teacher training.’ 118 Ubongo produces lively animated programmes voiced in the local languages of eighteen African countries: ‘If we could do it in Swahili, the local language in Tanzania, it would work elsewhere … We are creating localised, story-based learning … Kids can learn, anytime, anywhere. We have made content really easily downloadable because of COVID-19.’ 119 182

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In Tanzania, where Ubongo started, it has a radio audience of around 1.7 million. Its television audience of 2.4 million enjoys mobile-supported interactive engagement (around 200,000 interactions a month) which allows students and parents to ask questions and download materials. Its apps have been downloaded between ten and one hundred thousand times: ‘Over time, what we do reaches seventeen million households [in Tanzania].’ 120 Organisations like Ubongo may not be the answer to improving education in Africa but they are perhaps an answer; parents learning with children, giving agency to the process. Agtech: the slow process of delivering changes to small plot agriculture The first phase of agtech applications in sub-Saharan Africa started in 2001, with Senegalese start-up Manobi launching (in a joint venture with Orange) its agricultural information system.121 A wave of pioneers followed elsewhere in sub-Saharan Africa over the next couple of years, including eSoko (then named TradeNet) in Ghana. Those efforts were supported by such organisations as the Dutch IICD and USAID: ‘At IICD, there were projects where you could not establish a business case. If I do something, will there be new financial flows involved? Price information and market settings … never worked.’ 122 The phases described here are simplified and sometimes overlap with each other. Like the development of e-health described earlier, the agricultural transition to increased use of digital processes has taken nearly two decades. First-generation agtech applications were based on a simple and persuasive assumption. If individual (smallholder) farmers had timely information about the market sale price of their crops, they would be able to get better prices for their produce. Better information would allow markets to operate more effectively. In the early years, some evidence was produced showing that this had been achieved. However, it was not always sustained.123 A second strand of information provided to farmers was about how to improve the growing of their crops. This constituted an attempt to deliver farming information more effectively, often alongside 183

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or in parallel to government-run agricultural extension services. Nearly all these early services described themselves as ‘pilots’, and for several years they rarely reached more than ten thousand farmers in any one country. By definition, the services were limited by the way they were delivered. While many services had web pages, the key delivery tool was nearly always a basic phone using USSD (Unstructured Supplementary Service Data)124 menus and SMS. The limit on characters in SMS messages severely limited what could be communicated. Other barriers also prevented uptake of SMS-based services, including: literacy, language spoken, lack of familiarity with technology, income and the absence of mobile coverage.125 Mark Davies, founder of eSoko noted that ‘[W]hen we started years ago, we thought that if we could just deliver prices to farmers, we’d have succeeded. And we did do that, but along the way we learned lessons – and changed our business model time and time again.’ 126 The second phase of agtech applications started from 2010 onwards and was driven by changes in access to technology and a greater understanding of farming. Social media offered new channels for information sharing: for example, by 2020 the Kenyan Dairy Farmers Forum on Facebook had 237,200 members.127 Mobile money offered new avenues for service development: financial services including loans, crop insurance and subsidy payments could now be delivered relatively easily to farmers. But farmers having access to digital money on a phone is only useful in many rural areas if it can be converted into cash: local merchants do not accept mobile money payments in a digital form.128 In terms of understanding smallholding agriculture, there was a shift from services and platforms aimed at individual farmers to value-chain systems with transactions at all points it. Target users included warehouse owners, informal retail outlets and large agricultural buyers.129 For example, a 2018 GSMA-initiated scheme with DfID funding (delivered by a partnership between MTN and Royal Commodities in Ghana) addressed a cocoa value chain. It was predicated on the assumption that a combination of SMS messaging and mobile money services to larger agricultural buyers would help to support rural mobile coverage, reduce transaction costs

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(as against cash) and give farmers faster payment and potential loan support.130 The third phase of agtech applications development saw potential technologies and the information they could deliver explode, often running ahead of farmers’ ability to use them. Satellite providers – in both the public and private sectors – can provide near real-time weather data, and are now generating high-resolution field information that can, for example, measure water levels. Hovering above fields, drones can pinpoint even more detail of what is happening in individual plots. Cheap Internet of Things sensors can send information directly from within the field itself. What is collected covers more elements of farming information and is available more quickly than in the past. Between 2012 and 2018, the number of African farmers reached by agtech applications had increased, along with the number of applications. Over this period, the number of applications available has grown from 42 to 390. The proportion of farmers using agricultural applications in Africa has been growing at about 44% per annum, with about thirty-three million registered users in 2018. But, based on these self-reported figures, only 15–30% can be described as active users: ‘It does not mean farmers are actually using the services but they do receive information.’ 131 Only a few agricultural applications services reach one million plus registered users: the top twenty, each with more than four hundred thousand registered users, account for 78% of total reach.132 A 2018 Geopoll survey of Kenyan farmers (according to a sample skewed to younger respondents) suggests how a potentially more ‘digital native’ group of farmers might use these services. Eighty-five per cent had phones, of whom 38% had Android phones and 47% basic phones (voice and SMS only). Forty-six per cent used their phones to access mobile money lending services and only 15% used their phones to access farming apps and websites. On the face of it, borrowing money appears to be more popular than seeking advice on how to make more money from farming. Across all age ranges, digital channels were less likely to be used for agricultural advice than traditional media and speaking to other farmers.133

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An academic review of the use of agtech applications in Uganda in 2019 noted the continuing challenges to successful implementation of digital apps, including the slow pace of adoption: It was observed that a majority (109 out of 183) of the innovations are at ideation stage largely focusing on smallholder farmer information management needs as a means of complementing extension service delivery … of [the] profile of innovators, [the] majority are students in higher institutions of learning followed by fresh graduates. It emerged from the study that [a] majority of users (nearly 85%) of these innovations are smallholder farmers. We also note a few agro processors and logistic dealers are adopting ICT4Agriculture for effective process management.134

In both development cases reviewed above – education and agriculture – it has taken twenty years to get to the point where wider take-up is a possibility, both from end-users and within government. In neither case is it yet clear what kinds of effectiveness will be ushered in, or how these will provide financially sustainable options for the future. As yet, it is hard to see where there have been systemic changes. Moreover, many of the factors that might produce such changes are not, in the first instance, technology related. It is difficult to make digital transformations that are not simultaneously reliant on increasing incomes, cultures changing themselves from within and, often, reforming other aspects of how a society runs itself. Nevertheless, the growing use of different technologies in development has offered opportunities for efficiencies and better services, but evidence has sometimes been elusive, particularly over a three- to five-year period. Despite the rhetorics that accompany it, innovation has rarely produced sudden breakthroughs. The widespread adoption of Facebook in Africa did not require capacity-building workshops, but what people want and what they might need are two very different things. Notes 1 Author interview, Joe Simmonds, formerly of NetHope, 27 July 2020. 2 Author interview, Joe Simmonds, 27 July 2020. 3 Ibid. 4 ‘Presentation of DadaabNet Project Report’, Nethope (March 2014). 186

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Sprinkling on the magic dust 5 Lynda Kigera, Save the Children, in ‘Presentation of DadaabNet Project Report’. 6 Author interview, Joe Simmonds, formerly of NetHope, 27 July 2020. 7 Jacqueline Strecker, the Learn Lab Manager at UNHCR Innovation Source, www.unhcr.org/uk/news/stories/2017/3/58c283da4/innovation-transformseducation-refugee-students-africa.html (accessed 7 December 2021). 8 ILO, Doing Business in Dadaab – Market Systems Analysis for Local Economic Development in Dadaab, Kenya (ILO, 2019). 9 Ibid. 10 Quotes taken from A.D. Burhardt, N. Krause and M.C. Rivas, Critical Success Factors for the Implementation and Adoption of E-learning for Junior Health Care Workers in Dadaab Refugee Camp Kenya (Human Resources Health, 2019, 17:98), https://human-resources-health.biomedcentral.com/articles/10.1186/ s12960-019-0435-8 (accessed 7 December 2021). 11 E-mail, 9 February 2021, Rich Fuchs, IDRC. 12 D. Souter, ‘Inside the information society: a short history of ICT4D’, APC Blog (7 November 2016), www.apc.org/en/blog/inside-information-societyshort-history-ict4d (accessed 7 December 2021). 13 www.itu.int/en/history/Pages/MaitlandReport.aspx (accessed 7 December 2021). See also G. Milward-Oliver (ed.), Maitland+20: Fixing the Missing Link (Amina Centre, 2005). 14 The World Bank formed a Global Information Infrastructure Commission (GIIC) in February 1995 that has met annually since then. The first full meeting of the GIIC took place in Washington in July 1995. GIIC was designed to facilitate cooperation between governments and the private sector in order ‘to foster private sector leadership’. 15 R.J. Saunders, J.J. Warford and B. Wellennius, Telecommunications and Economic Development (World Bank, 1st edn 1983), p. 17. Quote taken from later, 1996 edition. 16 ‘Africa’s digital divide initiatives – time for a reality check,’ Balancing Act’s News Update 180 (7 May 2004), www.balancingact-africa.com/news/telecomsen/9326/africas-digital-divide-initiatives-time-for-a-reality-check-an-off-therecord-briefing (accessed 7 December 2021). 17 Ibid. 18 For a summary of this issue see M. Bruggink, Open Source in Africa – Towards Informed Decision Making (IICD, 2003), https://core.ac.uk/download/ pdf/48027535.pdf (accessed 7 December 2021). 19 Author interview, Arjan de Jager, formerly of IICD, 6 July 2020. 20 Vernon Ellis, international chair of Andersen Consulting, now Accenture. 21 ‘Africa and the digital divide – three clouds don’t make a rainy season’, Balancing Act’s News Update 20 (5 May 2000), www.balancingact-africa.com/ news/telecoms-en/47393/africa-and-the-digital-divide-three-clouds-dontmake-a-rainy-season (accessed 7 December 2021). 187

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Technology influences 22 ‘PicoNode – the modular, cost-effective and profitable GSM network system for Africa’, ItWeb (30 November 1998), www.itweb.co.za/content/ Kjlyr7wdZZzMk6am (accessed 7 December 2021). 23 Author interview, Laurent Elder, 30 July 2020. 24 Author interview, Rich Fuchs, 14 July 2020. 25 The Bill and Melinda Gates Foundation’s Internet into Libraries programme put funding into Botswana with a programme called Segiso. 26 P. Valleley, Philanthropy from Aristotle to Zuckerberg (Bloomsbury Continuum, 2020) provides an outline of issues around philanthropy capitalism. 27 The UK’s DfID was merged with the Foreign and Commonwealth Office in 2020. 28 World Summit on the Information Society. 29 L. Elder, H. Emdon, R. Fuchs and B. Petrazzini, Connecting ICTs to Development – The IDRC Experience (Anthem Press, 2013), p. 3. 30 It funded them in Mozambique, Uganda and South Africa. 31 Author interview, Rich Fuchs, 14 July 2020. 32 ‘Africa and the Digital Divide’. 33 Author interview, Ken Lohento, 29 August 2020. 34 Author interview, Rich Fuchs, 14 July 2020. 35 https://researchictafrica.net/ (accessed 7 December 2021). 36 S. Batchelor, N. Hafkin and A. Chéneau-Loquay, PI External Reviews: Summary of Report Acacia II (IDRC, 2005), p. 2. 37 ‘Vernon Ellis of Accenture on Africa’s digital opportunities’, Balancing Act’s News Update 68 (20 April 2001), www.balancingact-africa.com/news/ telecoms-en/47440/vernon-ellis-of-accenture-on-africas-digital-opportunities (accessed 7 December 2021). 38 Author interview, Anuradha Vittachi, UK CSO representative, 25 June 2020. 39 Accenture was a partner for all three, and Hewlett Packard and Telesystem for Enablis and the Markle Foundation underwrote the Digital Opportunity Initiative. 40 Author interview, Anuradha Vittachi, 25 June 2020. 41 Author interview, Peter Benjamin, formerly of OKN, 29 June 2020. 42 Ibid. 43 Author interview, Christopher Clark, formerly of WSIS Secretariat. 44 A company with no interests in sub-Saharan Africa until it bought Dimension Data in 2010. 45 Author interview, Christopher Clark, 11 June 2020. 46 Ibid. 47 Author interview, David Woolnough, DfID, 23 July 2020. 48 Author interview, Christopher Clark, 11 June 2020. 49 Ibid. 50 In 2011 he fled Tunisia in response to protests that formed part of the Arab Spring. 188

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Sprinkling on the magic dust 51 ‘WSIS host Tunisia guilty of denying access to information by filtering internet’, Balancing Act’s News Update 260 (14 May 2005), www.balancingact-africa.com/ news/telecoms-en/7086/wsis-host-tunisia-guilty-of-denying-access-toinformation-by-filtering-internet (accessed 7 December 2021). 52 Ibid. 53 S. Batchelor, Team Leader, Independent Assessment of CATIA (Catalyzing Access to ICTs in Africa) Final Report for Catia (Gamos/Big World, V3 August 2006). 54 Author interview, Alice Munyua, 24 July 2020. 55 A different but equally effective precursor organisation was Uganda’s WOUGNET, which has focused on women and ICT issues, founded by Dorothy Okello. 56 Declaration of interest: the author was closely involved in this work. 57 Author interview, David Woolnough, 11 June 2020. 58 Ibid. 59 Kathy Foley, Nua Internet Surveys, quoted in ‘Africa and the digital divide’. 60 R. Heeks (1999) quoted in J. Grace, C. Kenny, J. Liu, T. Reynolds C. ZhenWei Qiang, Information and Communication Technologies and Broad-Based Development – A Partial Review of the Evidence (World Bank, 2004), p. 3. 61 Author interview, Ethan Zuckerman, formerly of Geek Corps, 26 June 2020. 62 ‘People special: interview with Sylvestre Ouedraogo, Yam Pukri’, Balancing Act’s News Update 202 (3 May 2004), www.balancingact-africa.com/news/ telecoms-en/8834/people-special-an-interview-with-sylvestre-ouedraogoyam-pukri (accessed 7 December 2021). 63 K.S. McNamara, Information Communication Technologies, Poverty and Development: Learning from Experience (infoDev, 2003).pp. 11, 17 and 18. 64 Sadly, it is ‘difficult, if not impossible to produce a figure’. Financing ICTs for Development – Efforts of DAC Members (OECD, 2005), p. 27. 65 Author interview, Laurent Elder, 30 July 2020. 66 Author interview, Philip Schmidt, formerly of Bridges.org, 4 August 2020. 67 McNamara, Information Communication Technologies, pp. 76–79. 68 Author interview, John Traxler, 7 July 2020. 69 Ibid. 70 Ibid. 71 See Balancing Act’s News Update 193, 336 and 337, www.balancingact-africa.com/ news/archive/telecoms-en (accessed 7 December 2021). 72 Author interview, John Traxler, 7 July 2020. 73 Author interview, Steve Song, 5 June 2020. 74 J. Donner, K. Toyama and K. Verclas, Reflections on MobileActive 2008 and the M4D Landscape (Microsoft Research, 2008) 75 Author interview, Anriette Esterhuysen, 1 June 2020. 76 Author interview Peter Benjamin, 29 June 2020. 77 Ibid. 189

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Technology influences 78 An African example: video interview, Sylvain Beletre (in French) ‘E-santé en Afrique: la stratégie d’Orange – Hervé Algrin et Marc Ricau’, May 2011, www.youtube.com/watch?v=FmzvJ-9s6dU (accessed 7 December 2021). 79 Author interview Peter Benjamin, 29 June 2020 80 Ibid. 81 It started with Garrett Mehl, WHO scientist who is now unit head of Digital Health Technology in the Digital Health and Innovation Department of WHO. 82 Author interview Peter Benjamin, 29 June 2020. 83 Uganda National e-Health Policy (Ministry of Health, 2016) p. 20. 84 S. Blaschke, F. Huang and H. Lucas, ‘Beyond pilotitis: taking digital health interventions to the national level in China and Uganda’, Global Health 13, 49 (2017), https://doi.org/10.1186/s12992-017-0275-z (accessed 7 December 2021). 85 UNICEF Innovation developed RapidSMS in 2007. UNHCR launched a Humanitarian Education Accelerator as part of Learn Lab in 2015. 86 H. Dahmm and J. Espey, ‘Data sharing via SMS strengthens Uganda’s health system’, Trends (27 September 2017), www.sdsntrends.org/research/2018/9/27/ case-study-mtrac-sms-health-uganda?locale=en#read (accessed 7 December 2021). 87 Annual Health Sector Performance Report (Ministry of Health, Financial Year 2018/19), p. 23. 88 DfID Review of Digital in Development Programmes (DfID, 2015), p. 3, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/ attachment_data/file/417521/Review-Digital-Programmes-Feb2015.pdf (accessed 7 December 2021). 89 Ibid., p. 2. 90 Ibid., p. 3. 91 Ibid., p. 9. 92 D. Mishra and U. Deichmann (eds), Digital Dividends – Overview, World Development Report 2016 (World Bank), p. 2. 93 www.atimpactfund.com/ (accessed 7 December 2021). 94 See www.ideastoimpact.net/frontier-technology-livestreaming (accessed 7 December 2021). 95 S. Mitra, The Hole in The Wall – Self-Organizing Systems in Education (ALTC, 2010), http://repository.alt.ac.uk/855/ (accessed 7 December 2021). For a critique see D. Clark, ‘Sugata Mitra: slum chic? 7 reasons for doubt’, Donald Clark Plan B blog (4 March 2013), http://donaldclarkplanb.blogspot.com/ 2013/03/sugata-mitra-slum-chic-7-reasons-for.html (accessed 7 December 2021). 96 N. Negroponte, Being Digital (1995, Knopf). 97 S. Papert, Mindstorms: Children, Computers and Powerful Ideas (1980, republished 1993, Basic Books). 190

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Sprinkling on the magic dust 98 B.M. Hill, ‘What we mean by open: software freedom and OLPC’, One Laptop Per Child (n.d.), http://blog.laptop.org/what-we-mean-by-open-softwarefreedom-and-olpc/#.X1JjqNZ7nxg (accessed 7 December 2021). 99 Including Joris Komen’s Library Pi, Mark Bennett’s ZEduPad, Kristine Pearson’s Lifeplayer, Worldreader’s early use of Kindles and BRCK in its consumer and education versions. 100 Author interview, Owen Barder, 17 February 2021. 101 Including Cisco, Marconi, Unisys (who later dropped out) and Virgin. 102 Author interview, Tim Unwin, 4 June 2020. 103 E-mail, 12 May 2021, Tim Unwin. 104 Author interview, Shafika Isaacs, 25 August 2020. 105 Ibid. 106 Ibid. 107 Ibid. 108 For a useful rehearsal of the arguments see E. Igunza, ‘Laptops v desks in Kenya’s schools’, BBC News (3 March 2016), www.bbc.co.uk/news/av/ world-africa-35715673 (accessed 7 December 2021). 109 A. Oduor, ‘Jubilee laptops project that failed Kenyan child’, The Standard (28 April 2020), www.standardmedia.co.ke/the-standard-insider/article/ 2001369323/jubilee-laptops-project-that-failed-kenyan-child#_=_ (accessed 7 December 2021). 110 B. Hassler, S. Hennesey and L. Major, ‘Tablet use in schools: a critical review of evidence for learning outcomes’, Journal of Computer Assisted Learning (June 2015), www.repository.cam.ac.uk/handle/1810/248609 (accessed 7 December 2021). 111 Advantech Consulting, iMlango Endline Report (DfID, May 2017), p. 10. 112 Ibid., p. 10. 113 K. Watkins, ‘Narrowing Africa’s education deficit’, Brookings Institute (18 December 2012), www.brookings.edu/research/narrowing-africas-educationdeficit/ (accessed 7 December 2021). 114 S. Bashir, M. Lockheed, E. Ninan and J-P. Tan, Facing Forward, Schooling for Learning in Africa (AFD and World Bank, 2018). 115 Author interview, Doreen Kessy and Nisha Ligon, 30 July 2020. 116 https://mediae.org/ (accessed 7 December 2021). 117 www.soulcity.org.za/ (accessed 7 December 2021). 118 Author interview, Doreen Kessy and Nisha Ligon, 30 July 2020. 119 Ibid. 120 Ibid. 121 ‘Agro-info special – helping producers make money from digital information’, Balancing Act’s News Update 142 (14 July 2003), www.balancingact-africa.com/ news/telecoms-en/9997/agric-info-special-helping-producers-make-moneyfrom-digital-information (accessed 7 December 2021). 122 Author interview, Nic Moens, 8 July 2020. 191

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Technology influences 123 One positive review: P. Courtois and J. Subservie, ‘Farmer bargaining power and market information services’, American Journal of Agricultural Economics 22 (June 2014), https://onlinelibrary.wiley.com/doi/abs/10.1093/ ajae/aau051 (accessed 7 December 2021). For an example of a less positive and more nuanced view, see G. Bahiigwa and G. Tadesse, ‘Mobile phones and farmers’ marketing decisions in Ethiopia’, World Development 68 (April 2015), www.sciencedirect.com/science/article/pii/S0305750X14004082 (accessed 7 December 2021). 124 USSD is a GSM communication technology that is used to send text between a mobile phone and an application program in the network. Applications may include pre-paid roaming or mobile chatting. 125 One of the factors focused on in the report Future of Food, Harnessing Digital Technologies to Improve Food System Outcomes (World Bank, July 2019). 126 J.A. Adegbesan, R. Coffey, F. Giwa and R. Narsalay, Empowering Low-income Farmers with Real-time Market Data (Accenture, 2012) p. 3. 127 Accessed 13 September 2021. 128 For example, the experience of Cellulant’s e-wallet in Nigeria suggests that farmers prefer to cash out immediately rather than hold their money in a mobile wallet. In other words, much m-money activity is really analogue cash transfer and not really use of digital payment. 129 A 2017 World Bank study of start-ups in Kenya found that by 2015 all agtech start-ups had shifted to a B2B model. See M. Dawes, S. Green, M. Lennon, C. Lewis, R. Southwood, K. Wong and A. Yedigaryan, Do mLabs Still Make a Difference – A Second Assessment (World Bank, 2017). 130 GSMA Agritech Toolkit for the Digitisation of Agricultural Value Chains (GSMA, 2020), p. 63. 131 Author interview, Ken Lohento, 29 August 2020. 132 B.K. Addom, M. Hailu, S. Totapally and M. Tsan, The Digitilisation of African Agriculture Report (2018–2019) (Dalberg for CTA, 2019). 133 ‘The digital life of Kenya’s smallholder farmers – who’s using what phones to access information and loans’, Balancing Act’s News Update 953 (30 November 2018), www.balancingact-africa.com/news/telecoms-en/44475/ the-digital-life-of-kenyas-smallholder-farmers-whos-using-what-phones-toaccess-information-and-loans (accessed 7 December 2021). 134 D.P. Murembe and J. Lubega, State of Information Communications Technology for Agricultural Innovation in Uganda (Uganda Technology and Management University for UCC, 2019), p. 13.

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7

The ugly underbelly of the communications revolution: corruption, cronyism, regulation and government (1999–2020) This chapter looks at how personal and corporate greed creates corruption in many sub-Saharan African countries, the extent of it and frameworks for understanding it. It looks at the different categories of corruption specifically found in the telecommunications industry, including: how to obtain a telecoms licence; bribing to get equipment contracts; using fraud to steal from the government and the private sector; and predatory corruption used to threaten individuals. The opening section looks at the most high-profile telecoms corruption case on the continent and what it reveals about nepotism and political patronage. Telecoms start-up founder Isabel dos Santos’ life falls apart In November 2019, Africa’s richest woman, Isabel dos Santos, visited Cape Town. She was attending the largest telecoms industry event held on the continent and had been invited to speak about the need for improvements in infrastructure:1 ‘It was also an honor for me to be part of a panel made up of women only … It is an inspiration and a pride to see women’s leadership. My dream is to see that leadership multiply across the continent and around the world.’ 2 However, this turned out to be one of her last untroubled appearances. Dos Santos was privately educated in the UK3 and started various businesses when she returned to Angola, where her father, José Eduardo 193

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dos Santos, was the president: ‘I was the founder of the second mobile provider Unitel and [the pay TV provider] Zap. My involvement in Unitel started because I used to do Motorola relay radio systems. We used to be a big provider of a “walkie talkie” radios. We migrated to building telecoms networks.’ I was very exposed obviously to the Western business environment and I realized the potential that it had. The transforming of the economy [after the civil war] was a lot bigger than we actually understood. So one of the things I tried to do when I came back to Angola was, in fact, to use what I had seen elsewhere in terms of business drive and initiative in the private sector.4

She described herself as a self-made entrepreneur: ‘I’ve successfully built over ten businesses and I’m leading brands from industry to retail to cinema, and I built them. These are not businesses that are state-owned businesses.’ 5 Many of them were characterised by international expansion both across the continent and elsewhere.6 However, a rather different picture of dos Santos’ finances emerged a month after the conference. An Angolan court ordered the freezing of her accounts and the seizure of her stake in several local companies, including Unitel and the bank Fomento de Angola. At the request of the Angolan government, Portuguese authorities froze her bank accounts in Portugal. As a Forbes writer put it: with her father out of office, her empire is a shadow of what it once was, with corruption charges levied against her by her country, assets frozen by courts in three different nations and a lawsuit claiming hundreds of millions of dollars in unpaid debt in a fourth country … As best we could trace, every major Angolan investment held by Dos Santos stemmed either from taking a chunk of a company that wanted to do business in the country or from a stroke of the president’s pen that cut her into the action.7

The statement that accompanied the Angolan seizure of dos Santos’ assets asserted that: ‘The state through its companies … transferred enormous quantities of foreign currency to companies abroad whose beneficiaries are the defendants, without receiving the agreed return … The defendants 194

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recognize the existence of the debt but allege that they do not have the means to pay.’ 8 The seizure of her assets brought about not only dos Santos’ loss of reputation (she was dropped from the Forbes Rich List in January 2020) but also the loss of control of her interests in Unitel. She was being pursued in the UK by Unitel, which claims that her Dutch company, Unitel International Holdings (UIH), defaulted on multiple loans issued by the Angolan Unitel from 2012. Increasingly valuable repayments were missed in 2019 and 2020, following the publication of the Luanda Leaks investigation by the International Consortium of Investigative Journalists. Unitel was seeking repayments of a total of $430 million.9 Dos Santos was chair of Angolan Unitel at the time of the loans, which were used to fund acquisitions of communications companies across the lusophone world. These included its purchase of stakes in a Portuguese company, Zopt, and creation of subsidiaries (using the Unitel brand) in Cape Verde and São Tomé and Príncipe.10 Unitel also alleges that UIH, despite its name, had no corporate connection to it. The original source of dos Santos’ wealth was her shareholding in Angola’s Unitel, along with her father’s political ally General Dino Nascimento: each has a 25% share in the company and it is not clear how either of them found the money to buy their share. It is estimated that Unitel generated more US$5 billion in dividends to shareholders, of which she would have received US$1.25 billion.11 A dispute with the new owners of Unitel, the Brazilian company Oi, about payment of dividends and the rights to the nomination of board members, was settled in its favour at the Paris International Chamber of Commerce. Its local shareholders were ordered to pay Oi US$654.2 million plus costs. After Isabel dos Santos’ father resigned as president of Angola in September 2017, his successor started to dismantle some of the corruption in the country, although it is unclear whether this will be all of it, or simply those benefits gained under the previous incumbent. In December 2017, two months into Lourenço’s presidency, the long-awaited award of the fourth mobile licence was made to a little-known company, Telstar. Six companies had passed the first-stage assessment, only two of 195

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them meeting the full requirements. One of these, MTN, dropped out in November 2018, complaining that the process was ‘flawed’ and there was a ‘lack of transparency’. This left Telstar – a company that had never run a full-scale mobile operator – as the winner. Ninety per cent of Telstar’s shares were held by General Manuel João Carneiro,12 another political ally of the former president.13 In the event, the president overruled the minister of telecommunications and ICT, and required the bidding to be re-run. The granting of shareholdings to family and political allies was a consistent theme under Angola’s previous president. In 2009 the Council of Ministers took the decision to privatise the government-owned mobile operator Movicel without a public tender. Among the main shareholders through different holding companies were six officers involved in President dos Santos’ Presidential Guard. Isabel Dos Santos had: ‘built an empire of over 400 companies and subsidiaries, operating in over 94 financial secrecy jurisdictions such as Malta, Mauritius and Hong Kong’.14 As telecoms policy analyst Ewan Sutherland put it: ‘The question (inevitably) arises as to how she was able to use the wealth she acquired internationally … given the multiplicity of governance systems and protections, so few alarm bells rang or, perhaps, were muffled and how easily she came to be accepted as a successful business person.’ 15 The remainder of this chapter looks at how corruption might be understood and the different categories of corruption found in the telecommunications industry. Why and how corruption happens As the Angolan story shows, the ugly underbelly of sub-Saharan Africa’s communications revolution is corruption. The ‘new’ Africa, often represented by the telecoms industry, has not always changed ‘old’ African ways of doing things. These practices are widespread in sub-Saharan Africa: ‘the vast majority of the continent’s one billion people live under very corrupt regimes …’ 16 196

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Corruption in telecommunications in sub-Saharan Africa can be understood only in the wider context of how governments and businesses interact in the political economy of its countries. This relates to patronage or patrimonial capitalism and rentier capitalism. Patronage capitalism is where the core organising principle of ideal-typical patrimonial capitalism is patron–client relations between political and economic elites, which deeply penetrate the social fabric. The ruling groups regard society as their own private domain: the lack of distinction between office and office holder allows private appropriation of public resources for personal gain.17

This definition can be used to understand the Angolan example in the previous section: The Office of the President was the source of patronage, rewarding loyalty in archetypal patron–client relationships … when the government adopted a privatisation policy and pressed oil firms to engage in Angolanisation, it was those who had already been made wealthy by the regime who were able to take advantage of these opportunities.18

A smaller example of patronage capitalism, where the president regards the government as his personal domain, can be found in Gambia. Between 2013 and 2017 former President Yahya Jammeh personally withdrew at least US$50 million from the central bank and state-owned telecoms company Gamtel.19 Analyses of sub-Saharan African corruption put the blame either on the African bribe-taker or on the international actors offering bribes and those facilitating their concealment. Arguments involving predatory international capitalism in Africa highlight the illegal outflows from a continent that loses an ‘estimated $88.6 billion each year, equivalent to 3.7% of the continent’s economic output, in illicit capital flight’, according to one report by the United Nations Conference on Trade and Development in 2020.20 The hacked documents publicised by the International Consortium of Investigative Journalists21 have highlighted the role of Western advisers who have facilitated this flight: money talks, and few seem to have questioned where it came from. 197

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But this interpretation describes only one side of the corrupt transaction. There have to be those who are willing to take bribes. There have been two different ways of accounting for their actions: firstly, the Afrocentric view, which argues that corruption arrived with colonialism and Africa’s ‘traditional’ rulers would have been unfamiliar with the idea; and secondly, the ‘decolonising’ view, which sees corruption as universal human behaviour. In response to Afo Adagame’s challenge that Africans should ‘look back into the past … in an attempt to locate the source of corruption in contemporary African nations’, it has been suggested that ‘there are a plethora of African proverbs that espouse that corruption of different kinds took place in pre-colonial Africa’.22 Given the difficulties of generalising across so many countries, it might be said that the economies of most sub-Saharan African countries before the liberalisation telecoms and internet tended to have two characteristics in common. Firstly, the government dominated the economy (and in most cases still does) and, where elections rarely changed who was in power, this meant that the president or prime minister wielded considerable power over very long periods. Secondly, this political and economic dominance created forms of ‘rentier’ capitalism23 that relied on patronage from those in power or the use of the ‘right connections’. Those with political connections were able to operate monopoly or low-competition businesses: these included things like hotel franchises, car dealerships and commodity dealing. It is hard to remember how the telecommunications sector in many African countries looked before things changed: ‘We were a country with one TV station, one President and a telecoms company which controlled a monopoly access. The internet was the direct opposite of what we had on the ground.’ 24 Liberalised markets like the internet and the ‘culture’ that went with it were in direct opposition to the various forms of ‘rentier capitalism.’ The inefficiencies of the monopoly government telecoms companies encouraged corruption in order to overcome scarcity: there was always a waiting list for fixed lines, so customers wanting them immediately needed to pay a small bribe to the engineers to install them. But corruption 198

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in terms of who got access to business opportunities (through licensing) favoured the wealthy and the well-connected. It is unlikely that Isabel dos Santos would have got the business opportunities she did without her father being the president. For those unwilling to pay bribes, corruption and the attitudes it fostered were often a barrier to doing business. The dual process of liberalisation and privatisation opened up a space for a different kind of capitalism which accommodated ideas of ‘free markets’ and competition. The governance of this process through newly created regulators with new laws and regulations was designed to create a ‘level playing field’. Certainly, the notion that telecoms regulators were independent – whether or not they were in reality – unlocked business opportunities for a wider set of people. In Nigeria, the government was about to hand out mobile licences to local companies, few of which had ever operated a mobile phone network of any scale. Regulators were not necessarily part of a move towards ‘democracy’, but they introduced a set of processes with (sometimes) unpredictable outcomes. As a result, the president’s friends did not always win the prizes. The extent of corruption By their very nature, levels of corruption are not easily measured. The most widely used index, devised by Transparency.org, is based on perceptions of corruption from within countries. In 2020, thirty-six out of forty-nine sub-Saharan African countries were in the bottom half of the ranking.25 There are documented cases of telecoms corruption or dubious business practices in twenty-nine countries: for example, Mauritius, where many communications companies are registered, was blacklisted by the European Union in 2020 over ‘money laundering’.26 There are a further seven countries where anecdotal evidence of telecoms corruption exists.27 In response to its various questions about contracts and licences, a World Bank/International Finance Corporation Enterprise Survey found evidence of more corruption in DRC, Angola and Tanzania than in Namibia and Madagascar.28 As with stocks, corruption in countries goes up and down, depending on who is in power. 199

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A global review by Sutherland of corruption in telecommunications could easily be applied to sub-Saharan Africa: Every conceivable form of bribe has been uncovered, including suitcases of cash, payments to offshore bank accounts, luxury foreign travel, expensive gifts, and shares in operators. There is also the widespread adoption of cronyism and nepotism, the awarding of licences to political supporters and relatives … Corruption has involved heads of state, their immediate families, government ministers and senior civil servants, plus cronies of ruling cliques, manufacturers and operators.29

The different types of corruption, with examples Corruption in the telecommunications sector mirrors wider patterns of corruption: exerting influence to get operating licences; the winning of contracts for equipment sales and services; embezzling, stealing and fraud in government and private sectors; and predatory corruption. In the first two types of corruption, money or its equivalent changes hands to obtain something specific: a licence, a contract, a state asset (as in the case of a government telecoms company) or a decision favourable to a business. For example, with respect to the latter, when MTN Nigeria faced a US$5.2 billion fine over its failure to register SIM cards, a staff member gave 500 million naira to President Buhari’s chief of staff, Abba Kyari. MTN’s fine was reduced to US$1.7 billion, but the company fired the individual who had paid the bribe. The findings of an investigation into the affair were never made public, and the chief of staff remained in post.30 Other types of corruption refer to individuals or groups of individuals simply helping themselves to resources, and avoiding formal controls that might inhibit that. Predatory corruption is where private and state players corrupt the ‘forces of law’ in order to extract money from their victims: this usually involves threatening them in some way, often by putting them in jail. Although corrupt players seek to avoid publicity, over the decade since 2011 a great deal more information about corruption has emerged. This chapter relies on information that has come from a variety of different 200

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sources, including: prosecutions under the US Foreign Corrupt Practices Act; hacked documents from the ‘Leaks’ movement’; African presidents using corruption allegations to move against their rivals; and African countries’ anti-corruption investigations. A good example of corruption allegations being used to exert political pressure is the case of Mike Adenuga, the owner of Nigerian telecoms company Globacom and a close business associate of ex-military ruler Ibrahim Babangida. In 2006 the country’s anti-corruption agency arrested him ‘in connection with suspected money laundering’. Babangida had announced the week before that he was going to stand in the following year’s elections. No charges were ever bought against Adenuga, and Babangida did not stand.31 Changes of president also create waves of anti-corruption charges. After Macky Sall was elected president of Senegal in April 2012, the former director-general of the telecoms regulator Autorité de Régulation des Télécommunications et des Postes, Ndango Diaw, was arrested along with businessman Moustapha Yacine Gueye and one of the regulator’s accountants.32 The charge was that money (1.8 billion West African francs) had been transferred to Gueye and that he had been given a telecoms licence, arranged by former President Abdoulaye Wade on the eve of his departure from power. Gueye paid back the money and charges against him were dropped.33 Corruption is often organised on Mafia lines, according to which the more junior protagonists pass a proportion of their corrupt gains upstairs. In one West African country, the CEO of the state telecoms business was jailed for alleged corrupt practices. He was released several months later, when it was claimed that his imprisonment had been an administrative error. In the event, he had been failing to pass kickbacks on to his political superiors. Getting a licence: finding the winning hand The process of acquiring a mobile operator licence starts with finding a local associate, and this often is the nexus for questionable transactions. 201

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The mobile operator’s local partner can range from someone ‘connected’ to the president to simply a credible local business person. According to the CEO of one ex-mobile operator, their representative needed genuinely to be part of the local community rather than simply ‘a ‘front man’ for a particular set of interests: ‘you need local partners who can open doors but who are also independent … Finding these kinds of local partners was not easy, as buying a 10–15% shareholding in a local Celtel operation might cost between US$10 and15 million and very few local businessmen had that kind of money.’ 34 If a licence requires levels of finance beyond the means of the local investors, the operator may have little choice but to offer them a loan to acquire the equity involved. However, if these loans are not repaid, then the line between genuinely helping a local investor and giving a questionable payment is wafer thin. Three examples – DRC, Kenya and Cameroon – are given here that illustrate how mobile operators give shareholdings directly to ‘friends of the president’ to secure licences. In one case, in Kenya, a payment was made by a ‘facilitation company’ to ensure that a licence was successfully obtained. In most cases, the manner in which these payments or shareholdings are given is designed not to be transparent and thus not accountable to either the government or the regulator. In 1999 Gambian entrepreneur Alieu Conteh inspired by a speech from the new president of DRC, Laurent Kabila, decided to launch a mobile network. He took his team to see the minister responsible in order to explain what they planned and to get an operating licence: ‘Four months later, the minister calls me into his office and tells me that the government has approved the licence, but before they can issue it, I must pay US$100,000.’ 35 To tell you the truth, I didn’t know [whether it was an exclusive licence]. I’d never seen a telecommunications licence before. But the government wanted US$100,000 in American dollars to be paid to the Central Bank. I found the money. Three months later, the minister calls me again. Now he says, ‘Conteh, you have to pay another US$100,000.’ So I paid $200,000, but I still did not have the licence … [Later] the Minister of Communications phoned me and said, ‘The Ugandan government sold their GSM licence 202

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The communications revolution for US$8 million, and Uganda is a small country. So our licence is US$8 million’! I kept my cool. I said, ‘Okay. Give me a few days.’ A week later I went to the Minister and said, ‘Your Honorable Minister … US$8 million for Congo? In the future, maybe. Today, no.’ He asked, ‘Why?’ I said, ‘The war is why. Everything is broken. Everybody is leaving the country.’ Finally, he listens to me. He asks, ‘Well, Conteh, how much can you pay? What do you think the licence is really worth?’ I have to be fair. I say $2 million. He called me that evening at 10 o’clock to tell me I’d got a 20-year licence to operate a GSM network in Congo.36

In 2001, Conteh’s company, Congo Wireless Networks, formed a joint venture with Vodacom, his company owning 49% and Vodacom 51%. One of his shareholders was Keratsu Holdings, incorporated in an offshore jurisdiction (Niue) in 2001, which had a 9.6% indirect stake in Vodacom Sprl.37 Half of that stake was owned by Jaynet Kabila, twin sister of the then DRC president, Joseph Kabila, and daughter of the assassinated Laurent Kabila. She was elected to Parliament in 2011 and was later described by Jeune Afrique as ‘the most influential person in the president’s entourage’.38 The other director of Keratsu Holdings was one of Kabila Snr’s advisers. The two Kenyan examples both involve facilitation payments and, in the first case, the allocation of shares in a non-transparent jurisdiction. Kenya’s first and biggest mobile operator, Safaricom, was set up as a fully owned subsidiary of the government-owned Telkom Kenya. In May 2000 Vodafone acquired a 40% stake in it and the government retained 60%.39 In 2006 Kenya’s Nation newspaper broke the story that in 2003 Mobitelea Ventures Ltd, a Guernsey-based shell company, had been allowed by Vodafone to acquire a 5% stake in Safaricom.40 Gavin Darby, Vodafone Group’s Chief Executive for the Americas, Africa, China and India told the UK Guardian that Mobitelea was Vodafone’s chosen partner in Kenya: ‘When Vodafone makes investments in new territories it is not uncommon that it works alongside a partner who typically gives advice on local business practices and protocol and the various challenges associated with investing in a new market.’ Citing a duty of confidentiality, he refused to say to whom the shareholding was 203

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given. In the event, it emerged that Mobitelea had been registered only several months after it had struck a preliminary deal with the Kenyan government. Documents showed that, in return for its services, Mobitelea was given US$5m in cash and a 5% stake in a company that analysts valued at US$2 billion. Vodafone brought back half of Mobitelea’s stake at the beginning of 2003, and at the end of fiscal year 2008/9 Mobitelea sold its remaining indirect shareholding in Safaricom back to the Vodafone Group.41 So who benefited from this hidden transaction? ‘There is speculation that members of [President] Moi’s inner circle may have benefited from the deal.’ 42 According to Le Monde, in May 2003, the French government agency responsible for illegal financial operations, Tracfin, and a judicial inquiry discovered that two French telecoms companies (Vivendi and Alcatel – for the latter, see below) were using the services of a company to make ‘facilitation’ payments. On 6 August 1999 Vivendi Telecom International contracted with Telliac in order to obtain the second mobile licence in Kenya. This agreement provided for the payment of a ‘success bonus’ in the amount of US$3 million.43 According to Africa Confidential, the Vivendi-Sameer Consortium bid was significantly lower than the other two competing bids: [It] bid just US$55 million for its licence. Two competitors submitted bids, for $94 million and $120 million. On the face of it, that cost the [Kenyan] Treasury about $50 million. The all-powerful Trade and Industry Minister, Nicholas Biwott, who has taken a very close interest in the matter, describes the award as ‘good for Kenya’.44

The Cameroon example illustrates how at least three of the main telecoms players in the country have local partners or senior appointments that are all allies of President Paul Biya and, until the end of 2018, the chair of government telco Camtel and the local shareholder of MTN were father and son. In early 2002, MTN launched a mobile operation in Cameroon with Colin Ebarko Mukete, who was not only a local shareholder (30%) but its chair. His father is Victor Nfon Mukete, the chief of the Bafaw, a 204

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long-standing ally of the president. The business holdings of Americaneducated Mukete Jnr included: STV, Boom TV, telephone card companies, an internet solutions company and an ad agency, Spectrum Advertising. He has an estimated fortune of US$380 million and, in 2017, was listed by Forbes as the ninth most-wealthy person in Africa.45 Until 2018, Mukete Snr was the chair of Camtel, the state-owned telecoms company, but at the end of 2018 he was sacked by the government in relation to a corruption investigation of director-general David Nkoto Emmane and seven other members of his management team. The post of chairman was described as ‘lucrative’.46 A significant contributor to the ruling party – Baba Danpullo – was also the local shareholder (30%) in another local mobile company, Vietnamese-owned Nextel Cameroon. He was originally a trucker and the owner of several market stalls but got import licences for rice and flour. His other investments include a large tea estate (part of a controversial privatisation), real estate (including malls and buildings in Nigeria, France, Switzerland and South Africa) and transportation (in state-owned companies such as Sodecoton and Aéroports du Cameroun). According to Forbes he was worth FCFA547 billion in 2019. In 2019 there was a dispute between Danpullo and the company. The dispute involved issues such as signatures for financial transactions, the recruitment of staff, engagement of foreign partners, the purchase of telecoms hardware and technology transfers. Following a meeting between ministers from Cameroon and Vietnam, it was reported that the government would launch an inquiry to investigate the dispute and propose a resolution to end it.47 Other high-profile cases include those related to governments in Liberia, Mozambique and Niger. • In Liberia, for example, President Charles Taylor and an associate were part-owners of a local mobile operation and its revenues financed Taylor’s government.48 • In Mozambique in 2003, Vodacom won a mobile licence and provided a loan to the ruling party, Frelimo (rather than the Government itself) to create a 3% shareholding in the party’s economic arm.49 205

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• In Niger, a local businessman (one of the president’s main donors), who featured in the Panama Papers, bought the local Orange subsidiary after a tax dispute with government.50

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Bribing to get contracts Bribes are often paid to obtain contracts or, in the case of Benin below, to improve the contract terms. In the case of ‘facilitation company’ Telliac, it was employed by telecoms equipment vendor Alcatel to obtain equipment contracts. The example from Ethiopia is also about equipment contracts but involves cases of people asking for bribes at the country’s monopoly telco, Ethiopian Telecommunications Corporation (ETC). The chapter concludes with a summary of the instances where corruption has been alleged against Chinese telecoms vendor Huawei, including a case in 2020 in Namibia. A now defunct American equipment vendor, Titan Wireless, paid about US$2 million to the 2001 election campaign of Benin’s then incumbent president, Mathieu Kérékou, ‘at the direction of at least one former senior Titan officer based in the United States’. Much of this money was, allegedly, spent in supplying the Kérékou campaign with election campaign T-shirts. In return, Titan was seeking an increase in its share of the revenues from the Beninois company it was contracted to help, Libercom. In 2005 its parent company, Titan Corporation, a military and intelligence contractor, agreed to pay US$28.5 million to settle criminal and civil charges brought under the US Foreign Corrupt Practices Act. From 1999, Titan had been paying an agent, who claimed to be close to the president of Benin, hundreds of thousands of dollars for ‘consulting’ services. However, these were neither properly documented nor shown to have been performed, but were a cover for bribes being paid to officials in Benin. In 2000, telecoms equipment vendor Alcatel signed an agreement with contract facilitation company Telliac to get contracts for its products in several sub-Saharan African countries including: Sudan, Ethiopia, Nigeria, Rwanda, Tanzania, Zimbabwe, Zambia and Uganda. Under the contract, Alcatel paid €5 million to achieve this. A police search of Telliac’s premises 206

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noted two payments from Alcatel, of €8,200,000 and €2,600,000, in the accounts of a company called Prince Reef Investments, the beneficiary of which remains unknown.51 However, this will undoubtedly have been a ‘facilitation’ payment to get a contract. A World Bank report on corruption in Ethiopia in 2012 cites three cases of alleged corruption between 2007 and 2008 at state telecoms company ETC. In July 2007, ETC had dismissed sixteen high-level employees for corruption as a result of an audit report that suggested irregularities in purchases made from international suppliers. The contracts in question were worth US$54 million. In January 2008 Ethiopia’s Federal Ethics and Anti-Corruption Commission brought charges against a former ETC CEO and twenty-six former ETC executives for ‘procuring low-quality equipment from companies that were supposed to be rejected on the basis of procurement regulations’. The contracts in question allegedly were worth US$154 million. In August 2008, a senior ETC manager was arrested after an audio recording of him soliciting a bribe from an international supplier was received from an anonymous source.52 Chinese telecoms equipment vendors have been long-standing suppliers to the ETC: ZTE started in 1999 and Huawei in 2000.53 Between 2000 and 2018, Ethio Telecom and the government have taken loans of US$3.1 billion from Chinese banks for telecoms equipment.54 A VOA (Voice of America) article in 2019 summarised global allegations of bribery against Chinese telecoms equipment vendor Huawei and detailed sub-Saharan African countries Ghana and Zambia as examples. A former US House Intelligence Committee professional staffer who gave testimony to Congress in 2018 was quoted as saying that there were a dozen African country examples. According to VOA: ‘The company has denied the allegations of corruption and said it has strong safeguards against corporate graft. In a statement on its website, Huawei says it has a “zero-tolerance” policy on graft.’ RWR Advisory Group, a consulting firm that tracks Chinese investments around the world, estimates that Huawei has entered into more than US$5 billion worth of business deals that have attracted allegations of bribery and corruption. The charges against the company range from outright 207

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bribery to making illegal donations to political parties in exchange for contracts and other business advantages.55 In 2020 Huawei was again in the middle of a bribery case, this time in Namibia. According to an Al Jazeera Investigative Unit report,56 a city councillor alleged that she was offered a bribe by a local politician to ensure that Huawei would win an exclusive contract to build the 5G telecommunication network in the country’s capital, Windhoek. She claimed to have been offered US$300,000–360,000 to drop her objections and allow the city council to approve the signing of the contract. Snouts in the trough: stealing from government and the private sector Cultures of corruption tend to take their lead from the top. Those seeing a president and his cronies rewarding themselves corruptly tend to assume that the same privileges are open to them. This leads to the wider corruption of both government and business. In telecoms terms, corruption is both more visible and more widespread in government-owned telecoms companies than in private sector companies, although these are not exempt from it. In the early 2000s there was a massive ‘call diversion’ scam in Telkom Kenya, operated by corrupt employees. It involved diverting international calls meant for Telkom Kenya and getting the revenue from those calls. By 2003, Telkom Kenya had lost a massive US$1.6 billion over the previous five years through corrupt trading and vandalism.57 These employees were not just a few ‘bad apples’: they were sometimes closely tied to politicians and their associates: ‘as if to drive the point home, one of the firms [closed down for illegal operations] has been linked to associates of a former Cabinet minister’.58 A particularly egregious example of how individual corruption hampers effective business operation is provided by DRC’s government-owned telecoms company Société Congolaise des Postes et Télécommunications. In 2011 the WACS international fibre cable was due to come ashore but no landing station had been built. Not only had the contract been given 208

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to a local company without the required knowledge and experience but the US$3 million worth of government funds allocated for the project had vanished. The director general was subsequently charged with high treason and jailed for his part in the scandal.59 An example from Benin demonstrates how this kind of corrupt culture can destroy what might otherwise have been a functioning business. In 2017 Benin’s anti-corruption agency, Fonac, carried out an investigation of the mobile company subsidiary of Benin Telecoms, Libercom. It found that through mismanagement and ‘unjustified’ expenditure it had run the company into the ground financially. It granted free telephone services to favoured individuals and had a bloated senior management payroll. The number of Libercom management positions had ‘increased from 26 to 54’ over a period when the mobile company’s customer base and revenues had dwindled, while ‘several officers appointed to these new posts were reclassified to higher categories’, pushing the company towards bankruptcy. In the private sector, Kenya’s Safaricom has continually had to dismiss employees for fraud. In 2019, it reported having investigated thirty fraud cases, compared to fifty-seven in the previous year. But more of its 2019 cases were reported to law enforcement agencies: fourteen, compared to three in 2018. As a result, the number of staff being dismissed has fallen, from fifty-two in 2017, to forty-three in 2018 and eighteen in 2019.60 These dismissals were from a large workforce, peaking at 6,477 in 2019. They are not confined to junior or mid-level staff: 2018 marked a major investigation involving a corporate loyalty scheme, which resulted in the dismissal of senior staff.61 Predatory corruption: using threats, allegations and blackmail Although this type of corruption is common in only a minority of countries, it is often a powerful disincentive to outside investors. The following example provides many of the most frequent features of this kind of corruption. The CEO of a local communications subsidiary in a sub-Saharan African country reached the point where the major investor could no longer put 209

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money into the company. Outside investors were sought, but what had been anticipated to be a major deal fell through. At that point the local investor proposed buying the company and asked the CEO to stay on and run it. After six months of the staff not being paid, the CEO left with a letter acknowledging his unpaid salary. Three months later, he contacted me and said I need you to help me. The networks are not working. [The original parent company] is not returning my calls. I’m going to sue you and [them] for not keeping up the network. He said that I had signed a legal letter while CEO for an overdraft, forged the signature [of the parent company’s CEO] and used the money in my personal capacity. [A major international accountancy company] did the audit for five years. My lawyer said this was a huge joke.62

The former CEO went to court with the audits and claimed that the overdraft had been repaid. The local investor claimed that the overdraft had not been repaid and wanted the former CEO to pay him US$150,000. In court, the local investor produced a forensic expert who said that the signature on the overdraft document was forged. To rebut this, the former CEO produced a video and a letter from the major investor saying that it was genuine: ‘[The local investor] was telling banks [in the country] that I forged the signature. The corporate world in the country is very small and it was harming my reputation.’ The former CEO took the case to another local court that ruled he was innocent: there followed a stalemate, with one court saying he was innocent and another saying he was guilty. Police came to arrest him because the case was not closed at the court that had said he was guilty: My lawyer said don’t let him go to jail, I’m coming. The military came in to stop the police. The apartment was surrounded by people. There was a syndicate at the court [that declared me guilty]. They target expats. Sometimes expats leave the country because they don’t want to have to deal with things like this. The bank sometimes has to pay back the money to company. We had fallen into a scam.

Inevitably, the local shareholder turned out to be ‘very politically connected’. Luckily, the victim was able to find a way of negotiating an end to the dispute. 210

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This chapter has highlighted how technology has had little or no impact on a range of corrupt businesses’ dealings in the communications sector. The final part of this book looks at how the start-up ecosystem in subSaharan Africa (Chapter 8) came about and its different impacts. The concluding Chapter 9 looks at the success story of liberalisation, the money that drove the changes it brought about, the continuing digital divide and the relationship between technologies and key behaviours.

Notes 1 ‘Isabel dos Santos calls for more energy investment to pave way’, Bloomberg (15 November 2019): www.bloomberg.com/press-releases/2019–11–15/ isabel-dos-santos-calls-for-more-energy-investment-to-pave-way (accessed 7 December 2021). 2 ‘Who will be the next African champion?’, Sharing Talks (November 2019): www.isabeldossantos.com/en/who-will-be-the-next-african-champion/ (accessed 7 December 2021). 3 Her degree is in electrical engineering, Kings College, London. 4 ‘Angola’s Isabel dos Santos on Zap going international and investing in local content’, Broadcast, Film and Convergence 328 (22 November 2019), www. balancingact-africa.com/news/broadcast-en/46355/exclusive-interview-angolasisabel-dos-santos-on-zap-going-international-and-investing-in-local-content (accessed 7 December 2021). 5 C.I. Nwoye, ‘Why Angola had to freeze the personal assets of Africa’s richest woman’, Quartz Africa (10 January 2020), https://qz.com/africa/1782852/ angola-freezes-africa-richest-woman-isabel-dos-santos-assets/ (accessed 7 December 2021). 6 ‘Angola’s Isabel dos Santos on Zap’. 7 K. Dolan, ‘How Isabel Dos Santos, once Africa’s richest woman, went broke’, Forbes (22 January 2021), www.forbes.com/sites/kerryadolan/2021/01/22/ the-unmaking-of-a-billionaire-how-africas-richest-woman-wentbroke/?sh=1ea3d3616240 (accessed 7 December 2021). 8 ‘Angola: court seizes assets of Africa’s richest woman Isabel Dos Santos’, AllAfrica (31 December 2019), https://allafrica.com/stories/202001020017.html (accessed 7 December 2021). 9 W. Fitzgibbon, ‘Unitel sues Isabel dos Santos company as her corporate empire continues to crumble’, International Consortium of Investigative Journalists (17 December 2020), www.icij.org/investigations/luanda-leaks/unitel-suesisabel-dos-santos-company-as-her-corporate-empire-continues-to-crumble/ (accessed 7 December 2021). 211

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Technology influences 10 C. Crosby, ‘Angolan telecom sues former exec’s biz for £327M’, LAW360 (16 November 2020), www.law360.com/corporate-crime-uk/articles/1327852/ angolan-telecom-sues-former-exec-s-biz-for-327m (accessed 7 December 2021). 11 S. Alecci, D. Dalby, W. Fitzgibbon, S.P. Freedberg, D. Reuter, ‘How Africa’s richest woman exploited family ties, shell companies and inside deals to build an empire’, International Consortium of Investigative Journalists (19 January 2020), www.icij.org/investigations/luanda-leaks/how-africas-richest-womanexploited-family-ties-shell-companies-and-inside-deals-to-build-an-empire/ (accessed 7 December 2021). 12 In February 2019 he was indicted for money laundering, https://en.wikipedia.org/ wiki/Higino_Carneiro (accessed 7 December 2021). 13 ‘Caso Telstar: que consequências para a governação angolana?’ Deutsche Welle (21 April 2019), www.dw.com/pt-002/caso-telstar-que-consequ%C3%AAnciaspara-a-governa%C3%A7%C3%A3o-angolana/a-48424915 (accessed 7 December 2021). 14 ‘Leaks show large firms aided Dos Santos’ offshore empire’, Balancing Act’s News Update 1009 (24 January 2020), www.balancingact-africa.com/news/ telecoms-en/46587/leaks-show-large-firms-aided-dos-santos-offshore-empire (accessed 7 December 2021). 15 E. Sutherland, ‘Isabel dos Santos – corruption in telecommunications in Angola and Portugal’ (unpublished, 2020). 16 B. Warf, ‘Geographies of African corruption’, PSU Research Review (13 April 2017). 17 A. Kohli, State-directed Development: Political Power and Industrialization in the Global Periphery (Cambridge University Press, 2004), quoted in U. Becker and A.Vasileva, ‘Russia’s political economy reconceptualised: A changing hybrid of liberalism, statism and patrimonialism’, Journal of Eurasian Studies 8 (2017), 83–96, at p. 86. See also C. Belton, Putin’s People (Blackwell, 2020). 18 Sutherland, ‘Isabel dos Santos’. 19 ‘Gambia accuses former President Jammeh of stealing US$50 Million’, AllAfrica (22 May 2017), https://allafrica.com/stories/201705240689.html (accessed 7 December 2021). 20 B. Fox, ‘Africa loses $89 billion a year to illicit capital flight, UN report’ (29 September 2020), www.euractiv.com/section/botswana/news/africa-loses89-billion-a-year-to-illicit-capital-flight-un-report-finds/ (accessed 7 December 2021). 21 The platform for many leaks, including the Panama Papers and Luanda Leaks. See S. Alecci, K. Gurney, B. Hallman and M. de Haldevang, ‘Western advisers helped an autocrat’s daughter amass and shield a fortune’, International Consortium of Investigative Journalists (19 January 2020), www.icij.org/ investigations/luanda-leaks/western-advisers-helped-an-autocrats-daughteramass-and-shield-a-fortune/ (accessed 7 December 2021). 212

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The communications revolution 22 B.O. Igboin, ‘Traditional leadership and corruption in pre-colonial Africa: how the past affects the present’, Studia Historiae Ecclesiasticae 42.3 (2016), 142–60, www.scielo.org.za/scielo.php?script=sci_arttext&pid =S1017-04992016000300009 (accessed 7 December 2021). See also an analysis of Ghanaian proverbs: K. Asamoah, J.N. Bawole, I.J. Musah-Suruga and E. Yeboah-Assiamah, ‘A socio-cultural approach to public sector corruption in Africa: key pointers for reflection’, Journal of Public Affairs 16.3 (2016), www.researchgate.net/publication/289502621_A_socio-cultural_approach_to_ public_sector_corruption_in_Africa_Key_pointers_for_reflection (accessed 7 December 2021). 23 B. Christophers, Rentier Capitalism – Who Owns the Economy and Who Pays for It (Verso, 2020); sometimes also called franchise capitalism. 24 Author interview, Papa Njie, Unique Solutions, 12 February 2021. 25 Corruption Perceptions Index, Transparency International (2020), www. transparency.org/en/cpi/2020/index/nzl (accessed 7 December 2021). 26 ‘Mauritius: EU “blacklisting” takes shine off jurisdiction, according to report’, IFC Review (6 November 2020), www.ifcreview.com/news/2020/november/ mauritius-eu-blacklisting-takes-shine-off-jurisdiction-according-to-report/ (accessed 7 December 2021). 27 Author’s estimate from own unpublished research. 28 S. Wickberg, ‘Overview of corruption in the telecommunications sector’, Anti-Corruption Resource Centre (8 April 2014), www.u4.no/publications/ overview-of-corruption-in-the-telecommunications-sector.pdf (accessed 7 December 2021). 29 E. Sutherland, Bribery and Corruption in Telecommunications: Best Practice in Prevention and Remedies (TPRC: 40th Research Conference on Communication, Information and Internet Policy Arlington, Virginia, 21–23 September, 2012). 30 See ‘Corruption in Nigeria’, Wikipedia (n.d.), https://en.wikipedia.org/wiki/ Corruption_in_Nigeria (accessed 7 December 2021) and ‘MTN fires Amina Oyagbola over bribery to Buhari’s chief of staff Abba Kyari’, Sahara Reporters (23 December 2016), http://saharareporters.com/2016/12/23/mtn-fires-aminaoyagbola-over-bribery-buhari%E2%80%99s-chief-staff-abba-kyari (accessed 7 December 2021). He died on 17 April 2020, of COVID-19. 31 ‘Nigeria agents in corruption raid’, BBC News (17 August 2006), http:// news.bbc.co.uk/1/hi/world/africa/5259252.stm (accessed 7 December 2021). 32 ‘Senegal – former DG of regulator detained for questioning over telecoms tax revenue’, Anti-Corruption Telecoms (30 June 2012), http://anti-corruptiontelecoms.blogspot.com/2012/06/senegal-former-dg-of-regulator-detained.html (accessed 7 December 2021). 33 ‘Moustapha Yacine Gueye chasse par La Garde rapprochee du President’, Seneplus (22 February 2014), www.seneplus.com/article/moustapha-yacinegueye-chasse-par-la-garde-rapprochee-du-president (accessed 7 December 2021). 213

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Technology influences 34 Southwood, Less Walk, More Talk, p. 84. 35 J. Pontin, ‘Alieu Conteh: how an African entrepreneur put cell phones in Congo’, MIT Technology Review (15 August 2007), www.technologyreview. com/2007/08/15/224301/alieu-conteh/ (accessed 7 December 2021). 36 Ibid. 37 M.J. Kavanagh, F. Wild and T. Wilson, ‘Congo president’s twin sister has an indirect stake in Vodacom unit’, Bloomberg (5 April 2016), www.bloomberg.com/ news/articles/2016-04-05/congo-president-s-twin-sister-has-indirect-stake-invodacom-unit (accessed 7 December 2021). 38 Jaynet Désirée Kabila Kyungu, listing in Offshore Leaks database, https:// offshoreleaks.icij.org/stories/jaynet-desiree-kabila-kyungu (accessed 14 September 2021). 39 In 2008 it sold 25% of these shares on the Nairobi Stock Exchange. 40 X. Rice, ‘Kenyan inquiry into Vodafone’s mystery partner’, The Guardian (16 February 2007), www.theguardian.com/media/2007/feb/16/kenya.citynews (accessed 7 December 2021). 41 https://en.wikipedia.org/wiki/Mobitelea_Ventures_Limited (accessed 7 December 2021). 42 J. Doward, N. Mathiason and G. Turner, ‘Revealed: how Vodafone allowed elites to reap profits of Africa’s mobile boom’, The Observer (12 November 2017), www.theguardian.com/world/2017/nov/12/vodafone-wealthy-elitesmobile-phones-africa (accessed 7 December 2021). 43 ‘Alcatel et Vivendi ont utilisé la même filière pour décrocher des contrats’, Le Monde (15 October 2004), www.lemonde.fr/archives/article/2004/10/15/ alcatel-et-vivendi-ont-utilise-la-meme-filiere-pour-decrocher-descontrats_383104_1819218.html (accessed 7 December 2021). 44 ‘Sorry, wrong number’, Africa Confidential (17 December 1999), www.africaconfidential.com/article-preview/id/1263/Sorry%2c_wrong_number (accessed 7 December 2021). 45 ‘Zoom sur le multimilliardaire Colin Ebarko Mukete, PCA de MTN Cameroun’, Cameroun CEO (30 March 2017), https://cameroonceo.com/2017/03/30/ zoom-sur-le-multimilliardaire-colin-ebarko-mukete-pca-de-mtn-cameroun-etproprietaire-de-spectrum-television-lascension-logique-dun-prince/ (accessed 7 December 2021). 46 ‘Senator Mukete dumps CAMTEL for the senate’, Cameroon Post Online 94 May 2018), https://cameroonpostline.com/senator-mukete-dumps-camtel-for-senate (accessed 7 December 2021). 47 ‘Cameroon: former Camtel D-G David Nkoto Emmane is under investigation for two corruption allegations, forbidden to leave the country’, Balancing Act’s News Update 977 (24 May 2019), www.balancingact-africa.com/news/ telecoms-en/45337/cameroon-former-camtel-d-g-david-nkoto-emmane-isunder-investigation-for-two-corruption-allegations-forbidden-to-leave-thecountry (accessed 7 December 2021). 214

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The communications revolution 48 E. Sutherland, ‘A short note on corruption in telecommunications in Liberia, 2012’, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2127082 (accessed 7 December 2021). 49 Doward et al., ‘How Vodafone allowed elites to reap profits’, The Observer, 12 November 2017, www.theguardian.com/world/2017/nov/12/vodafone-wealthyelites-mobile-phones-africa (accessed 7 December 2021). 50 ‘Orange pulls out of Niger over tax dispute – one of likely buyers is a tax avoider named in the Panama Papers’, Balancing Act’s News Update 982 (28 June 2019), www.balancingact-africa.com/news/telecoms-en/45513/orangepulls-out-of-niger-over-tax-dispute-one-of-likely-buyers-is-a-tax-avoidernamed-in-the-panama-papers (accessed 7 December 2021) and ‘Niger: and the winner is … a tax avoiding Nigerienne businessman who appears in the Panama Papers’, Balancing Act’s News Update 991 (30 August 2019), www.balancingact-africa.com/news/telecoms-en/45914/niger-and-the-winnerisa-tax-avoiding-nigerienne-businessman-who-appears-in-the-panama-papers (accessed 7 December 2021). 51 ‘Alcatel et Vivendi ont utilisé la même filière pour décrocher des contrats’, Le Monde (15 October 2004), www.lemonde.fr/archives/article/2004/10/15/ alcatel-et-vivendi-ont-utilise-la-meme-filiere-pour-decrocher-descontrats_383104_1819218.html (accessed 7 December 2021). 52 J. Plummer (ed.), Diagnosing Corruption in Ethiopia – Perceptions, Realities and the Way Forward for Key Sectors (World Bank, 2012). 53 E. Sahle, ‘Ethiopia: ex-CEO of former ETC guilty of corruption,’ AllAfrica (17 January 2011), https://allafrica.com/stories/201101180178.html (accessed 7 December 2021). This was one of the few attempts to break the pattern. 54 F. Abitew, ‘Ethiopia: the case for partial privatization of Ethio Telecom’, The Africa Report (1 September 2020), www.theafricareport.com/39864/ethiopia-thecase-for-partial-privatization-of-ethio-telecom/ (accessed 7 December 2021). 55 M. Farivar, ‘Bribery, corruption charges follow Huawei around world’, VOA (11 February 2019), www.voanews.com/a/huawei-alleged-corruption-andbribery/4781242.html (accessed 7 December 2021). 56 J. Kleinfeld and Al Jazeera Investigative Unit, ‘Corruption allegations in Namibian 5G deal with Huawei’, Al Jazeera (15 July 2020), www.aljazeera.com/ news/2020/7/15/exclusive-corruption-allegations-in-namibian-5g-deal-withhuawei (accessed 7 December 2021). 57 ‘Telkom Kenya lost SH120B through diversion of calls, says minister’, Balancing Act’s News Update 165 (27 January 2003), www.balancingact-africa.com/news/ telecoms-en/9713/telkom-kenya-lost-sh120b-through-diversion-of-calls-saysminister (accessed 7 December 2021). 58 ‘Exposed: how Telkom Kenya loses millions in international income’, Balancing Act’s News Update 226 (10 September 2004), www.balancingact-africa.com/ news/telecoms-en/8268/exposed-how-kenya-telkom-loses-millionsin-international-income (accessed 7 December 2021). 215

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Technology influences 59 ‘DRC expects WACS fibre link to go live “within 20 days”’, CommsUpdate (23 October 2010), www.commsupdate.com/articles/2012/10/23/drc-expects-wac s-fibre-link-to-go-live-within-20-days/ (accessed 7 December 2021). 60 E. Kivuva, ‘Safaricom laid off 18 employees to fraud in 12 months to March’, The Star (23 August 2019), www.the-star.co.ke/business/2019-08-23-safaricomlaid-off-18-employees-to-fraud-in-12-months-to-march/ (accessed 7 December 2021). 61 ‘Why Safaricom sacked deputy CEO Peter Arina and the customer care boss’, Kahawa Tungu (22 March 2015), https://omundukhumundu. wordpress.com/2015/03/22/why-safaricom-sacked-deputy-ceo-peter-arinaand-the-customer-care-boss/ (accessed 7 December 2021). 62 Author interview, name withheld.

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Part III

Taking the long view: start-up innovation and complex behaviour change

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8

Sub-Saharan African start-ups: getting beyond the hype to address deep market challenges (1995–2020) This chapter provides a critical description of the ‘start-up ecosystem’ for tech-enabled businesses. It looks at the deep challenges faced by local African start-ups and by international start-ups coming into the continent, using examples of e-commerce and ride hailing. The opening section looks at how two entrepreneurs – one Kenyan and the other Nigerian – came together to create an ambitious, pan-continental payments company and how they changed what it did as the market changed, and how they sought to find a profitable niche. The singular, tough life of an African start-up founder I came in one morning to work and there were policemen in my office and they were bundling my staff into a police van. The Music Copyright Society of Kenya was claiming that we were selling music [on mobile phones] illegally. In the early days we’d taken out a licence with them but then we decided to go directly to the musicians.1

Ken Njoroge, CEO of Cellulant, was a start-up entrepreneur before African start-ups were really a thing. He and two others had launched what was probably East Africa’s first digital marketing agency, 3mice, which they then sold. Shortly afterwards, in 2001, he met the person who would become his co-founder, Bulaji Akinboro. He liked the way Akinboro had analysed the various problems they talked about: ‘Eventually we got to the type of company we would build in the mobile sector. We launched [in 2004] with [marketing with SMS] services in Uganda 219

Taking the long view and then in Ghana and finally in Nairobi. We wanted to say we’re in both Kenya and Nigeria but we were running around Africa. It was a good story but it wasn’t working.’

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By the time the police had arrived on that fateful morning, Cellulant’s business was selling music as ringtones: It took a couple of hours in a police jail for them to understand there was no case and we would not pay them a bribe to be let out. It was a mindset thing. You have all the power. They are a big dog and you are a small dog but they won’t like your bite. We’ll make a rumpus out of it. Bulaji and I were always very clear that we would not pay bribes.

It was this kind of stubbornness that had enabled Njoroge to get the business started in the first place: ‘It’s how we got a Value-Added-Services2 licence. In the beginning there was only one, for the former president’s son. I went to [the telecoms regulator] CCK and said telecoms law is not very clear. I will be contacting the Attorney General about the matter. I won’t go away quietly.’ In those early days, everything was a struggle because, in the start-ups jargon (which came later), Cellulant was ‘bootstrapping’ with money from family and friends. Salaries were paid late and there were fights with landlords. But by 2006 ‘we started to generate steady revenues. We had a US$4 million turnover and we were profitable at the time.’ Cellulant claimed to have seven million music buyers across the seven countries it operated in.3 Although the company was always short of money, Njoroge’s first investor courted him, rather than the other way round. TBL Mirror Fund found the company through a scan of the mobile content market. The Fund’s CEO recalled: ‘He was the strongest founder but he was not fundraising.’ 4 Njoroge was somewhat reluctant because his family, who had put money into the company, didn’t want their shares to be diluted: ‘In 2008 [TBL Mirror Fund] would send me the term sheets and I remember saying to myself, wow, what are all these things?’ TBL Mirror Fund invested US$1.5 million and took a seat on the board.5

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For every US$1 song Cellulant sold, the mobile operator typically took about 80%, leaving it with 20 cents. Just at the point that Cellulant seemed to have reached some kind of financial stability, it lost most of its revenues when the dominant mobile operator, Safaricom, launched its own free music service. Trying to improve mobile payment on its music streaming service had set Njoroge thinking about creating a mobile banking platform. He took the idea to the main banks, but none of them was interested. Then, in 2007, mobile payments service M-Pesa launched: ‘Fear of M-Pesa persuaded the banks to pay attention.’ It launched business-to-business (B2B) applications: ‘The early sign-ups were multinational banks and we rolled out into Eastern and Southern Africa with banks like Barclays and Standard Bank. By the end by 2019, we had connected 120 banks to our infrastructure.’ 6 We needed to sell to merchants who wanted to take money: things like pre-paying utilities and topping up your mobile phone. We increased the payments utility of the infrastructure. We had a critical mass with banks and we were very merchant-centric. We ended up across a group of 240 merchants. For example, like most businesses, Kenya Airways were pushing people to book online. It wouldn’t have to pay 18% merchant commission to people like travel agents. You could pay with M-Pesa, Airtel Money, Visa and Mastercard. We organised this as a single offering and became a payments integrator.7

This change of direction meant that in May 2018 Cellulant had raised US$47.5 million in a deal led by TPG Growth,8 one of the larger investment deals in sub-Saharan Africa to date. Njoroge said that he had ‘to go out on the road and sell that dream to investors worldwide’. It took him two years.9 During the process, he lost six staff members in a terrorist attack on the DusitD2 complex in Nairobi.10 More bad news hit the company in 2020. Its farmers’ payments platform in Nigeria, Agrikore, suffered internal fraud: While conducting a compliance review on the Agrikore platform, we identified certain aspects of the compliance infrastructure and control

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framework of the platform that [had] not kept up with the platform’s rapid growth. An investigation revealed that 14 Agrikore employees had inappropriately received funds from Agrikore wallets. There is no indication that customer funds were compromised.11

In January 2021, Njoroge announced that it would be his last year as CEO of the company: ‘It wasn’t the [COVID-19] crisis, but the process that followed, which gifted me the clarity that the next phase needed an ‘enterprise runner’ rather than a ‘venture builder’.’ He also needed to spend more time with his family: ‘My wife humorously introduces Cellulant as her first-born child or her co-wife, because they’ve felt the ripple effects of any storm that was happening at work.’ 12 The remainder of this chapter looks at sub-Saharan African start-ups before broadband, the challenges of the local, tech-enabled ‘start-up ecosystem’ and the international examples of Jumia and Uber. Welcome to start-up land Africa Much writing about start-ups in general is ahistorical: it tends to blur the distinctions between their ambitions and reality. Nowhere is this gap more visible than in sub-Saharan Africa, for reasons explored in this section. In start-up land, the difference between snake oil and a world-changing idea can be wafer thin. Early idealism can change to meet financial imperatives: ‘[It helps to] explain the search engine giant’s pivot from an academic archive of the world’s knowledge to an advertising juggernaut.’ 13 Everybody is selling tomorrow: the start-up founders are selling to the investors; those same investors are selling to the people they raise money from. These may be development finance institutions who are, in turn, selling what they are doing to their own governments. Every one of them needs a story, whether it is about an individual company start-up, Africa’s success as the next big market or their impact on the lives of the poor, young people, women, whoever. The description of the early history of sub-Saharan Africa’s start-up sector that follows emphasises the many challenges that start-ups had to face before the internet improved. That 222

Sub-Saharan African start-ups

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had to await a constellation of favourable circumstances (see Chapter 3): ‘the availability of broadband internet [is] not more and not less than the starting point of possibilities’.14 What happened before African start-ups were a thing: the forgotten early years The first cohort of sub-Saharan African start-ups appeared in the 1990s: in 1995 South African Mark Shuttleworth founded Thawte Consulting, which specialised in digital certificates and internet security: four years later, in 1999, he sold the company to Verisign for US$575 million. In 1998 the US-based Africa Online, which is arguably the ‘Africa start-up zero’ outside of South Africa, relocated to Kenya. The arrival of Mark Davies’s Busy Internet in Ghana in 2001 (see Chapter 2) spurred the creation of a whole community of first-wave start-ups.15 In the same year the G8 Dot Force Initiative set up Enablis to help entrepreneurs in Kenya and South Africa. As already outlined in Chapter 6, during this period there was a great deal of interest from some donor-funded organisations (like IICD and IDRC) in using the internet to address a range of development goals in a more entrepreneurial manner, and the World Bank started funding incubators in 2008. Africa Online started life in 1995 in the US as a news service run by three Kenyan diaspora entrepreneurs16 and went into providing internet in several African countries. Caught up in the US internet bubble, it was bought by Prodigy, who were in turn bought by Carlos Slim, who decided to get out of Africa in 1997, selling to Africa Online to African Lakes. As one of Africa Online’s founders remembered: ‘The media business continued but it became less easy to charge and make money.’ 17 African Lakes (backed by Blakeney Management) sought to turn a conglomerate from the colonial era into an African technology company. It became a tech investor, buying not only African Online but also digital agency 3mice (see previous section) and B2B payments company Tradanet.18 While this might have been the right business, it was the wrong time, and failed: ‘It was a disaster. There were a couple of people from the UK who didn’t understand the internet. 223

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Taking the long view

An expensive chair and offices in Cavendish Square, basically for a business that couldn’t support those costs.’ 19 Many of the start-ups from this period failed, but a few survived (for example, Cellulant, Rancard and Virtual City). The same could not be said of call centre outsourcing companies, all of which failed except for those in Mauritius. The internet was expensive, not reliable and had a limited reach. Until M-Pesa launched in 2007, there was no way of taking payments digitally. Making money on phones through things like ringtones was constrained by the revenue-share models of the gatekeeping mobile operators, who took 70–80% of any income generated. One of the founders of Africa Online remembered how different it was at that time: ‘The tech scene was nothing like it is today. The people in it are very much up to date. Then it was very disconnected. We had to train everyone.’ 20 For early investors there was not much to look at: ‘I arrived in Kenya in 2005. People were asking me if I wanted to set up an IT fund. There were not enough companies to do it … There was no venture capital funding up until 2015.’ 21

How the ecosystem developed and what it looks like The second cohort of sub-Saharan African start-ups began around 2009–10 with the launch of country-based incubators and working spaces that gave them support. The Meltwater Entrepreneurial School of Technology (MEST) entrepreneurial training programme launched in Ghana in February 2008, followed by its incubator in 2010, and the launch of iHub in Nairobi in 2010: ‘MEST was the first organisation focused on software entrepreneurship in a Silicon Valley way.’ 22 The idea for iHub came out of the 2008 BarCamp. Someone asked why are we not meeting more frequently? … We wanted a place that people would feel comfortable to hang out. It [had] to have fast internet. It would be a foundation for the community to decide and set the agenda it wants. That’s a hard thing to sell. We had the idea but the early response from funders was that there was no tech community in Nairobi.23 224

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But it got funding and two thousand people joined when it opened in 2010. The launch of iHub had an impact well beyond its own activities. It created a narrative about African entrepreneurialism that others were not slow to take up. Technology and start-ups are a wider ‘imaginary’ that have had tremendous symbolic value. Their impact on young Africans cannot be overestimated: ‘We’ve gone from nothing to Facebook’s CEO meeting with our ICT minister and then coming to mLab. Mark Zuckerberg can relate to the minister as Kenya’s part of the global economy. We’re not a charity case. We’re rising up the Innovation Index steadily.’ 24 For international entrepreneurs like Zuckerberg, sub-Saharan Africa became the perfect place for achieving change through business rather than charity: ‘[Mark] Zuckerberg scheduled no time to hug undernourished infants in remote villages. Instead, he would meet software strivers … Software coders at a workshop in Nigeria’s ccHub cry out in joy when they meet him: “These are my people,” says Zuckerberg.’ 25 He describes incubators like ccHub and iHub as where ‘the future is going to be built [in an] entrepreneurial, knowledge-based economy’.26 iHub and other first-generation incubators inspired others across the continent to launch their own incubators. Not long afterwards, the term ‘Silicon Savannah’ was coined for Kenya and, although something of an overstatement, it caught people’s attention and the sense of the coming wave: ‘At the time, all tech was thought to come from Silicon Valley, and I wanted an African equivalent that would summarise the Kenyan tech scene for a Western reader.’ 27 The following year, in 2009, a Danish entrepreneur, Kresten Buch, launched the first seed fund for early-stage start-ups in Nairobi, 88mph. Its CEO saw mobile web users as a completely new market: ‘mobile web users who are coming online in Africa … They are going straight into mobile. There are not that many companies on this continent set up to cater for these users.’ 28 The number of start-ups in Kenya grew accordingly: ‘Digital technology start-ups have gone from close to none before 2010 to ‘10–15 start-ups a year [in 2011 and] now [in 2016] there are 70–100 a year.’ 29 In a relatively short period, a ‘start-up ecosystem’ had emerged in sub-Saharan Africa, brought into being by a combination of multinational 225

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companies (Google and Facebook), the development community and venture capital funders. It comprised a number of different elements: physical locations (including incubators and accelerators); events and media through which people met and networked; talent and ideas; supportive public and private sector players (including education institutions); and investment and funding. By 2016, the start-up ecosystem had a diversity of initiatives and activity across sub-Saharan Africa that included competition events (e.g. Seedstars, Pivot East), Bar Camps30 and start-up support events (e.g. Lean Startup Machine), private sector challenges (e.g. Safaricom’s AppWiz Challenge), technology salons, virtual and mobile incubators (e.g. Senegal’s Concree, the Ampion Bus), its own media (Tech Cabal, Techpoint, Disrupt Africa, Ventureburn and many others) and its own events (Tech4Africa, Mobile Web Africa). There were also internationally donor-funded programmes like SEED and the VC4Africa Green Accelerator Programme. Many of these survive at the time of this writing. The biggest growth areas have been incubators, innovation hubs and accelerators. In 2014, around one hundred of these were spread across twenty-four to twenty-seven sub-Saharan African countries.31 By 2019, Briter Bridges and Afrilabs reported that there were 643 across the continent, with twenty-two sub-Saharan African countries each having more than five such organisations. The largest clusters were Nigeria (90), South Africa (78) and Kenya (50). Just under 20% of these organisations (110) had failed by 2019.32 In terms of talent and ideas, a whole range of sub-Saharan African start-ups have set out to meet the demands of new mobile internet users: delivery and logistics (Kobo360, MAX, Sendy, Twiga Foods), e-commerce (Konga), entertainment and gossip (Ghafla, Voila Nights), e-reading (Okada Books, Bahati Books), games (Qene Technologies, Weza Interactive), health (Medical Concierge), online share trading (Abacus), price comparison (Price Check), property renting and sales (Hotels.ng, meQasa) and ride hailing (Little, Zay Ride): ‘Virtually every sector was going to be disrupted.’ 33 The world of socially oriented start-ups runs almost in parallel to the start-ups already described and touches almost every area of development. Examples include education (Eneza, Siyavula, uLesson), 226

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Sub-Saharan African start-ups

health (Totohealth), agriculture (eSoko, M-Farm, WeFarm), governance and accountability (Ushahidi) and environment (Afroes). Not all sub-Saharan African start-up ideas are tech-enabled, but a significant proportion are. A 2015 VC4Africa survey identified the main categories of start-ups as follows: computer software (24%), internet (21%), e-commerce (17%), agribusiness (17%) and education (14%).34 The target users for these start-ups are mainly urban and better-off: ‘There are a lot of perceptions that the [African] middle class is not really middle class. There are definitional issues. But with people on US$1 a day, there’s not much you can do. We’re starting from urban centres where the energy [in people terms] is different.’ 35 Not all start-ups are aimed at the urban middle class. Some of the better opportunities are in B2B supply chains. Trade Depot worked with SAB and Unilever, connecting them to formerly ‘invisible’, informal retailers. There are several levels of problem for fast-moving consumer goods distribution in sub-Saharan Africa. For example, an international beverage company has 150 distributors, two thousand informal wholesalers and six hundred thousand informal retailers: ‘It’s not able to see completely the distribution network below the first layer … Trade Depot provides a single platform for retailers and wholesalers using USSD. It then gets paid by the brands and distributors.’ 36 Kenya’s Twiga Foods has also tackled the same problem by targeting physical deliveries at the informal sector. Start-up activity in sub-Saharan Africa remains largely focused on (in descending order) South Africa, Nigeria, Kenya and Ghana in terms of the number of start-ups and the amount invested in them.37 While there is some correlation between population and economy size, Kenya is clearly disproportionately represented by its number of start-ups. While this ranking is by country, the reality describes cities and, more specifically, districts where start-ups appear to thrive: for example, Yaba in Lagos. However, the number of Africans employed by tech start-ups is very small, compared to the numbers of unemployed in all sub-Saharan African countries. In terms of jobs, companies responding to a 2013 VC4Africa 227

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survey had created an average of 5.7 new jobs per company, with a total of 1,011 new jobs. The projected new jobs level by the end of 2015 was estimated at 4,176.38 The 2016 Seed Academy survey of South Africa found that only 5% of respondents had start-ups with ten or more employees.39 One country example illustrates the scale of the challenge in terms of looking at start-ups to create new jobs: one interviewee for a 2016 study said that in Senegal 260,000 young people come onto the jobs market every year, for only 30,000 of whom there is likely to be enough employment. Although start-ups have an immensely positive, energising effect on economies, by themselves they will not generate sufficient new jobs for young people entering the employment market.40 Start-up funding in Africa (including North Africa) has grown from US$185.78 million in 2015 to US$701.46 million in 2020. Sixty-nine per cent of the amount raised in 2020 went into the following sub-Saharan African countries (in descending order): South Africa, Nigeria and Kenya.41 By comparison with telecoms investment, these amounts are relatively small: for example, in 2015 alone, telecoms investment in South Africa was US$1.6 billion, and in 2019 it was US$2.6 billion.42 The top four sub-Saharan African funding rounds give some idea of scale at the top-end: Flutterwave (US$35 million), Skynamo (US$30 million), Komaza (US$28 million) and Twiga Foods (US$29.4 million). The majority of deals are therefore much smaller. Investments by business category are fairly widely spread, with the top five categories covering 62% of funds invested: fintech (24.9%), e-commerce/retail tech (13.9%), e-health (10.3%), logistics (7.3%) and energy (5.5%).43 There are many different types of start-up investment funding in subSaharan Africa. They vary from venture capital funders who look for high rates of return from companies with high growth potential, to impact investors who are looking for social outcomes. However, it is quite common that regional investors have raised funds from development finance institutions that want similar social and environmental outcomes. There are also angel investor groupings in all the main start-up cities. In 2012, for example, angel investor Tomi Davis collaborated with the World Bank to start Lagos Angel Network, and in 2020 there were seventy-two networks. 228

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Beyond investors, a great deal of early-stage start-up money comes from international donors. One of the stronger arguments for start-up funding is that it might break the hold of the small club of patronage capitalism (see Chapter 7): people who are rich because they are friends with those in power.44 If there is no other funding, the only route to creating new wealth and business ideas is via the gatekeepers of patronage capitalism. Paga founder Tayo Oviosu (see Chapter 4) has described how this felt. In 2009 he was looking to raise US$1 million in investment. He went to South Africa to meet a friend of his uncle’s, who was excited by the Paga proposal and called him to arrange a one-on-one meeting: ‘[He] suggested I send him the full Paga business plan and we could go sell the idea to Mike Adenuga (Founder & CEO of Globacom) or Jim Ovia (Founder & CEO Zenith Bank) … we would make a few million, and I would still get to run the business.’ Oviosu was ‘shattered’ by this idea and turned down the offer, saying merely that he would consider it.45 Start-up funding provides perhaps some relative autonomy outside of existing patronage capitalism networks. The particular circumstances found in sub-Saharan Africa mean that competition is not always a fair fight: There are all these unwritten rules and dynamics that drive your ability to be successful or not … Somebody just wakes up one day and decides to go to some regulator or something, call in a favour and before you know it the regulator is at your door and says you’re doing X or Y [wrong]. It takes you two weeks to prove … you were doing everything on the up-and-up. You then have an investor who thinks something’s up. It just doesn’t make sense when you’re sitting in London or New York but it [does] in Lagos or Nairobi.46

Essential elements of the ecosystem As elsewhere, start-up ecosystems are only really as good as the support they receive from both the public and private sectors, particularly the education sector. The level of support for entrepreneurship in sub-Saharan 229

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African universities was initially quite low. In 2016, only seven institutions offered any kind of course in entrepreneurship.47 By 2019, a further five institutions had added entrepreneurialism to their offers.48 By comparison with many developed countries, this paucity of education opportunities is perhaps one of the greatest weaknesses of the sub-Saharan African start-up support system. For example, there are 448 courses in the UK offered by 143 institutions. This may be why a significant number of founders come from the diaspora. Within the private sector, the most likely collaborators for start-ups are mobile operators and the international online giants Facebook and Google. Only three (MTN, Orange and Vodacom) of the five big mobile operators49 have had a significant involvement in the start-up ecosystem from 2014. MTN, for example, has invested in several start-ups, most notably Jumia (see later). It has also run entrepreneurship challenges and has a solutions space in the University of Cape Town’s Graduate Business School. Orange has an annual social innovation prize, runs incubator spaces in Cameroon, Côte d’Ivoire and Senegal and has a US$50 million fund for Africa run by Orange Digital Ventures. Several mobile operators have opened APIs that allow start-ups to build their applications on top of their software and hardware. Vodacom’s Kenyan subsidiary Safaricom ran the first round of its US$1 million Spark Fund in 2014 and was preparing for round two in 2020: ‘All companies [in the first round] did well and are alive. Some have done well in terms of valuation. All became valuable partners for Safaricom.’ 50 There are different attitudes within the company to these external investments: some think Safaricom should be developing these businesses directly, while others understand the need to create new business partners. Internal investment has a chequered record. Three years after launching its own e-commerce platform, Masoko, Safaricom announced in November 2020 that it was dropping it and partnering with Jumia. The results of mobile–start-up partnerships have been mixed because the mobile operators have not always found it easy to fit disruptive businesses into their more mature (and slow moving) business groups. Mobile

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operators themselves are not always good at innovation. As Bob Collymore, former CEO of Safaricom, told an iHub event in May 2016: On a scale of one to ten for innovation, I would give us a two. We’ve only really done three really innovative things – one is obviously M-Pesa, the other is M-Shwari [that allows customers to access loans on their mobile accounts]. The third is basically tinkering with small products here and there, like advances on mobile airtime.51

He acknowledged that Safaricom was ‘a little bit more open than we used to be’ when it came to developers plugging into their system. He hoped to make M-Pesa into a platform for innovation. Involvement with start-ups always seems to be a side-bet so as not to miss something, rather than strategically central. It has been observed that ‘These are balance sheet investments. They are opportunistic rather than according to a plan by the CEO and there is not a clear focus.’ 52 While Orange is looking towards 2050, when partnerships with start-ups in the areas of ‘mobile payment, agriculture and energy will be generating more [revenues] than connectivity’, its shareholders may be more focused on more immediate returns.53 Challenges facing home-grown African start-ups Sub-Saharan African start-ups face several very challenging local circumstances, including: fragmented markets, levels of innovation, differences in culture and age, gender and income. While the growing number of mobile internet users looks like a large market opportunity, the numbers can be deceptive: only a small proportion of total mobile internet customers make use of it on a daily basis. In addition, although the number of smartphone users has grown, only a proportion are completely comfortable enough with their phone to download new apps and can meet the data costs of doing so. Likewise, out of the total number of (growing) smartphone users, even relatively successful products and services may attract relatively low take-up, usually a small percentage of the potential market. These realities are indicative of the fact that only a relatively small number of

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sub-Saharan African countries have both the population and wealth levels needed to support tech-enabled start-up launches. This informs the shape of the sector: in 2016 Zambian incubator Bongo Hive went from supporting just tech-enabled businesses to any type of start-ups: ‘The transition to generic start-ups has happened because mobile apps alone will not offer sufficient opportunities for entrepreneurs to make money.’ 54 The most perceptive start-up founders appreciate these difficulties only too well: there was never a time when we thought we would be a Nairobi business. The economics don’t work … You need huge scale to become profitable … There’s no version of our story where we end up as a barber shop. We’re either going to scale very big or we’ll die a glorious death.55

Others have sought multi-country presence through mergers: for example, Kenyan start-up MumsVillage merged with Baby Bliss in Nigeria in 2020: ‘I’ve always seen Mums Village as Pan-African … With Bliss Group, I had met one of the investors in it. I shared ideas with him and we found out we had a similar vision. It’s hard to build one market at a time.’ 56 The difficulty is that many sub-Saharan African start-up founders are young and lack the experience of working across several African countries. The business environments of each country tend to be different, making it hard not to end up with a collection of ‘local’ businesses rather than achieving economies of scale. Many Kenyan start-ups talk about proving their idea in Kenya and then rolling out across borders to neighbouring East African countries, but few actually manage to achieve this. The African Continental Free Trade Area (AfCFTA), launched in 2018, is addressing these kinds of trade barriers, but its implementation will be a decades-long process. Innovation and start-up disruption A lot of successful South African startups aren’t doing well across Africa – but they’re doing well globally. We don’t look to imitate; we innovate. I think we should be asking how we can get our companies to penetrate global markets.57 232

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In sub-Saharan Africa, innovation is about providing something that has not existed before, rather than about disrupting an existing industry: It’s about filling a demand gap rather than creating a disruption. It’s creating a utility service level for the underserved or unserved. It’s about giving Africans what they can’t currently get from Government or the private sector, where there’s no access to services. Currently it is limited by internet access but that will change.58 We need to be disruptive with innovation. Sub-Saharan African countries can disrupt because there’s no legacy in areas like health, education, energy and feeding. People can be seen in a new way. We can become the lab of the world. The baseline of Jokko Labs is social change. We need to find guys crazy enough to do these things.59

What counts as innovation in the African context, and who is it for? Is it a problem that African start-ups copy ideas from the developed world? Or, are they innovative because those ideas are new to them? Many African start-ups simply aim to produce knock-offs of European ideas in the hope they will be acquired, or invested in. This is what Erik Hersman has described as ‘scratching at fleas versus solving lion-sized problems’.60 But there are very few start-up ideas that appeal to both the African digital, urban middle classes and those who are less well off, in the way that M-Pesa has done (see Chapter 4). The appeal of start-up disruption in European or North American contexts is the absolute belief of its promoters that ‘tech’ can change everything. Uber will not just automate taxi riding but fundamentally change the transport system. In the sub-Saharan African context, this slightly hubristic rhetoric is much more muted. Kenyan traffic information start-up MA3Route can tell you where the traffic jams are in Nairobi but it makes no claims about changing the shape of the problem. In Kenya, Egyptian transport start-up Swvl and local ride-hailing company Little offered more modern, safer, better-equipped buses. But in October 2019 transport regulator National Transport Safety Authority insisted that both companies should acquire Public Service Vehicle licences, which meant having a fleet of a minimum of at least thirty vehicles, creating an entry barrier for innovative start-ups. 233

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For understandable reasons, few African start-ups have created significant intellectual property for themselves. Their value lies in the number of customers they have attracted or in software they have created. This, unfortunately, in many cases might easily be replicated by others: ‘We don’t think the next Google will come out of Africa. There’s not a sufficient level of engineering skills. The opportunities will come out of a deep understanding of local problems. It’s no good just importing ideas and tweaking them.’ 61 An IDRC study in 2016 that looked at the size of start-up communities in different countries found that there were discrepancies between these communities in countries with broadly similar population sizes and economies: for example, Tanzania and Kenya: ‘The reasons for these disparities are many and complex but they cannot just be explained by economic circumstances. One reason that is little discussed is the importance of cultural differences and attitudes, both between countries and within countries themselves between different ethnic groupings.’ 62 Another example of these discrepancies was provided by the Global Entrepreneurship Monitor (GEM)63 in 2016, which showed that the percentage of youth in South Africa starting businesses was lower than that of eight other subSaharan African countries, despite the country’s high youth unemployment rate. Different countries seem to have different strengths: one venture capital investor has said: ‘Our ideal entrepreneur has Nigerian hustle, Ghanaian integrity and Kenyan smoothness.’ 64 The links in the following note give a flavour of some of the issues involved.65 But it is not just cultures and languages that differ between countries: attitudes to business are also very different to those found in many European countries or the US. These are often characterised by what one writer has described as ‘mindsets of scarcity’. The ‘hustle’ was born in many African countries out of short-term economic insecurity. People often talk of having ‘side hustles’: ‘The Kenyan worldview favors multiple ventures under management at the same time.’ 66 But, ‘If hustling is your standard mode of operation, then you have a big problem.’ 67 It is telling that what the Nigerians refer to as a ‘hustle’, is ‘gombos’ in Côte d’Ivoire and Cameroon, which also uses the expression ‘jonglage’. These all refer to unstable, 234

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informal, precarious jobs. An academic assessment for the Tony Elumelu Foundation Entrepreneurship Programme (TEEP), the largest entrepreneurship programme in sub-Saharan Africa, highlights the issue: Jérémie S., Ivoirian, participated in several entrepreneurship programmes and his project has been rewarded multiple times. Yet, his project, developed since 2011, has not been implemented. The company he administratively created to receive the TEEP funding is mainly used for other activities, such as importing electronic devices from China to Côte d’Ivoire … respondents seem to maintain co-dependent activities, even though one of them, usually the one they submitted to the Tony Elumelu Foundation, is seen as a promise of success.68

A 2016 study found that between 70% and 90% of incubator community members across nineteen organisations were aged below thirty. Seventy-six per cent of TEEP applicants were under thirty. The dilemma for anyone just out of education is that they have little or no work experience of any kind.69 This lack experience is often all too painfully obvious to potential customers and investors, a barrier that is reinforced by African attitudes to the young. It is almost as if a cohort of amateur volunteers were to compete in the Olympics: ‘The start-up ecosystem is young. It needs more time. It needs people moving between jobs so that they get experience and skills.’ 70 Start-up opportunities are not open to all. For example, women were only 10–35% of those supported by nineteen incubators in the 2016 study quoted above. The proportion supported by the TEEP in 2015 was 24%. These percentages are ‘orders of magnitude’ rather than precise numbers, but sufficiently reflect the wider reality of the start-up sector at the time. Even in 2019, only 10% of the West African start-ups that cumulatively raised US$1 million had at least one female co-founder.71 The early start-up entrepreneurs were often those who had all the advantages in the first place: ‘The first wave of [Senegalese] entrepreneurs were mainly people from wealthier backgrounds who could live with Mum and Dad while developing the business. The subsequent waves were from business schools and the rest died. It’s much more professional now. Start-ups are backed by venture capitalists and they are not always Senegalese.’ 72 235

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International start-ups opening up African markets The story of sub-Saharan Africa’s digital journey is not just about local African start-ups but also about the impact of much larger start-ups from across the globe. All of the largest US ‘tech’ companies have a significant presence in sub-Saharan Africa: Apple (Apple Music), Facebook, Google and Microsoft.73 Other international start-ups with a presence include: Airbnb, Bolt, Eskimi, Frontier Car Group, Jumia, LinkedIn, Lyft, Netflix, TikTok and Zomato. The following sections look at the experiences of Jumia and Uber and how they have adapted their international offer to the cultures of the continent.

Buying and selling: Africa’s e-commerce Herman Singh, MTN’s then group executive, Innovation Strategy, was pitching the company’s vision in 2018. The percentages for online transactions were China, 9.4%, the UK, 15.7% and India, 2.6% – much higher than those for Africa, 0.5%. MTN had invested in Jumia74 – ‘the largest e-commerce play on the continent’ – because it saw e-commerce as a way of leapfrogging ‘bricks and mortar’, with huge consumer benefits: ‘We’re a telco talking about e-commerce. This is not our core business. We got into it because no-one else wanted to get into it.’ 75 (In April 2019 MTN announced that it would sell half of its 19% stake in Jumia as part of its strategy to focus on its core business.) Retail in most sub-Saharan African countries is still largely provided by the informal sector, which in 2015 accounted for 96% of sales in Ghana and 98% in Nigeria and Cameroon.76 Potential African customers often have no way of knowing whether a small, informal shop or market stall has what they want in stock, or whether the branded goods are genuine. In the context of a lack of formal retailing, the continent’s biggest e-commerce company, Jumia, described itself as ‘one of the biggest retailers in Nigeria’.77 It was launched in Nigeria in 2012 by two ex-McKinsey consultants, Jeremy Hodera and Sacha Poignonnec: ‘Nigeria is a challenging country. We see challenges as opportunities because it makes it more 236

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difficult for [other] companies to operate and find customers.’ 78 Over the years it has employed some of the ‘best and brightest’, including a significant number of women. It started with operations in twenty-three African countries and nine different brands. It has subsequently closed many of these operations: ‘I launched [Jumia operations] in six to seven [of these twenty-three] countries … Lots of these markets ended up being shut down. The [early] model was highly questionable … In some markets the sellers didn’t have e-mails.’ 79 It now operates in eleven countries, seven of which are in sub-Saharan Africa. It has also focused on a single brand name, Jumia, but it also operates several different services, including JumiaPay. Its retail offer has gone from direct sales to a much larger element of ‘marketplace’. Data for 2014 suggests that 50% of its customers accessed Jumia Nigeria using a mobile; the rest, on other devices. (Payment is made on the doorstep at the time of delivery.) Only 10% of its payments were made online, but when orders were delivered many chose credit card payments, bringing the total of non-cash payments to a claimed 50% of its income. The top three items sold were mobile phones, fashion and entry-level household appliances (such as kettles and blenders).80 By 2018, 79% of customers accessed the service using a mobile phone, 18% using a desktop computer or laptop and 3% a tablet.81 Online payments were still in the minority: 67% customers paid in cash on the doorstep when the goods arrived, 23% paid by credit or debit card and 10% used mobile money. A disinclination to pay online was also true in Côte d’Ivoire, but more so: ‘The vast majority is paid cash on delivery. There is such a history of credit card fraud [in Côte d’Ivoire] that we have not invested in this platform … people will not trust e-commerce.’ 82 Most orders came from desktop or laptop computers, but ‘mobile has huge potential’. Jumia’s top-selling goods in Côte d’Ivoire in 2015 were fashion, electronic goods and phones (mainly smartphones). Jumia’s country manager in Senegal, Mohamed Hapte Sow, left a good job as head of e-commerce and digital marketing for Nespresso, to return to his country of birth: ‘I came from working in a very clean, perfect world. In Senegal there were many challenges. I hadn’t been in Senegal 237

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properly for twenty years. People in Canada were saying: “why are you going back?”’ 83 Sixty per cent of people order on a mobile phone, and the balance on a desktop computer or laptop. Ninety-six per cent pay cash on the doorstep as the delivery arrives. Jumia Senegal’s website has 11.5 million sessions monthly. Its marketplace, where external companies offer goods, is 90% of its business: ‘They want to see inexpensive products. Now it’s air conditioners, shoes and watches.’ During COVID-19, Jumia Senegal found some traction for its food delivery business and has relaunched it: ‘Restaurants now want to work with us.’ Jumia Senegal’s CEO, Sow, sees its diversity of goods and price transparency as the things that will persuade people to use its services: When we started here, we were the first to display prices on billboards. People buying and selling won’t say prices. If you go on our platform, you know we have the right prices. You trust us because we work with legitimate distributors. Sellers are coming to us to propose products on the website. It’s a classic, everything store.

Jumia went public on the New York Stock Exchange in April 2019, raising US$196 million. However, eight years after launching, the company is still making losses: €28 million in Q3, 2020. An imperfect comparison is with Amazon, which took seven years to make a profit and fourteen years to make substantial profits. How long will it take for Jumia to break even? It has 6.7 million annual customers, but many of them are probably in the wealthier North African countries. The annual user figures that it publishes give no sense of how many of its customers are regular weekly or monthly users. Thus far, the dream is a long way off the reality. In 2015, founder Sacha Poignonnenc speculated what the market would look like in five to ten years (between 2020 and 25): The share of e-commerce may be higher than in the Western World because for example of the shortcomings in the retail sector. Online will be a significant share of business for the people we deal with like distributors, taxi drivers and hotel owners. It will shape the way they do business, not only on the Internet, making them run their businesses more efficiently. Lots of new companies will come online.84 238

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One of the Jumia’s previous investors, Kinnevik, who had also supported mobile operator Millicom, also put money into a Nigerian e-commerce operation, Konga, that competed with Jumia. It threw in the towel on Konga in 2018 and merged it with Yudala, run by the son of the founder of Zinox, a Nigeria computer assembler. Its failure gives some idea of the hill that Jumia is seeking to climb. Trust is a two-way street, it emerged that Konga had a pretty high level of untrustworthy customers: ‘The total customer pool is 750,000 (of which 200,000 were active users) and it has had to exclude 150,000 customers for “unacceptable behavior”.’ 85 According to a former employee: Staff are low-skilled, steal and there’s a high turnover. The support of systems is expensive. With returns, you have to deal with them … There’s all kind of systemic issues … There’s the vagaries of the money system, crime, the police. The environment is extremely harsh to build something nice and sparkly … You’re often selling things you don’t have. We would send a vehicle to the market to buy at 10% above the selling price and then sell it. We didn’t have enough scale. We had no international agreements with clothes suppliers. We were going to China and paying in dollars.86

Outside the world of sub-Saharan African start-up e-commerce, informal sellers have simply gone on to social media platforms as a way to connect with customers: ‘The long tail of smaller businesses is massive … They’re selling stuff on Facebook all the time.’ 87 African users have adopted platforms they are comfortable with to sell: ‘My Dad is a tailor at Kenyatta Market so he uses it for marketing and selling through WhatsApp and emails.’ 88 Ride-hailing in Africa In 2013, Rocket Internet-backed Brazilian start-up Easy Taxi decided to expand into Ghana, Kenya and Nigeria. Bankole Cardoso returned from the US and got a job with Easy Taxi in Nigeria: I was appointed on Friday, I had a weekend and on Monday I was meeting taxi drivers to tell them about this ‘invisible’ Easy Taxi app. Luckily for me my Mum gave me her driver who spoke Yoruba. He had lived all over the world and was able to explain it to them.89 239

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Using the app on a journey-by-journey basis was completely alien:

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At the beginning, people were trying to keep drivers for hours as they had done in the past. We had to explain to multiple guys that you buy by trips. At the peak we had four to five hundred riders a day and sixty to seventy thousand users. It was quite promising. We were able to accept cash from the beginning but the drivers would collect cash and never remit our share.

International competitor Uber then came in with the advantage of a larger investment and a better app: ‘The Uber app was two way and it could tell you time and distance. We had to verify those with the driver. We were tiny compared to Brazil, so they never prioritised us. Changes to the app took months.’ 90 Easy Taxi quit Nigeria in January 2015. Uber opened its first African operation in South Africa. Its first employee, Alon Lits, was initially sceptical: There is real taxi culture in London or New York. In South Africa, you own your own vehicle. There’s also an incentive to go round the system. Just call up the driver rather than go through the app. They convinced me to some degree that the app and technology could overcome [these difficulties].91

Uber had a team of new country ‘launchers’, with experience of Uber’s existing operations. They had three objectives: firstly, hiring a team to hand over to; secondly, getting drivers on the platform; and thirdly, creating awareness to generate passengers. The ‘launchers’ started working out of a guesthouse where they were staying: Here’s the playbook plus US$500,000, go and open a country. It’s Uber 1.0 which is just launch without permission. It looks for the biggest two fleet operators. It incentivizes drivers to turn the app on and then always gives incentives to do the driving work. It had huge e-mail databases because people had signed up in advance to be part of it. There’s no chicken-and-egg. It was using ex-bankers, young people. I would represent Uber on huge deals and I would sign off on the fly.92

South Africa was the first country outside the US with three cities (Cape Town, Durban and Johannesburg) operational at one time: It was uniquely positioned for a product like Uber. On the driver side, there was very high unemployment and Uber was reliable in a city where you 240

Sub-Saharan African start-ups can get a cab in five minutes or less. Once you experienced the product for itself, it was like magic. You could see the car driving to you, during the trip and getting out.

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[…] What’s unique to Africa, compared to launching in London or New York, is the drivers are using smartphones for the first time. At one point we were the largest purchasers of iPhones with data for drivers. They would pay us back. Drivers in London and New York are comfortable using Google Maps, a touch screen, etc. As part of the on-boarding process, you needed to make sure they were comfortable with smartphones. The App didn’t have a turn-by-turn navigation system. You needed to zoom into the map and check with the GPS device.93

Functional literacy proved something of a challenge for the business model in some countries: ‘in several cities we visited, Uber drivers struggle to read maps and do not like to be paid through credit cards’.94 Uber launched in Nigeria in July 2014, followed by Kenya. Within six months, it had a hundred thousand users in Kenya:95 ‘The quality of the 3G network in countries is very important.’ 96 The Uber team in sub-Saharan Africa knew from the beginning a lot of drivers wanted to take cash. In May 2015 they started experimenting with cash: This was a swear word in Uber. The selling point was that it was cashless. It took a huge amount of convincing internally to test the product. In cities outside sub-Saharan Africa, they would have loved to try it because there was no access to credit cards or transacting online. I was talking to a TV anchor at CNBC and he was not comfortable transacting with a credit card online.97

Taking cash meant that the whole product flow had to be reinvented. It was piloted in Nairobi and Hyderabad, and launched within a month. Business increased three times over: ‘The benefit of Uber was that we can run experiments. Different profiles for riders: some yes to cash, some no. We saw more trips taken. Three months later we opened up the cash option to all our riders in Kenya in August 2019.’ 98 Soon afterwards the 241

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cash option was available in all markets. ‘It took off and now cash is 80% of our business in 80% of our markets. How do you collect that cash? Before we had so many incentives that we used to net it off against the incentives. As things got tighter, cash arrears started cropping up.’ Drivers were not paying commission to Uber on the fares taken in cash: It meant integrating mobile money to Uber Money. It took twelve months of deal making to do that globally. By then, there were huge cash arrears, hundreds of millions globally. US$50 million in eighteen to twenty-four months. We can’t collect it retrospectively if there is no mechanism to pay so we have had to write it off.99

The company experienced resistance from non-Uber drivers, particularly on the high-value routes – for example, to the airport in Johannesburg: It’s an industry that’s territorial. We had a challenge with the metered taxi industry. If you’re at the airport in Joburg and you wanted to get to Sandton, a metered taxi would cost R700 because the driver was costing in the empty leg back. With Uber X, it would cost R200–300 because of the efficiencies of the app … It’s not Uber or nothing. Taxis continue to exist. […]Each country has unique challenges and opportunities. We were adapting the product locally. We didn’t take a ‘same size fits all’ approach. We had a local team providing us with local insights and these were critical to the success of the business.100

Uber’s relative success in Africa has attracted others into the market, including Bolt, Russia’s InDriver and Kenya’s Little, which has expanded into four countries – Kenya, Tanzania, Uganda and Zambia. The many individual local competitors include: Kubinga and Tupuca (Angola), Zay Ride (Ethiopia), Oga Taxi and Jekalo (Nigeria), Africa Ride, Hailer and Jumpin Rides (South Africa), Okada and Boda Boda (Uganda). It is often hard to ascertain the scale of any of the local companies. In Angola, the first wave of growth was fuelled by international visitors: ‘When [ridehailing start-up] Kubinga and [food delivery start-up] Tupuca started in Angola its main users were expats or travellers. Over time they grew. There has been big growth with COVID-19.’ 101

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Future challenges for African start-ups: thinking about the deep market

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Even at the time of writing, the sub-Saharan African start-up ecosystem remains at an early stage. One international founder gave a good summary: There’s a fair dose of naivety and wishful thinking. The market is changing slower than people think it is. Think about the deep market. It has not moved over the last ten years. There are maybe two thousand jobs open in Kenya in a market of forty million. In Finland there are forty thousand jobs open in a country of five million.102

He talked about ‘not drinking the Kool Aid’ and knowing as you sell the story that ‘the markets are not moving as quickly as hoped’. ‘You lack things like payments providers. You have to solve systemic challenges all around you. You have to train guys all along the value chain. You have to work at a completely different level. The breadth of skills you need in a team is very different from [Europe].’ 103 The toughness of these barriers to digital growth is similar to the ICT4D deep challenges described at the end of Chapter 6: the addition of digital technologies does not by itself transform the prospects of either job seekers or small-plot farmers. The concluding chapter seeks to take stock of these complexities. Notes 1 Author interview, Ken Njoroge, 16 July 2020. 2 To offer SMS-based services. 3 ‘Arrival of mobile music downloads heralds the beginning of a real services sector in Africa’, Balancing Act’s News Update 501 (23 April 2010), www.balancingact-africa.com/news/telecoms-en/18391/arrival-of-mobilemusic-downloads-heralds-the-beginning-of-a-real-services-sector-in-africa (accessed 8 December 2021). 4 Author interview, Eline Blaauboer, 18 December 2020. 5 It is now no longer on the board and is now a passive investor. 6 Author interview, Ken Njoroge, 16 July 2020. 7 Ibid.

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Taking the long view 8 It also included Endeavour Catalyst and Satya Capital, ex-Celtel Mo Ibrahim’s fund. 9 K. Njoroge, ‘Jumping off the lion: after 18 years building Cellulant, it is time to transition …’, Medium (21 May 2021), https://medium.com/the-fireplace/ jumping-off-the-lion-28aed732152f (accessed 8 December 2021). 10 In all, twenty-one people were killed in the two-day attack. 11 R. Sobowale, ‘Why our co-founder, Akinboro, resigned; staff sacked – Cellulant’, Vanguard (25 September 2020), www.vanguardngr.com/2020/09/ why-our-co-founder-akinboro-resigned-staff-sacked-%E2%80%95-cellulant/ (accessed 8 December 2021). An external audit was carried out on the operation. 12 Njoroge, ‘Jumping off the lion’. 13 A. Wiener, Uncanny Valley (4th Estate, 2020). 14 N. Friederici, M. Graham and M. Wahome, Digital Entrepreneurship in Africa: How a Continent Is Escaping Silicon Valley’s Long Shadow (MIT Press, 2020). 15 Arvadyx, Explainer DC, Ghana Classifieds, Ghana Mall, ILS, Rancard and Soft Tribe (founded by Herman Chinery-Hess). 16 Ayisi Makatiani, Amolo Ngweno and Karaya Gachui. 17 Author interview, Ayisi Makatiani, 18 June 2020. 18 The founders, Bernard and Juliet Matthewman, later did a management buy-out and changed the name to Paynet, sold to Interswitch in 2015. 19 Author interview, Ayisi Makatiani, 18 June 2020. Eventually the ISP business was sold to South Africa’s Telkom in 2007. 20 Author interview, Ayisi Makatiani, 18 June 2020. 21 Author interview, Eline Blaauboer, 18 December 2020. 22 Author interview, Eric Osiakwan, Chanzo Capital, 15 July 2020. 23 Author interview, Erik Hersman, 1 July 2020. 24 S. Beletre, M. Dawes, S. Green, M. Lennon, C. Lewis, R. Southwood, K. Wong and A. Yedigaryan, Do mLabs Still Make a Difference? A Second Assessment (World Bank, 2017), p iii. 25 S. Levy, Facebook – The Inside Story (Penguin, 2020), p. 2. 26 T. Shapshak, ‘Africa will build the future says Zuckerberg, visits Kenya on first African trip’, Forbes (1 September 2016), www.forbes.com/sites/ tobyshapshak/2016/09/01/africa-will-build-the-future-says-zuckerbergvisits-kenya-on-first-african-trip/ (accessed 8 December 2021). 27 E-mail from Alex Perry, 27 January 2021. Also see http://content.time.com/ time/magazine/article/0,9171,2080702,00.html (accessed 7 December 2021). 28 Video interview, Nikolai Barnwell, 88mph, 21 May 2013, www.youtube.com/ watch?v=AhFBzDkH8og (accessed 8 December 2021). 29 Beletre et al., Do mLabs Still Make a Difference? p. iii. 30 Bar Camps are ad hoc gatherings born from the desire for people to share and learn in an open environment.

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Sub-Saharan African start-ups 31 T. Kelly, ‘Tech hubs across Africa: which will be the legacy-makers?’ ICD4, World Bank (30 April 2014), http://blogs.worldbank.org/ic4d/tech-hubsacross-africa-which-will-be-legacy-makers (accessed 8 December 2021) and BongoHive’s listing, https://africahubs.crowdmap.com/main (accessed 8 December 2021). 32 T. Shapshak, ‘Africa now has 643 tech hubs which play “pivotal” role for business’, Forbes (30 October 2019), www.forbes.com/sites/tobyshapshak/ 2019/10/30/africa-now-has-643-tech-hubs-which-play-pivotal-role-forbusiness/?sh=51eb969d4e15 (accessed 8 December 2021). 33 Author interview, Andrew Fassnidge, Africa Tech Summit, 29 June 2020. 34 2015 Report – Venture Finance in Africa (VC4Africa, 2015), www.slideshare. net/Zia505/2015-report-venture-finance-in-africa (accessed 8 December 2021). 35 ‘TLcom wants to put its US$40 million fund into African start-ups with a big idea that can scale across countries’, Digital Content Africa (July 2017), https://bit.ly/3ozB5Es (accessed 8 December 2021). 36 ‘Partech Ventures Africa Fund is looking to invest over US$100 million in Fintech, B2B segments and mobile internet services and offers door opening to corporates’, Digital Content Africa (July 2018), https://bit.ly/3ywH5SM (accessed 8 December 2021). 37 R. Southwood, Scoping Programmes and Initiatives for Youth and Women in the Tech Start-ups Sector in sub-Saharan Africa (IDRC, 2016) and Friederici et al., Digital Entrepreneurship in Africa. 38 VC4Africa SME Performance Index 2013 (VC4Africa, 2013), www.slideshare.net/ Zia505/vc4africa-sme-performance-index-2013-26934010 (accessed 8 December 2021). 39 Start-Up Survey Results – 2016 (Seed Engine, 2016), www.seedengine.co.za/ wp-content/uploads/2018/03/Seed_Academy_StartupSurveyResults2016.pdf (accessed 8 December 2021). 40 Start-Up Survey Results – 2016 (Seed Engine, 2016), www.seedengine.co.za/ wp-content/uploads/2018/03/Seed_Academy_StartupSurveyResults2016.pdf (accessed 8 December 2021). 41 T. Jackson and G. Mulligan, African Tech Start-ups Funding Report (Disrupt Africa, 2020). This data has been cited because the start-ups in the sample are ‘Africa-based and Africa-focused’. 42 www.statista.com/statistics/603796/south-africa-telecom-services-investment/ (accessed 8 December 2021). 43 Jackson and Mulligan, African Tech Start-ups Funding Report. 44 For an extreme comparison see Belton, Putin’s People. However, there are many examples, some of which have been explored in Chapter 7. For a fictional account in another context, see M. Hamid, How to Get Filthy Rich in Rising Asia (Penguin, 2013).

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Taking the long view 45 T. Oviosu, ‘Part 3: raising Paga’s first financing’, Medium (4 April 2019), https:// medium.com/@oviosu/part-3-raising-pagas-first-financing-60aa9b7fc929 (accessed 8 December 2021). 46 Video interview, Eghosa Omoigui, 22 May 2018, www.youtube.com/ watch?v=0d6hY73pNNE (accessed 8 December 2021). 47 T. Jackson, ‘7 universities backing African tech start-ups’, Disrupt Africa (29 July 2016), https://disrupt-africa.com/2016/07/29/7-universities-backingafrican-tech-startups/ (accessed 8 December 2021). 48 D. Mpala, ‘University incubators, hubs young African entrepreneurs should know about’, Ventureburn (26 July 2019), https://ventureburn.com/2019/07/ university-incubators-african-entrepreneurs/ (accessed 8 December 2021). 49 The other two are Airtel and Etisalat. 50 Author interview, Eline Blaauboer, 18 December 2020. 51 ‘Africa’s platforms become the new channels and jostle to become the platform of choice’, Balancing Act’s News Update 825 (11 November 2016), www.balancingact-africa.com/news/telecoms-en/38928/africas-platformsbecome-the-new-channels-and-jostle-to-become-the-platform-of-choice (accessed 8 December 2021). 52 ‘Africa’s mobile operators do start-ups – why and how they are getting to grips with a changing landscape’, Balancing Act’s News Update 877 (19 May 2017), www.balancingact-africa.com/news/telecoms-en/40781/africas-mobileoperators-do-start-ups-why-and-how-they-are-getting-to-grips-with-achanging-landscape (accessed 8 December 2021). 53 Ibid. 54 Southwood, Scoping Programmes and Initiatives. 55 A Kenyan ride-hailing company quoted in Friederici et al., Digital Entrepreneurship in Africa, p. 55. 56 Author interview, Isis Nyong’o, 4 September 2020. 57 ‘The great debate: why South Africa may be the best country to launch and scale your tech startup!’, MEST (26 July 2020), https://medium.com/the-gps/ the-great-debate-why-south-africa-may-be-the-best-country-to-launch-andscale-your-tech-startup-82cd14513af3 (accessed 8 December 2021). 58 ‘TLcom wants to put its US$40 million fund into African start-ups’. 59 Author interview, Karim Sy, JokkoLabs, 14 August 2020. 60 Author interview, Erik Hersman, 1 July 2020. 61 ‘TLcom wants to put its US$40 million fund into African start-ups’. 62 Southwood, Scoping Programmes and Initiatives. 63 GEM 2015/2016 GlobalReport (GEM, 2016), www.gemconsortium.org/report (accessed 8 December 2021). 64 Eghosa Omoigui, quoted in B. Ndemo and T. Weiss (eds), Digital Kenya (Palgrave Macmillan, 2017), p. 104. 65 ‘The birth of Africa’s francophone start-up ecosystem – the realities of different cultural heritages’, Innovation in Africa (April 2015), https://bit.ly/3u2Mgqk 246

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Sub-Saharan African start-ups (accessed 8 December 2021). Video interview, ‘African entrepreneurship – why culture matters with Rebecca Enonchong and Michael Ike’, 5 August 2015, www.youtube.com/watch?v=PLCqBHkVQBc (accessed 8 December 2021). 66 Ndemo and Weiss (eds), Digital Kenya, p. 395. 67 Ibid., p. 110. For a satirical take on the same topic, E. John, Be(com)ing Nigerian (Cassava Republic, 2019). 68 L-Y. Kouassi, The Figure of the Entrepreneur: Social Impact of TEEP Beneficiaries (IFRA-Nigeria, 2020), p. 35. 69 Video interview, Andrea Bohnstedt, Ratio magazine, on the challenges of SME investing and the African tech sector, 23 June 2014, www.youtube.com/ watch?v=8C08xsOqgYc (accessed 8 December 2021). At the end of this interview she discusses the lack of experience of many start-up founders and employees. 70 ‘TLcom wants to put its US$40 million fund into African start-ups’. 71 T. Kene-Okafor, ‘These investors want to back “ridiculously early” female-led African startups’, Tech Crunch (26 January 2021), https:// techcrunch.com/2021/01/26/these-investors-want-to-back-ridiculouslyearly-female-led-african-startups/ (accessed 8 December 2021). 72 Author interview, Sadibou Sow, 13 July 2020. 73 Amazon Web Services, a cloud provider, offers services on the continent and is based in Cape Town. 74 In 2015 there were three main shareholders in Jumia: Rocket Internet, Millicom and MTN. 75 ‘Africa Tech Summit London: Herman Singh, MTN on Africa’s largest e-commerce start-up and others on over-priced deals, the missing exits and just surviving’, Innovation in Africa (May 2018): https://bit.ly/3wrfFfA (accessed 8 December 2021). 76 African Powers of Retailing – New Horizons for Growth (Deloitte, 2015). 77 Video interview, Jeremy Doutte, Jumia Nigeria, 29 October 2014, www.youtube.com/watch?v=ZiIzeXCF4hU (accessed 8 December 2021). 78 Video interview, Sacha Poignonnec, 17 May 2015, www.youtube.com/ watch?v=FNpb3X6M4_c (accessed 8 December 2021). 79 Author interview, Elias Schulze, 24 August 2020. 80 Video interview, Jeremy Doutte, 29 October 2014, www.youtube.com/ watch?v=ZiIzeXCF4hU (accessed 8 December 2021). 81 Mobile Report Nigeria (Jumia, 2018), www.jumia.com.ng/sp-mobilereport-2018/ (accessed 8 December 2021). 82 Video interview, Francis Dufay, Jumia, 3 April 2015, www.youtube.com/ watch?v=3LPqGDCq-Oo (accessed 8 December 2021). 83 Author interview, Mohamed Hapte Sow, 19 August 2020. 84 ‘The growth of Africa’s e-commerce sector – the winners and losers as this habit takes hold’, Balancing Act’s News Update 758 (22 May 2015), www.balancingact-africa.com/news/telecoms-en/34026/the-growth-of247

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Taking the long view africas-e-commerce-sector-the-winners-and-losers-as-this-habit-takes-hold (accessed 8 December 2021). 85 ‘E-commerce in Nigeria: Konga weathers the recession and rolls out a grocery service to build deeper relationship with its customers’, Balancing Act’s News Update 886 (21 July 2017), www.balancingact-africa.com/news/ telecoms-en/41421/e-commerce-in-nigeria-konga-weathers-the-recession-androlls-out-a-grocery-service-to-build-deeper-relationship-with-its-customers (accessed 8 December 2021). 86 Author interview, former employee of Konga. 87 Author interview, Thomas Shoemaecker, formerly of Facebook, 19 August 2020. 88 ‘Four-country study of African internet users shines light on how they use it and the barriers to greater use’, Balancing Act’s News Update 888 (4 August 2017), www.balancingact-africa.com/news/telecoms-en/41512/ four-country-study-of-african-internet-users-shines-light-on-how-theyuse-it-and-the-barriers-to-greater-use (accessed 8 December 2021). 89 Author interview, Bankole Cardoso, formerly of Easy Taxi, 29 July 2020. 90 Ibid. 91 Author interview, Alon Lits, formerly of Uber, 14 August 2020. 92 Author interview, Justin Spratt, Uber, 27 July 2020. 93 Author interview, Alon Lits, 14 August 2020. 94 Friederici et al., Digital Entrepreneurship in Africa, p. 53. 95 ‘Uber’s sub-Saharan operation is coming up to an estimated million rides a week – no revenue share, no carrier billing’, Balancing Act’s News Update 855 (2 December 2016), www.balancingact-africa.com/news/telecoms-en/39137/ uber-s-sub-saharan-operation-is-coming-up-to-an-estimated-million-ridesa-week-no-revenue-share-no-carrier-billing (accessed 8 December 2021). 96 Author interview, Alon Lits, 14 August 2020. 97 Author interview, Justin Spratt, 27 July 2020. 98 Ibid. 99 Ibid. 100 Author interview, Alon Lits, 14 August 2020. 101 Author interview, Haymee Perez Coglee, 21 July 2020. 102 Author interview, Jussi Hinkkanen, Founder, Fuzu, 16 July 2020. 103 Ibid.

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9

Doing complexity: making sense of what has happened over thirty-five years

This concluding chapter describes the liberalisation success story, the money that drove change, wider access to news and entertainment and the continuing digital divide and concludes by focusing on four key behaviours – aspiration, individuality, sexual norms and trust – affected by the technologies dealt with in this book. The liberalisation success story The introduction of liberalisation and privatisation has been a political and economic struggle that has taken several decades already and still continues. At the time of writing, for example, the Ethiopian government was still going through the process of licensing its first private operators. Liberalisation and privatisation (see Chapter 1) have been not just hard-won debates within government but wider struggles that have involved both civil society and businesses. The patronage of jobs in state telecoms monopolies and the resources they have provided to some heads of state has made the latter reluctant to privatise these companies. Liberalisation has tended to be achieved more easily than privatisation. Unlike previous attempts at liberalisation and privatisation that were heavily opposed in other fields,1 after initial opposition the communications industry was largely welcomed2 and quickly delivered significant, conspicuous and widespread benefits. Liberalisation also opened up a world of new social and economic opportunities for sub-Saharan Africa’s citizens. 249

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The narrative of rising economic ‘success’ that the industry fostered drew in other investors, attracted by the idea that parts of sub-Saharan Africa had a growing middle-class and ‘bottom-of-the-pyramid’ opportunities. However, those who invested in middle-class investment sectors, like retail and Pay TV, got very mixed results for their money. Nevertheless, the ‘success story’ was infectious and had its effect on Africans themselves: ‘The mobile revolution has given hope to Africans that they too can be dynamic and innovative players in the global economy.’ 3 Overall, liberalisation brought new wealth to mobile operators, the wider business community and government. African start-ups took advantage of growing access to the internet to tackle both commercial and social opportunities, and to draw in unprecedented external investments (see Chapter 8). The mobile industry trade body, the GSMA, calculated that in 2019, mobile operators in sub-Saharan Africa paid US$16.7 billion in taxes. The pioneer in understanding the diffusion of technology was Rogers, who coined the now widely used phrase ‘early adopter’ and tracked adoption centred on the mathematically based Bell curve.4 But, this only partially explains what is described in Part I of this book. Demand for ways to communicate (in the form of mobile phones) was so pent up in subSaharan Africa (see Chapter 1) that, in every case, the pioneer providers beat their initial projections. The adoption of pre-paid mobile telephony effectively constitutes a case study in how to address ‘bottom-of-thepyramid’ markets. Price elasticity meant that as prices went down, large numbers of new users came on board. Mobile voice also fitted well into sub-Saharan Africa’s oral cultures. Individuals could pick up their mobile and speak to the person they wanted. Internet diffusion was a much more complicated process, as it required a whole set of market conditions to come together: cheaper wholesale supply of bandwidth and lower retail pricing, a cheaper mobile device and app uses (such as Facebook and WhatsApp) that resonated more with the social practices of sub-Saharan African cultures. The lengthy process of arriving at lower internet prices for users resulted from blockages at each stage in the value chain.5 But, once international 250

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fibre capacity was no longer sold through monopolies and international, wholesale prices started to go down, other obstructions became more evident. These included anything and everything, from the lack of competitive cross-border links (especially to landlocked countries), to the lack of low-price national wholesale fibre capacity, the absence of ‘last mile’ fibre networks in urban areas and the near complete lack of rural infrastructure (see Chapter 2). The example of pre-paid calling (Chapter 1) shows that innovations were key to shaping how Africans used mobile calling and internet services. Unusually, these innovations came from a number of different directions: users themselves, the mobile companies, African start-ups and the global social media companies. Innovations made by African users themselves, for example, included beeping (see Introduction), using airtime for cash transfer (Chapter 4) and early dual SIM phones. These practices were taken up and adapted by the mobile operators to create services and devices specifically intended for sub-Saharan African markets. In the early days, in their capacity as ‘market challengers’, mobile operators were open to innovation. But, as they became larger and more like ‘new incumbents’, they tended to become more bureaucratic and more inclined to act as gatekeepers in markets (Chapter 4). Start-ups in Africa have often used innovations derived from elsewhere, as well as seeking to define an ‘Africa-specific’ approach. The debate about what constitutes innovation continues, as neither side in the argument has yet provided sufficient practical proof (in terms of widespread business success) to clinch the argument (see Chapter 8). International donors have given funding to provide ‘proof of concept’ for services that have a social impact and to underwrite innovation ecosystems. Disruptive innovation always produces winners and losers. In the African context, the South African taxi drivers who burnt Uber drivers’ cars were unable to see how they themselves might benefit from its model of digital modernity.6 The ways in which start-up innovations challenged existing practices were different in developed and developing economies. For example, in the West, Amazon has taken a significant part of the market for what used to be sold in formal retail outlets. But innovators 251

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in Africa, inspired by Amazon – such as Jumia (Chapter 8) – are not competing with high streets or malls. They needed to create their own forms of distribution. Indeed, whole systems (including those for payments) had to be created from scratch. Companies including Google have had to alter their products to accelerate internet adoption in sub-Saharan Africa: Facebook, for example, has provided loan funding to companies providing cheap or free internet access (as supported by advertising). Moreover, the internet industry provided ideas about governance and business models (shared infrastructure and open access, for example) that changed how telecoms does business in Africa. These were often the result of lively policy discussions between operators, regulators, civil society and business (Chapters 2 and 6). The money that drove change The telecoms investment triggered by liberalisation and privatisation was part of a broader shift in investment in sub-Saharan Africa. Prior to the start of mobile roll-out, investment in Africa had been focused on the extraction and export of natural resources. Telecommunications was a key part of the shift to a different kind of investment that had wider economic impacts. The sector became the largest generator of foreign direct investment after the oil and gas industry (see Chapter 1) and was often a significant contributor to country gross domestic product (GDP).7 Even countries that would have previously frightened off international investors benefited: ‘The telecommunications sector can attract significant private investment, even in the immediate aftermath of conflict and during periods of conflict.’ 8 Mobile operators seemed to be able to build their way around such obstacles such as civil war in Congo-Brazzaville, DRC, Liberia, Somalia and Sierra Leone.9 In an interesting paradox, despite the complete absence of telecoms regulation, Somalia became one of Africa’s better-connected countries. The impacts of these investments differed from what had gone before. They generated more jobs and a wider range of skills. Multinational and

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local cadres of skilled Africans grew as operators expanded. Africans returned from the diaspora to work for mobile operators and start new businesses with skills acquired elsewhere. In 2019, the mobile sector in sub-Saharan Africa directly employed 650,000 people and provided 1.4 million people with informal jobs.10 MTN’s experience illustrates one company’s contribution to those employment figures. When it launched in Nigeria in 2001, it had three hundred employees (ninety of whom were expatriates). By 2004, this had risen to three thousand, and by 2020 it was employing 19,288, the overwhelming proportion of whom were Nigerian. In terms of indirect effects, the first wave of mobile voice roll-out resulted in millions of dollars of sales revenues going into the pockets of informal street sellers across the continent.11 As one mobile company manager observed: ‘When I arrived [in the country], everyone came to work on a bicycle or a motorbike. When I left, the car park was full of cars.’ 12 The sector’s investments had other unanticipated side-effects: the advertising spend from competing mobile operators fuelled the growth of Africa’s newly privatised broadcasters and their sponsorship created new, popular TV programmes.13 New digital marketing agencies thrived on advertising spend from the same source, as well as from finance and consumer brands. Two other sources of funding fuelled the changes described in this book: diaspora remittances from Africans, and aid funding from international donors. Remittance payments flowed in three different directions – from outside the continent into particular countries; between different countries on the continent; and within countries themselves, most often between the cities and rural areas. The scale of diaspora funds was, and remains, huge. As estimated percentages of GDP in 2020, these vary from 0.9% in Cameroon to 5.5% in Mali and 9.8% in Liberia, to 14.9% in Gambia. From the latest data in 2019, the actual sums ranged from US$123 million into Guinea-Bissau to US$20.97 billion into Nigeria.14 The introduction of mobile money services (Chapter 4) supported these financial transfers. On the one hand, it accelerated the direct receipt

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Taking the long view

of payments and made the exchange of funds between countries much easier. This applied equally to Basotho miners in South Africa, or Burkinabe seasonal cocoa workers in Côte d’Ivoire. On the other hand, competition between the money transfer services started by mobile operators drove down the fees charged to transfer cash and increased the amount arriving in Africa (Chapter 4). In 2020, the number of registered mobile money accounts in sub-Saharan Africa reached 548 million, of which 159 million were active accounts.15 The transformations brought about through this source of funding are best captured by an African mobile manager who was ‘scouting’ a village for a new network roll-out in Burkina Faso in the mid-2000s: I went on market day and saw a pizza place. They don’t eat pizza [I thought]. Then I saw houses built of cement. I thought something fishy’s happening. I saw a Western Union office. People are sending money home. Fifteen per cent of the young people are working on tomato farms in Italy and sending money home. It’s why they had a pizza place, and they did a very good pizza.16

Mobile money services facilitated these kinds of change. At its best, donor funding also contributed to significant parts of the shifts described in this book. Soft loans or investment funding made at favourable rates from the International Finance Corporation helped mobile operators such as Celtel (starting in 1994) and Africell (in 2015), and other related companies including Liquid Telecom (in 2021). Donor programmes (Chapter 6) encouraged liberalisation and privatisation in key markets in sub-Saharan Africa as well as opening up the internet. DfID’s support to Safaricom for M-Pesa enabled the creation of mobile money services. These continue to have help from both foundations and donors, particularly through the mobile industry body, the GSMA.17 World Bank policy and funding helped to create a much more equitable approach to the pricing of international cable capacity. The counterfactual is not that these things would never have happened in Africa without donor support, but they might have taken considerably longer and would have been more likely to remain dominated by monopoly suppliers. 254

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One of the recurring themes of this book is that technology change in the form of communications has brought about economic growth. From an early stage, there was much debate among sceptics18 and champions19 about what the impact of funding might be: ‘The World Bank at the time was trying to understand the broader macroeconomics of these technologies but wary of “shiny object syndrome”’ 20 (see Chapters 2 and 6). A 2009 report concluded that a 10% increase in fixed broadband would increase developing economies’ GDP growth by 1.38%.21 This assessment was written in support of funding international fibre cables (such as EASSy, Chapter 2), which were regarded as a ‘social-economic macro project’.22 The report focused on the relationship between broadband diffusion and GDP growth, although another factor – like government effectiveness – might have been as important, if harder to define. The World Bank’s expectation of a ‘10% increase in broadband’ became a much-quoted phrase at international meetings until it published another report on the same subject in 2016: In contrast to other findings that broadband has the biggest economic impact of all ICTs, simple 2G mobile penetration was found to have a bigger and more significant impact than fixed broadband on the Senegalese economy. Each 10 percentage point increase in mobile penetration was found to raise GDP growth by 0.44% (at a 10% significance level).23

A major difficulty with this kind of economic impact of technology work is that it is very hard to separate out the effects of specific technologies from other technologies and wider changes in society over time.

Wider access to news, information and entertainment One of these key societal changes has been wider access to mobile internet, which has both broadened and changed what can be done with phones. While it started with the urban elite and young digital natives, it spread more among the wider population in many African countries. YouTube and Facebook contributed substantially to these changes, allowing Africans to create and circulate their own local content. The majority might simply 255

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be disseminating someone else’s content, but these processes have resulted in the availability of a much wider range of news and entertainment. What users could not afford in terms of entertainment, they accessed via pirated content.24 This new digital space has often grown free from state controls, posing increased problems for Africa’s ruling elites. The new technologies provided people with opportunities to express opposition and organise politically that have developed over time. The widespread use of mobile phone and SMS in the early 2000s meant that these were initially perceived as a greater threat than the internet, which was used by relatively few people. In 2005, after a contested election, the Ethiopian government closed down SMS services for two years. In June 2019, during a period of political turmoil, it shut down both SMS and the internet. It was not the only government to do so. In 2010, during a period of food riots, Mozambique’s telecoms regulator, INCM, ordered the country’s two mobile operators to shut off SMS messaging for pre-paid customers.25 With the internet, information often moves faster and in more unpredictable ways and cannot easily be controlled. Internet shutdowns are a blunt instrument but are, sadly, becoming an established part of sub-Saharan Africa’s political landscape. However, the cost of these to daily GDP is significant,26 as are the social costs of denying citizens freedom of expression. Other political deterrents include taxes imposed on social media and online media owners (Chapter 5). Those without access to the new internet media become, more than ever, the ‘have-nots’ of this emerging digital world. The continuing digital divide How sub-Saharan Africa’s communications revolution feels to individuals or even groups of individuals over the thirty-five years since 1986 is very much a function of where they live (urban vs peri-urban vs rural), their income, their education (whether they are illiterate, semi-literate, highly literate or, indeed, technologically literate), their gender and what languages

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they speak. As Chapter 5 suggested, the digital divide encompasses many divisions.

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Geographic divides In terms of communications, there are multiple geographic divides, which reflect a complex layering of histories. The digital virtual domain requires physical connections and networks with spatial realities. In large part, these reflect earlier sea, road, rail and river colonial transport networks, built to carry extractive exports to the nearest port and on to the empire’s capital.27 Neighbouring former colonies of different empires were not well connected in transport terms, and sometimes it is easier to fly between countries via Europe, rather than directly. The introduction of local IXPs was conceived to avoid metropolitan round-trips for sending data, and to make it easier and cheaper to exchange data and information locally. However, large parts of the continent’s digital infrastructure are still located in former colonial, coastal cities. Without policy interventions, landlocked countries would have continued to be at a distinct disadvantage in terms of data costs. Indeed, some still remain the captives of coastal telecoms monopolies. Where the borders of former imperial powers have often acted as barriers, the new telecoms operators sought (early on) to create connections between countries, often before road connections were built.28 Celtel’s innovations included offering African cross-country roaming at affordable prices. The uneven spatial development of sub-Saharan Africa means that poorer areas get a much worse deal in terms of access to communications. A 2019 GSMA analysis of internet access found that an average of 25% of sub-Saharan Africans still have no access to the internet. This percentage varies from 15% in Ethiopia to 39% in Central African countries.29 By contrast, mobile calling is ubiquitous: there were 417 million unique mobile voice subscribers in sub-Saharan Africa in 2109. But even where there is internet coverage, the numbers of people not using it for reasons of cost, relevance and/or literacy are very high. Overall,

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49% of Africans in sub-Saharan Africa can access the internet, but do not: the percentage varies from 38% in Central African countries to 66% in Ethiopia. Overall, 26% of Africans use the internet. While network distribution, quality and speed of the internet have improved in urban areas, large disparities are evident outside major cities. Take, for example, the situation in the area around Gulu, the capital of Northern Uganda, in 2014: If there’s connectivity and power, an e-mail can take a matter of seconds to get from Uganda’s capital Kampala to the Northern region capital of Gulu. However, it can take 6 hours to do the drive … 5–10 kilometres outside of Gulu there is no power grid … All Uganda’s mobile operators have voice coverage in Gulu itself and this is pretty good but 5 kilometres out there are blackspots and there are extended areas of no coverage beyond that distance … 3G modems are the main source of connectivity for organizational users. Five minutes out of town you lose data coverage and further north there is only 2G coverage.30

By 2018, not much had changed: ‘Data networks in Northern Uganda are weak and unreliable even minutes outside the regional capitals. Much of northern Uganda, a remote and sparsely populated region, is still without access to fiber optic cables.’ 31 Across the continent, reaching people outside urban centres, in places like Gulu, will not be solved by the market alone. Technological innovation has, thus far, produced limited results: the closure of Google’s Loon internet delivery-by-balloon project in January 2021 was emblematic of this failure.32 It is possible that the Facebook-supported Telecom Infra Project, aimed at lowering the cost or rural mobile coverage, may be more effective over time.

Literacy and language Participating in voice, SMS and internet requires particular skills, including basic numeracy to dial numbers, literacy and numeracy to enter these in a phone address book. Basic literacy, for example, is necessary for typing SMS messages: predictive text alone is insufficient (see Chapter 5). 258

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Technological literacy is a hard term to define, but a Mozilla Foundation33 study in Kenya identified fifty-three digital skills needed by smartphone users,34 not least understanding a series of technical terms in English. Many sub-Saharan Africans do not have the years of experience of using the computer terminology found in developed countries and now part of smartphone use. Despite a significant amount of language localisation on phones, there are still many local languages – which users are more comfortable with – that are not available. In some countries, former colonial languages such as English and French are spoken by only very small percentages of the population. In Rwanda, only 5% of the population speak either language. Many African languages are primarily oral, so simply substituting them for an official written language is not always a realistic option for increasing access. Further, not all languages are equal when it comes to machine translation: Analysis shows there is a clear income gap in access. Google Translate is available in the languages spoken by just 54% of those living on less than $1.90 per day. The picture is even more stark for Natural Language Understanding frameworks such as Dialogflow, which supports languages spoken by only 3% of those living on less than $1.90 per day.35

Most popular languages, spoken across several countries, like Swahili,36 have experienced rapid growth for mobile app use. But many more remain invisible.

Digital gender inequality Gender inequality has many roots, which can be both economic, in the sense of being related to status, pay and jobs, and as well as social, in the sense of being related to the patriarchy. In some of the poorest countries on Earth in sub-Saharan Africa, women are doubly disadvantaged. As the UN Secretary-General, Antonio Gutteres, put it, poverty still has a woman’s face: ‘in Africa, as in many parts of the world, I have seen with my own eyes how women and girls are the main victims of conflict, the 259

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main victims of displacement and the main victims of violence in terms of instability’.37 Nine out of ten African women work in the informal sector, on family farm plots or in household enterprises.38 Mobile ownership was highly gendered in sub-Saharan Africa from the start: ‘In the early period, when handsets were expensive … [t] here was one phone per household and the man controlled it.’ 39 Even when internet use was expanding, a similar pattern of male dominance emerged. A 2012 study based on a range of data provides early evidence of the gender gap.40 Three years later, the Alliance for Affordable Internet carried out a survey of women in slum areas and informal settlements in Kampala, Lagos, Maputo, Nairobi and Yaounde. Their findings suggested that education level was the key determinant of internet use and that women are much less likely to be educated than men. The research identified three main barriers to internet use: know-how (34%), cost (16%) and relevance (14%). While women were less likely than men to go online and share their views on an important or controversial topic, there was little or no gender gap in the use of social media for keeping in touch with friends and family. Women experienced threats or bullying when on their phone or online: it varied from 8% in Lagos to 21% in Kampala.41 Based on 2019 data, although the gender gap in phone ownership and mobile internet has shrunk in various countries outside Africa, the same could not be said of sub-Saharan Africa.42 In a range of countries identified, the gender gap in phone ownership varied from 2% in Senegal to 15% in Uganda, and for mobile internet use from 9% in Senegal and South Africa to 17% in Kenya.43 The choices available to women have to be set within the domestic context: no matter how poor you are you still have a choice where you set your priorities so you can … trade between your phone costs versus your food costs versus your kids’ school fees costs. The head of household, the most powerful member of the household, has that possibility to choose, but the next person down in the household hierarchy chain doesn’t have that.44 260

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Nevertheless, whatever the gender gap in mobile phone use and whatever the harassment they received using it, women have benefited from mobiles through increased safety and security, access to cash and loans, saving time and money by communicating and accessing information: ‘The challenge is those women who are still without those benefits.’ 45 Ethnographic studies of countries in sub-Saharan Africa have highlighted how women’s experiences of the mobile phone differ from men’s. Archambault’s work46 on a small town in Mozambique in the early 2000s focuses on women’s use of the mobile phone for relationships and material advantages, which depended on getting airtime from men. In contrast, Abraham’s contribution to Women and ICT in Africa and the Middle East47 discusses Zambian women setting up an online forum, Welcome to Real Adults, to talk about sex, and Muller’s describes sexting by young women in Cape Town. Elsewhere, Nyamnjoh’s playful novella, Married but Available, also centres on gender relations around the mobile phone.48 These different contributions to the literature suggest how closely mobile calling and internet use is entwined with family life and relationships. However, other accounts suggest that behaviours around attitudes to women’s use of mobiles and the internet reflect historic tropes, including the potential for threatening male behaviour. As Burrell made clear in her study of Ghanaian cyber-cafes: Sexual material was perceived … as a personal affront committed against [women], something intended to pollute or violate them. This was a problem they identified both in cyberspace and in the Internet cafés themselves … women typically spoke about pornography and sexual content as being imposed on them by male chat partners.49

A 2020 study of the internet in Africa, written from a feminist perspective, describes it as ‘the embodiment of old systems of oppression and violence … Discriminatory gendered practices are shaped by social, economic, cultural and political structures in the physical world and are similarly reproduced online across digital platforms.’ As a result of negative encounters, the online lived experiences of women ‘fundamentally impact 261

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how women navigate and utilize the internet’.50 The technologies are found to have opened women to greater levels of male aggression. In some places and in some cases it has become worse: ‘Gender-based violence has increased. There is lots of online abuse to women, including rape and death threats. Economic improvements did not translate necessarily into better conditions for women.’ 51 All of these divides need to be set against the question of whether there have been changes of behaviour – both positive and negative – associated with mobile calling and internet. Technologies and key changes in behaviours The examples considered – aspiration, individuality, sexual norms, trust and online consumption – illustrate of some of the ways in which technology and behaviour have interacted, including the persistence of existing behaviours. It has been argued that the communications technologies discussed here accelerate and emphasise particular aspects of a country’s or an individual’s culture. So, for example, the mobile phone is inherently an amplifier of personal expression and becomes a way in which users present themselves.52 The same might be said of individuals’ use of the internet and social media. Aspiration and rising expectations The mobile phone and the ‘success stories’ related to it fed a narrative of upward mobility, according to which mobile operators ‘began to dominate the “mind-space” of the continent through the aspirational images they projected on the billboards of Africa’s towns and cities’.53 The content of much of this brand-building advertising has been consistently selfimproving over the three decades that this book covers: Celtel’s campaign, ‘Making Life Better (La Vie en Mieux)’, MTN’s South African strapline with Go (‘There’s a way. Go find it’ and ‘Go Change the World’), Glo’s ‘Move to Greener Pastures’, and right up to the present day’s ‘There’s More Within’ from MTN Nigeria. It can be argued that even if not everyone 262

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believed them, these messages provided a narrative and backdrop that chimed with a period of considerable economic and social change. By definition, as a consumer device that was affordable by all but the poorest, the mobile phone was the aspirational object. A 2012 study of Ghana, Malawi and South Africa recognised that ‘for millions of very poor children and young people, the mobile phone is now perceived as an essential requisite: an object of desire and a symbol of success’. A Malawian schoolboy surveyed described how ‘My parents show me people carrying mobile phones in their hands and [mother tells] me she wants me to be like them.’ 54 While shared phone ownership might privilege the head of the household, at least it allowed others access to this object of desire. For both the rich and the poor, the mobile phone is a status symbol and an economic tool: young people have harnessed the phone for self-fashioning, as the phone is used to express aspects of one’s identity … I often heard young people ask rhetorically: ‘Why do we need fancy phones if the objective is communication?’ Yet many of these same young people would eventually admit that, were they ever to come into money, they would definitely invest in a superior model.55

The transition to mobile phones that provided internet – particularly smartphones – ‘was the perfect combination of a folk model of rational choice theory … sifted through a moralistic sieve’.56 Earlier versions of this kind of aspirational modernity in Africa – including the post-independence government buildings everywhere from Gaborone to Yaounde, which were usually designed by European architects – are now gently decaying. They are beginning to be replaced by new kinds of modernity: these include the mobile phone and new digital services, which were often launched by African start-ups. Ideas of digital modernity took fictional form in the Hollywood hit, Black Panther (2018), featuring a make-believe, technologically advanced African country. Social media interactions from a range of African countries after the film’s release showed that many people found its imagined African country more inspiring than the visions proposed by local politicians. 263

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Individualism vs family and ethnic grouping Neoliberal free markets in telecoms and internet created millions of new consumers and conveyed the idea of individual choice as opposed to something determined by family or ethnicity. The one did not remotely supersede the other,57 but created tensions that, among other things, made people more demanding.58 Their rights as citizens might be circumscribed but, as consumers, they could demand more of their mobile provider. The technology also enabled individuals to make their own listening and viewing choices that no longer had to defer to those of the family or the village (see Chapter 5). However, there are limitations: These are very traditional and respectful societies. It’s generalising, but I’ve seen it in a number of countries. It’s about respecting family, elders and church, and it’s hard to translate this into a challenging individualism. African societies [in my experience] are fundamentally different from the rugged individualism of the US.59

Undermining moral values The use of the mobile phone, internet and social media have all become lightning rods in different countries’ discussions about morality and sexual norms. In a detailed seven-country research study, undertaken in 2014, some participants regarded the possibility of expanding the nature of public debate to include such topics as being gay and prostitution as positive. However, interviewees with religious views were more inclined to regard social media as a waste of time and likely to undermine moral values and damage their country’s culture. A Ghanaian pastor, for example, observed: ‘[You can] spend the whole day on Facebook without reading your Bible. You really have to discipline yourself.’ A self-described entrepreneur disparaged his wife’s use of social media: ‘Something like WhatsApp, my wife spends the whole day on it. And I tell her she’s wasting a whole day on this thing, I just can’t believe it.’ 60 The largely unmoderated character of social media caused particular unease: ‘I am observing that people 264

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are abusing social media like Facebook. If things continue in this way, I think it will cause many bad things to happen in the society.’ Nevertheless, in 2021 a simple search of Facebook uncovered a significant number of religious Facebook pages with both local and national followings.61 While the underlying fears doubtless persist, even these research participants understood the internet as ‘bringing [their country] closer to the world’.62 A lack of trust Trust is crucial for the functioning of a whole range of digital behaviours, both social and economic: the lack of it affects the use of both mobile money and e-commerce. These include mobile money services, e-commerce, dating and the sharing economy. The early promise of the technologies described in this book often fell short because people fitted technology around their existing behaviours. Trust was – and often still is – in short supply in many sub-Saharan African countries. A study of the cloth trade in Northern Nigeria, for example, focused on this in particular, and found that those involved needed to maintain some aspects of their previous professional practices. This research found that there was ‘a continuing need for journeys and physical meetings due to issues of trust, design intensity, physical inspection and exchange, and interaction complexity’ (emphasis added). There were ‘few signs of … de-localization or disintermediation’. It concluded that ‘An economizing effect of mobile phones on supply chain processes may therefore co-exist with the entrenchment of supply chain structures and a growing “competitive divide” between those with and without access to telephony.’ 63 A similar pattern of building upon, but modifying, existing behaviours informs another early study of the use of mobiles. In this case the phones are regarded as enhancing social capital (see Chapter 1): mobiles were facilitating participation in social networks, helping to maintain both strong and weak links, including participation in community group activity. They were thus enabling people to invest in and draw on social 265

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capital. There was evidence to suggest that mobile phone owners were more willing to invest in social capital and to draw on it. Mobile owners were significantly more likely to be members of community groups such as religious organizations, sports teams and political parties, in both surveys (South Africa and Tanzania). In the Tanzania survey, there was also a statistically robust relationship between mobile ownership and willingness to help others in the community.64

However, the same research found that the use of mobile phones did not increase levels of trust: ‘for other social attitude questions, including measures of generalized trust, no solid relationship with mobile ownership or use was established’.65 Although there is a much wider acceptance of mobile money transfers, the majority of people in African countries still trust more in cash: ‘Shifting behaviours is difficult’ 66 (see Chapter 4). E-commerce operations also tend to be based on cash: the majority of customers want to physically see the goods they have ordered before paying for them (see Chapter 8). Moving away from using cash will not be a quick process: It will be the time it takes for a generation to change. Who is the customer in Africa? Who’s the average African? Ten years ago it was a women on a dusty road with two kinds of baskets of wood on her head. Today, it’s still a women but she’s in a city. Middle class, international-football watching, Facebook posting and listening to music. The eighteen to twenty-five generation will become the workforce and then the magic will happen. They are completely comfortable with technology and digital apps.67

The kinds of behaviours that destroy trust and create corruption may be affected by the use of online services. An intriguing if not decisive piece of research from the International Monetary Fund identified how perceptions of corruption are changed by online processes for tax collection. Based on a large-scale survey of twenty-six countries, it found that ‘the adoption of digital tools is correlated with a reduction of corruption perception in the tax administration by around 3 percentage points’. This reduction is based on the perception that online tax collection processes leave less room for bribes.68 266

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The changing of the guard: looking to Africa’s next-generation digital natives This book has argued that the rate of changing human behaviours is far slower than the introduction of new technologies. The ‘changing of the guard’ in terms of sub-Saharan Africa’s ‘digital natives coming to power’ will take a decade or more to materialise. What has transpired up to now might best be described as the ‘end of the beginning’. There is a considerable amount of unfinished business, including a growing lack of competition between mobile operators, commercial model challenges created by online and social media and the continuing digital divides in poorer peri-urban and rural areas. Successful mobile money services are de facto monopolies that are storing up challenges for the future. The most optimistic scenario for sub-Saharan Africa’s digital future is that the ‘changing of the guard’ will put African ‘digital natives’ into power, within the private sector and as consumers of the services described in Chapters 5 and 8. The start-up ecosystem has the potential to break the stranglehold of patronage capitalism, attract in more investment and create greater levels of local capital. In the absence of effective government, start-ups can fill demand gaps and create ‘a utility service level for the underserved or unserved’ (Chapter 8). As access to technology increasingly improves, the wider challenges to this optimistic scenario will be levels of trust in countries, the number of dishonest customers (as in the case of Konga, Chapter 8) and the ‘hustle’ mindsets that are deeply embedded across many African countries. Nevertheless, sub-Saharan Africa’s digital future could continue to transform the assumptions about what Africans can do, and seems to open out a very different future for the continent. Notes 1 An example: S. Ekine, ‘Africa: trapped in water privatization’, New Internationalist (20 June 2011), https://newint.org/blog/majority/2011/06/20/ africa-water-privatization (accessed 8 December 2021). 267

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Taking the long view 2 Except by the employees of telecoms incumbents. 3 Professor Calestous Juma quoted in D. Pilling, ‘African economy – the limits of leapfrogging’, Financial Times (13 August 2018), www.ft.com/content/052b0a3 4-9b1b-11e8-9702-5946bae86e6d (accessed 8 December 2021). 4 E.M. Rogers, Diffusion of Innovation (5th edn) (Free Press, 2003). 5 M. Porter, The Competitive Advantage – Creating and Sustaining Superior Performance (Free Press, 1985, republished 1998 with new introduction). 6 J. Burke, ‘Violence erupts between taxi and Uber drivers in Johannesburg’, Guardian (8 September 2017), www.theguardian.com/world/2017/sep/08/ violence-erupts-taxi-uber-drivers-johannesburg (accessed 8 December 2021). 7 See telecoms regulator NCC’s website, www.ncc.gov.ng/statistics-reports/ industry-overview#view-graphs-tables-8 (accessed 8 December 2021). 8 P. Guislain, M.A. Ampah, L. Besancon, C. Niang and A. Serot, Connecting sub-Saharan Africa (World Bank, 2005), p. 22. 9 Southwood, Less Walk, More Talk, chapter 6. 10 GSMA, The Mobile Economy – Sub-Saharan Africa 2020 (GSMA, 2020). 11 Southwood, Less Walk, More Talk, p. 42. 12 Ibid., p. xvi. 13 For the countries where there are analyses of advertising spend, mobile operators always top the list. 14 From a downloadable spreadsheet at www.knomad.org (accessed 8 December 2021). 15 GSMA, State of the Industry Report on Mobile Money 2021 (GSMA, 2021) 16 Author interview, Emily Macauley, 1 July 2020 17 For example, in 2010 USAID funded a programme called mWomen that continues to this day, and DfID funded several GSMA programmes. 18 C. Fink and C. Kenny, W(h)ither the Digital Divide? (ITU, 2003). 19 E. Adera, K. Diga, O. Mascarenhas, J. May and T.M. Waema (eds), ICT Pathways to Poverty Reduction: Empirical Evidence from East and South Africa (IDRC, 2014). 20 Author interview, Kerry McNamara, 3 August 2020. 21 ICT4D: Extending Reach and Increasing Impact (World Bank, 2009). 22 Author interview, WIOCC Chairman John Sihra, 28 July 2020. He recollected that this was how the World Bank saw the project. 23 M. Minges, Exploring the Relationship between Broadband and Economic Growth, Digital Dividends background paper (2016, World Bank), p. 12. 24 See also Y.L. Womack, Afrofuturism: The World of Black Science Fiction and Fantasy Culture (Lawrence Hill Books, 2013). 25 ‘Mozambique “blocked texts” during food riots’, BBC News (14 September 2010), www.bbc.co.uk/news/world-africa-11300211 (accessed 8 December 2021). 26 There are several reports assessing the economic damage, the most recent of which is The Economic Impact of Disruptions to Internet Connectivity 268

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Doing complexity (Global Network Initiative, 2019), https://globalnetworkinitiative.org/ %E2%80%8Bnew-report-reveals-the-economic-costs-of-internet-shutdowns/ (accessed 8 December 2021). 27 ‘Newly developed networks do not eradicate earlier ones but are superimposed on top of them’; H. Lefebvre, The Production of Space (Blackwell, 1991), quoted in B.Larkin, Signal and Noise (Duke University Press, 2008), p. 6. 28 Southwood, Less Walk, More Talk, p. 124 and ‘Many rivers to cross’, The Economist (5 July 2014), www.economist.com/business/2014/07/05/manyrivers-to-cross (accessed 8 December 2021). 29 GSMA, The Mobile Economy. 30 ‘Welcome to Gulu – what it feels like being an internet user at the edge of the network’, Balancing Act’s News Update 671 (6 September 2013), www.balancingact-africa.com/news/telecoms-en/28851/welcome-to-gulu-whatit-feels-like-being-an-internet-user-at-the-edge-of-the-network (accessed 8 December 2021). 31 M.L. Driciru and M. Lidman, ‘Church provides internet in northern Uganda, connects more than computers’, National Catholic Reporter (6 January 2018), www.ncronline.org/news/world/church-provides-internet-northern-ugandaconnects-more-computers (accessed 8 December 2021). 32 M. Singh, ‘Alphabet shuts down Loon internet balloon company’, Tech Crunch (22 January 2021), https://techcrunch.com/2021/01/21/google-alphabet-isshutting-down-loon-internet/?guccounter=1&guce_referrer=aHR0cHM6Ly93 d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAL9s4K48CoJO5N6Os619K5g1eb8RuTYsd3Mej3ghQibVVsvRJef8MEmYjLHGkpqqfiJBS42q4f4OUj irXGVqhZNCc8DA4MCYzAGXtbIqrr-j0ILAZc9SXVHcizc04Rd_Nigom7YpvOP_aw3Z9XUhJOKfgtxePMNlQphaOrO_bxR (accessed 8 December 2021). 33 Mozilla is a global nonprofit dedicated to keeping the internet a global public resource that is open and accessible to all. 34 Mozilla, Stepping into Digital Life – A 2016 Digital Survey of Kenya (Mozilla, 2016), p. 7, https://d20x8vt12bnfa2.cloudfront.net/reports/Stepping+Into+Digital+Life++Digital+Skills+Observatory+Research+Report.pdf (accessed 8 December 2021). 35 G. Barrie et al., Conversational Interfaces, p. 10.f 36 It has several different forms. 37 ‘Despite gains, poverty “still has a woman’s face” Secretary-General tells highlevel meeting on gender equality, women’s empowerment in Africa’, United Nations (8 February 2020), www.un.org/press/en/2020/sgsm19962.doc.htm (accessed 8 December 2021). 38 A. Woldemichael, ‘Closing the gender gap in African labor markets is good economics’, Brookings (23 January 2020), www.brookings.edu/blog/africa-infocus/2020/01/23/closing-the-gender-gap-in-african-labor-markets-is-goodeconomics/ (accessed 8 December 2021). 39 Author interview, Anriette Esterhuysen, 1 June 2020. 269

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Taking the long view 40 M. Deen-Swarray, A. Gillwald, S. Khan and A. Morrell, Lifting the veil on ICT gender indicators in Africa (Research ICT Africa, 2012), p. 29, figure 11 and p. 32, figure 14. 41 Women’s Rights Online: Translating Access into Empowerment (World Wide Web Foundation, 2015), https://webfoundation.org/research/womens-rightsonline-2015/ (accessed 8 December 2021). 42 GSMA, The Mobile Gender Gap Report 2020 (GSMA, 2020). 43 Ibid., figure 2. 44 Jane Coffin in Bailur et al., Digital Lives in Ghana, p. 77. 45 Author interview with Claire Sibthorpe, GSMA, 22 June 2020. 46 J.S. Archambault, Mobile Secrets: Youth, Intimacy, and the Politics of Pretense in Mozambique (University of Chicago Press, 2017). 47 I. Buskens and A. Webb (eds), Women and ICT in Africa and the Middle East – Changing Selves, Changing Societies (Zed Press, 2014). 48 See opening extract in Brinkman et al., Mobile Phones. 49 J.R. Burrell, ‘Producing the internet and development: an ethnography of internet café use in Accra, Ghana’, (LSE PhD thesis, LSE, 2012) p. 87, http:// etheses.lse.ac.uk/636/ (accessed 8 December 2021). 50 N. Iyer, B. Nyamwire and S. Nabulega, Alternate Realities, Alternate Internets – African Feminist Research for a Feminist Internet (APC, 2020), p. 3. 51 Author interview, Anriette Esterhuysen, 1 June 2020. 52 J.E. Katz (ed.), Magic in the Air: Mobile Communication and the Transformation of Social Life (2006, Transaction Publishers). 53 Southwood, Less Walk, More Talk, p. 123. 54 A. Abane, K. Hampshire, G. Porter and E. Robson, ‘Youth, mobility and mobile phones in Africa: findings from a three-country study’, Information Technology for Development 18.2 (2012), 145–62, www.tandfonline.com/doi/ full/10.1080/02681102.2011.643210 (accessed 8 December 2021). 55 Archambault, Mobile Secrets, p. 57. 56 Ibid. 57 S.K. Hellsten in H. Melber (eds), The Rise of Africa’s Middle Class: Myths, Realities and Critical Engagement (2016, Zed Books), chapter 4. 58 ‘Nigerian cellphone users switch off in protest: campaigners claim 80%’, Balancing Act’s News Update 175 (5 December 2003), www.balancingactafrica.com/news/telecoms-en/9491/nigerian-cellphone-users-switch-offin-protest-campaigners-claim-80 (accessed 8 December 2021) and ‘Mobile phone boycott to take off in South Africa’, Balancing Act’s News Update 194 (25 January 2004), www.balancingact-africa.com/news/telecoms-en/8937/ mobile-phone-boycott-to-take-off-in-south-africa (accessed 8 December 2021); and, more recently, M. Laplace, ‘Why telecoms firm Orange is so hated in Senegal’, Africa Report (11 August 2020), www.theafricareport.com/37227/ why-telecoms-firm-orange-is-so-hated-in-senegal/ (accessed 8 December 2021). 59 Author interview, Mark Davies, 8 June 2020. 270

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Doing complexity 60 R. Southwood, The Impact of Internet and Social Media on Communications in Africa an Overall Summary of Qualitative Research Insights (Balancing Act, 2014), pp. 15 and 38. 61 Facebook pages accessed 3 May 2021. 62 Southwood, Qualitative Research Insights, p. 30. 63 R. Heeks, A. Jagun and J. Whalley, The Impact of Telephony on Developing Country Micro-enterprise – A Nigerian Case Study (MIT Press, 2008), p. 47, https://strathprints.strath.ac.uk/15425/1/jagun_heeks_whalley_2_.pdf (accessed 8 December 2021). 64 J. Goodman, Africa: The Impact of Mobile Phones, Vodafone Policy Paper Series No. 2 (March 2005), p. 53. 65 Ibid. 66 Author interview, Arjuna Costa, 20 August 2020. 67 Author interview, Dare Okoudjou, MFS Africa, 21 July 2020. 68 R. Ouedraogo and A.N.R. Sy, ‘Can digitilization help deter corruption in Africa?’ IMF Working Paper (May 2020), www.imf.org/en/Publications/WP/ Issues/2020/05/29/Can-Digitalization-Help-Deter-Corruption-in-Africa-49385 (accessed 8 December 2021).

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Appendix A

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Glossary

2G, 3G, 4G, 5G: Different generations of mobile communications standards that allow mobile phones, computers and other portable electronic devices to connect Featurephone: A mobile phone that incorporates features such as the ability to access the internet and store and play music but lacks the advanced functionality of a smartphone: for example, a touch screen GSM: A European standard developed for mobile phones and first deployed in 1991 Incumbent: In telecommunications, the company (often a regulated monopoly) that is active on the market just before it is liberalised, or opened to competition Information or knowledge society: An information society is a society where the usage, creation, distribution, manipulation and integration of information is a significant activity. A knowledge society generates, shares and makes available to all members of the society knowledge that may be used to improve the human condition International gateways: The facilities through which telephone messages were sent and received Internet Exchange Point: An internet exchange point is the physical infrastructure through which ISPs and content delivery networks exchange internet traffic among their networks and peer together, often locally within a country 272

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Appendix A

Landing station: The location where a submarine or other underwater cable makes landfall Mobile wallet: A type of payment service through which businesses and individuals can receive and send money via mobile devices Rent-seeker: A concept in economics that states that an individual or an entity seeks to increase their own wealth without creating any benefits or wealth to the society. Rent-seeking activities aim to obtain financial gains and benefits through manipulating the distribution of economic resources VoIP: Voice over Internet Protocol, also called IP telephony, is a method and group of technologies for the delivery of voice communications and multimedia sessions over IP networks, such as the internet VSAT: Very-small-aperture terminal, a two-way satellite ground station with a dish antenna that is smaller than 3.8 metres. The majority of VSAT antennas range from 75 cm to 1.2 m

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Appendix B

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List of those interviewed

Ben Akoh (formerly ICT/Media Programme Manager, OSIWA), Onyeka Akumah (founder, Farmcrowdy), Ken Ansah (CFO, Multimedia Group), John-Paul Bagiire (formerly Senior Manager Business Support, MTN), Owen Barder (formerly No. 10 Adviser under UK Prime Minister Tony Blair), Simon Batchelor (Director, Research and Consultancy, Gamos), Richard Bell (formerly founder and CEO, Swift Global), Sylvain Beletre (formerly Senior Analyst, Balancing Act), Rob Bellaart (founder, GhanaWeb), Rania Belkahia (co-founder and CEO, Afrimarket), Peter Benjamin (formerly Head of Capacity, mHealth Alliance), Laurent Besancon (formerly Lead Tech Regulatory Expert, World Bank), Professor Mike Best (Georgia Tech), Yann Le Beux (co-founder, YUX), Jerome Bezzina (Regulatory Economist, World Bank), Eline Blaauboer (formerly Managing Partner, TBL Mirror Fund), Mohammed Bouhelal (formerly Chief Corporate Affairs Officer, Canar Telecom), Colin Bruce (formerly World Bank), Bankole Cardoso (formerly East Taxi), Irene Charnley (formerly MTN), Christopher Clark (ITU), Sebastian Codeville (CEO, KaiOS Technologies), Haymee Perez Cogle (founder, Institute Luanda), Anders Comstedt (consultant and adviser), Arjuna Costa (Managing Partner, Flourish), Mark Davies (founder, Busy Internet and eSoko), Tomi Davies (co-founder of the Lagos Angel Network), Pierre Dandjinou (formerly Policy Advisor, ICT4D, UNDP), Arjan de Jager (formerly Programme and Country Manager, IICD, Uganda), Tidjane Deme (General Partner, Partech), Ibrahim Dikko (CEO, BCN), Richardson Doe (General Manager, Technology, 274

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Appendix B

Multimedia Group), Jonathan Donner (formerly researcher, Microsoft), Laurent Elder (formerly Programme Leader, IDRC), Anriette Esterhuysen (formerly Executive Director, APC), Rick Fant (formerly Vice President and General Manager, Mozilla Corporation), Andrew Fassnidge (founder and Director, Africa Tech Summit), Envir Fraser (formerly Senior Manager, Department of Communications), Rich Fuchs (formerly Director, ICTs for Development, IDRC), Alison Gillwald (Executive Director, Research ICT Africa), Tamara Giltsoff (Director, Assistive Impact Fund), Brian Herlihy (founder and President Seacom), Erik Hersman (co-founder, iHub), Jussi Hinkkanen (formerly Vice President, Corporate Relations and Business Environment, Nokia), Nick Hughes (formerly Head of Mobile Payment Solutions, Vodafone), Etop Ikpe (formerly Vice President, Operations, Deal Dey), Shafika Isaacs (formerly CEO, Schoolnet), Tokunboh Ishmael, Abi Jagun, Wiza Jalakasi, Mike Jensen (consultant and adviser), Sonia Jorge (Executive Director, Alliance for Affordable Internet), Michael Joseph (formerly CEO, Safaricom), Musa Kalenga (formerly Client Partner, Facebook), Alex Kamara (formerly COO, Millicom Ghana and CEO, Millicom Rwanda), Timothy Kasolo (Networks and Securities Specialist, Zambia), Tim Kelly (ICT Policy Specialist, World Bank), Yoel Kenan (founder and CEO, Africori), Doreen Kessy (COO, Ubongo), Brian King (formerly Leland Initiative, Guinea Bissau), Stephen King (CEO, Luminate), Sammy Kirui (formerly CEO, Telkom Kenya), Reed Kramer (co-founder and CEO, AllAfrica Media), Charley Lewis (formerly senior lecturer, Link Centre, University of Witwatersrand), Alexandre Liege (formerly Business Manager, WECA Financial Services, MTN), Nisha Ligon (co-founder and CEO, Ubongo), Alon Lits (formerly General Manager, sub-Saharan Africa, Uber), Bernard Logan (formerly Chief Commercial Officer, MainOne), Ken Lohento (formerly Senior Programme Co-ordinator, Digital Agriculture and Youth Entrepreneurship), Brian Longwe (formerly CTO, ISPKenya), Christopher Lundh (formerly Managing Director, Telecel Congo), Emily Macauley (formerly various senior roles in Celtel), John Mack (formerly US Department of State), Ayisi Makatiani (co-founder, Africa Online), Duncan Martin (formerly CEO, TENET), Mlondi Mashinini (Managing Partner, Rumble Ventures), Strive Masiywa (founder and Executive Chair, 275

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Appendix B

Econet Global), Julia and Bernard Matthewman (co-founders, Tradanet), Andrew McLaughlin (formerly Chief of Global Policy, Google), Kerry McNamara (formerly World Bank), Jonathan Metzger (formerly Deputy Co-ordinator, Leland Initiative, USAID), Nic Moens (formerly Manager, eHealth Programmes, IICD), Shalini Moodley (co-founder and CEO, MetroGroup), Sean Moroney (founder and CEO, Aitec), Albert Mucunguzi (formerly Consulting Project Manager, Digital, Ugo Uganda), Alice Munyua (founder, KICTANet), Nika Naghavi (formerly Data and Insights Director, Mobile Money, GSMA), Bitange Ndemo (formerly Permanent Secretary, Ministry of Information and Communication), Isabel Neto (formerly ICT Policy Specialist, World Bank), Papa Njie (founder and CEO, Unique Solutions), Jason Njoku (founder and CEO, IROKOTV), Sam Nkusi (formerly CEO, Rwandatel), Ken Njoroge (co-founder, Cellulant), Badru Ntege (formerly Technical Director, One2Net), Isis Nyong’o (formerly Business Development Manager, Google), Fola Odufwa (consultant and adviser), Jesse Oguntimehin (formerly Deputy Marketing Manager, Digital, TECNO Mobile), Dare Okoudjou (founder and CEO, MFS Africa), Abdikadir Omar (Refugee, Dadaab), Judith O’Neill (formerly partner, Thelen, Reid and Priest), Funke Opeke (CEO, MainOne), Eric Osiakwan (formerly Executive Secretary, African ISP Association), Tayo Oviosu (founder and CEO, Paga), Sean Pashley (formerly CMO, Supa Pesa), Ben Roberts (CTO, Liquid Telecom), Nic Rudnick (CEO, Liquid Telecom), Marcello Schermer (Head of Expansion, Yoco), Philip Schmidt (formerly Bridges.org), Thomas Schoemaecker (formerly Google and Facebook), Elias Schulze (co-founder and CEO, Kaymu), Claire Sibthorpe (formerly IDRC and CATIA Programme), John Sihra (formerly Chair, EASSy, Lane Smith (formerly co-ordinator, Leland Initiative, USAID), Justin Spratt (Director of Business Development, EMEA, Uber), Steve Song (consultant and adviser), Mohamed Hapte Sow (Country CEO, Jumia), Sadibou Sow (founder, Doceo Podcasts), Estelle Sowah (formerly CEO, Busy Internet), Eric Stevance (founder and CEO, Afribone), Christoph Stork (formerly Senior Researcher, Research ICT Africa), Ewan Sutherland (Telecoms Policy Analyst), Karim Sy (founder and CEO, Jokko Labs), Olu Teniola (various senior roles in telecoms, Nigeria), John Traxler (Professor of 276

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Appendix B

Digital Learning, University of Wolverhampton), Tusu Tusubiru (various roles including with Ubuntunet and in Uganda), Professor Tim Unwin (UNESCO Chair in ICT4D, Royal Holloway, University of London), Mike van den Bergh (formerly CEO, Gateway Communications), Anuradha Vittachi (co-founder, OneWorld Network), Kelly Wong (formerly Leland Initiative), Adrian Wood (formerly CEO, MTN Nigeria), David Woolnough (responsible CATIA Programme, DfID), Kai Wulff (formerly CEO, Kenya Data Networks), Ethan Zuckerman (formerly Geek Corps).

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Select bibliography

Adera, E., K. Diga, O. Mascarenhas, J. May and T.M. Waema (eds), ICT Pathways to Poverty Reduction: Empirical Evidence from East and South Africa (IDRC, 2014) Alliance for Affordable Internet, From Luxury to Lifeline – Reducing the Cost of Mobile Devices to Reach Universal Internet Access (Web Foundation, 2020) Association for Progressive Communication et al., Global Information Society Watch 2008 – Focus on Access to Infrastructure (APC, Hivos and Third World Institute, 2008) Archambault, J.S., Mobile Secrets: Youth, Intimacy, and the Politics of Pretense in Mozambique (University of Chicago Press, 2017) Barnett, I., S. Batchelor, L. Haddad and N. Scott, Dial ‘N’ for Nutrition? A Landscape Analysis of What We Know about m-Nutrition, m-Agriculture and m-Development, IDS Working Paper No. 481 (2016) Batchelor, S., ‘Changing the financial landscape of Africa: an unusual story of evidence-informed innovation, intentional policy influence and private sector engagement’, IDS Bulletin, 43.5 (2012), 84–90 Brinkman, I., M. de Bruijn and F. Namnjoh, Mobile Phones: The New Talking Drums of Africa (African Studies Centre, Leiden University and Langaa Research and Publishing Common Initiative Group, 2009) Bruggink, M., Open Source Software: Take It or Leave It? (IICD, 2003) Caribou Digital, Digital Access in Africa (Caribou Digital Publishing, 2016) Comstedt, A., E. Osiakwan and R. Southwood, Open Access Models: Options for Improving Backbone Access in Developing Countries (with a Focus on sub-Saharan Africa) (infoDev and World Bank, 2005) Crompton, H. and J. Traxler, Critical Mobile Pedagogy: Cases of Inclusion, Development, and Empowerment (Routledge, 2020) Doyle, C. and D. McShane, On Design and Implementation of the GSM Auction in Nigeria – the World’s First Ascending Clock Spectrum Auction (Charles Rivers Associates, 2001) 278

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Select bibliography Elder, L., H. Emdon, R. Fuchs and B. Petrazzinni, Connecting ICTs to Development – The IDRC Experience (Anthem Press and IDRC, 2013) Esselaar, S. and C. Stork (eds), Towards an African e-Index – SME eAccess and Usage (ResearchICTAfrica.Net, 2006) Esselaar, S., A. Gillwald and C. Stork, Towards an African e-Index –Household and Individual ICT Access and Usage across 16 African Countries (ResearchICTAfrica.Net, 2007) Fink, C. and C. Kenny, W(h)ither the Digital Divide? (ITU, 2003) Gillwald, A. (ed.), ICT Sector Performance in Africa: A Review of Seven African Countries (ResearchICTAfrica.Net, 2004) Gillwald, A., Towards an African e-Index – Household and Individual ICT Access and Usage across 10 African countries (ResearchICTAfrica.Net, 2010) Gillwald, A. and C. Stork, Towards an African e-Index – Towards Evidence Based Policy in Africa (ResearchICTAfrica.Net, 2007) Grosskurth, J., Futures of Technology in Africa (STT Netherlands, 2010) Hamilton, P., The Acacia Atlas – Mapping African ICT Growth (IDRC, 2005) International Telecommunications Union, World Summit on the Information Society: Declaration of Principles (ITU, 2003), www.itu.int/net/wsis/docs/geneva/official/ dop.html (accessed 8 December 2021). International Telecommunications Union, World Summit on the Information Society: Outcome Documents (ITU, 2005), www.itu.int/net/wsis/outcome/booklet.pdf (accessed 8 December 2021). Iyer, N., B. Nyamwire and S. Nabulega, Alternate Realities, Alternate Internets – African Feminist Research for a Feminist Internet (APC and IDRC, 2020) Jagun, A., ‘The case for “open access” infrastructure in Africa: the SAT-3/WASC cable – a briefing’ (APC, n.d.), www.apc.org/fr/pubs/case-%E2%80%9Copenaccess%E2%80%9D-communications-infrastructure-africa-sat-3wasc-cable (accessed 8 December 2021). Jagun, A., R. Heeks, and J. Whalley, ‘The impact of mobile telephony on developing country micro-enterprise: a Nigerian case study’, Information Technologies and International Development 4 (2008), 47–65 Knott-Craig, A., Second Is Nothing – Creating a Multi-Billion Rand Cellular Industry (Macmillan and Rollerbird Press, 2009) Lewis, C. and R. Southwood, Empowering Regulators to Protect Consumer Rights in the ICT Sector (Balancing Act and the Link Centre, 2011) Mansell, R. and U. Wehn (eds), Knowledge Societies: Information Technology for Sustainable Development (UNESCO, 1998) Milward-Oliver, G., Maitland+20 – Fixing the Missing Link (Anima, 2005) Ndemo, B. and T. Weiss, Digital Kenya – An Entrepreneurial Revolution in the Making (Palgrave Macmillan, 2016) Odufwa, F., Trends in Internet Usage in Nigeria (eShekels, 2001) Odufwa, F., Nigerian Internet Report (eShekels, 2003) Odufwa, F., Trends in Telecommunications Markets in Nigeria (eShekels, 2004) 279

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Select bibliography Odufwa, F., Nigeria Mobile Handset Report (eShekels, 2005) Ouédroaogo, S., The Computer and the Jembe (L’Harmattan, 2003) Peters, T., Spanning the Digital Divide: Understanding and Tackling the Issues (Bridges.org, 2001) Peters, T., The Real Access/Real Impact Framework for Improving the Way that ICT Is Used in Development (Bridges.org, 2005) Prahalad, C.K., The Fortune at the Bottom of the Pyramid – Eradicating Poverty through Profits (Wharton School Publishing, 2009) Rao, M., Africa Report 2010 – Rise of the Creative Economy (Mobile Monday, 2010) Southwood, R., Via Africa – Creating Local and Regional IXPs to Save Money and Bandwidth (IDRC and ITU, 2005) Southwood, R., Sub-Saharan Africa’s Digital Landscape and its Top 11 Markets – Data Prices, Smartphones, Digital Content and Services and e-Commerce (Balancing Act, 2019) Stork, C., S. Essalaar, M. Koyabe and S. Nwana, Over The Top (OTT) Applications and the Internet Value Chain – Recommendations to Regulators, Policy Makers and Tax Authorities (Commonwealth Telecommunications Organisation, 2020) Traxler, J., ‘Learning with mobiles in developing countries – technology, language and literacy’, International Journal of Mobile & Blended Learning, 9.2 (2017), 1–15 Unwin, T. (ed.), ICT4D (Cambridge University Press, 2009) Van der Walt, J., Yebo Gogo – It’s a Deal (Vodacom, 2003) World Bank, Financing Information and Communication Infrastructure Needs in the Developing World – Public and Private Roles (World Bank, 2005) World Bank, Digital Dividends – Overview (World Bank, 2016) Wrong, M., It’s Our Turn to Eat: The Story of a Kenyan Whistle Blower (4th Estate, 2009) Zelezny-Green, R., ‘The role of girls’ mobile phone use to increase access to educational content after school: a capabilities-based evaluation in Nairobi’ (PhD thesis, Royal Hollway, University of London, 2017), https://pure. royalholloway.ac.uk/portal/files/28084955/Zelezny_Green_Ronda_PhD_thesis_ May_2017_Final.pdf) (accessed 8 December 2021)

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Index

263Chat 138 3G 43, 86, 135, 241, 258 3mice 219, 223 88mph 225 9Mobile 118 A2Africa 101 Abacha, General Sani 35 Abacus 226 Abubakar, General Abdulsalami 35 Access Now 140 Aceng, Dr Jane Ruth 175 Acumen Fund 118 Adagame, Ada 198 Adeloa, Fola 70, 71 Adenuga, Mike 35, 37, 38, 201, 229 Adesina, Akinwumi 125 Adlevo Capital 118 Aforevo 142 AfriAfya 167 Afribone 53 African Development Bank 69, 71 African ISP Association 54 African Lakes 223 Africa Online 58, 223–4 Africa Ride 242 African Continental Free Trade Area 232 Africell 254

Africori 142, 145 Afrilabs 226 Afroes 227 Aga Khan Fund 68 agriculture 183–6 Agtech 183–6 Agrikore 125, 221–2 Airbnb 236 Airtel 100, 101, 126, 221 Airtel Money 221 Akinboro, Bolaji 125, 219 Alcatel 204, 206, 207 handsets 91 Alcatel Lucent 66 Alipay 128 Al Jazeera Investigative Unit 208 AllAfrica 134 Alliance for Affordable Internet 260 Amazon 58, 137, 238, 251, 252 Ampion Bus 226 ANC 28, 29–34 Android 88, 89, 90, 91, 92, 101, 182, 185 Angola 30, 139, 141, 193–6, 199, 242 Anglovaal 30 Anti-Corruption Commission, Kenya 66 APC 50, 52, 163 Apple 84, 89, 96, 137, 236 281

Index

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Arid Lands Information Network 167 ARPT, Senegal 201 B, Inos 137 Babangida, Ibrahim 201 Bagiire, John-Paul 62 Bahati Books 226 Bamba Chakula 159 Barassa, Jennifer 116 Barder, Owen 179 Barlow, John Perry 4 Barlow Rand 30 Batchelor, Simon 111 Battabox 139 BCN 74 behaviour changes 262–3 Bell, Richard 55, 66 Ben Ali, President Zine El Abdine 168 Benin 206, 209 Benin Telecoms 209 Beyonic 124 Big Cabal 145 Bill and Melinda Gates Foundation 137, 164 Bintta Informatique 53 Biwott, Nicholas 204 Biya, President Paul 140 Blackberry 84, 87, 89 Black Panther, film 263 Blair, Prime Minister Tony 179 Blakeney Management 223 Bliss Group 232 BofiNet 74 Bolt 236, 242 Bongo Hive 232 Boom TV 205 Botswana 61, 73, 86 Botswana Telecommunications Corporation 62, 73 bottom of the pyramid 85, 250 Brasimba 136 Briter Bridges 226 Brown, Gordon 111

Buch, Kresten 225 Buhari, President Muhammadu 141, 200 Burkina Faso 40, 254 Burundi 65, 146 Bush, Randy 50 business models 25, 34, 49, 101–2, 126, 143–6, 202, 204–5, 230, 236, 253 Busy Internet 57–9, 223 Butare, Albert 65 Cambridge Analytica 101 Cameroon 34, 56, 57, 140, 141, 202, 204, 230, 236, 253 Camtel 204, 205 Canal+ 142 Thema 142 Capricorn Investment Group 118 Cardoso, Bankole 239 Carneiro, General Manuel Jôao 196 Castells, Manuel 5 ccHub 225 CCK, Kenya 55, 56, 66, 169, 220 Catalyst Fund 177 Cellulant 125, 219–22, 224 Celtel 23, 25, 27, 36, 37, 38, 40, 109, 110, 202, 254, 257, 262 Celpay 109 Central African Republic 93 Central Bank of Nigeria 118 Chad 146, 149, 151 Chagouri Brothers 35 Challenge Funds 177 Chasia, Henry 62, 64, 65 China 90, 203, 235, 236, 239 CIDA 172 CIL 35, 37, 38 Cisco 163 Clinton, President Bill 94, 95 Clinton Global Initiative 94 Club Consortium 59–60 Club-K 139 Collymore, Bob 122, 231

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Index Commercial Bank of Kenya 112 Comstedt, Anders 62, 65 Comtel 62 Concree 226 Congo Brazzaville 25, 27, 252 Congo Wireless Networks 203 Connectivity Africa 164 Conteh, Alieu 202 corruption 22, 66, 125, 138, 139, 162, 193–216, 266 predatory corruption 200, 209 Côte d’Ivoire 35, 72, 95, 96, 100, 115, 124, 127, 230, 234, 235, 237 CSquared 96 cyber-cafes 56–9

digital modernity 251 digital natives 267 Digital Opportunity Initiative 166 donors, international 120, 145, 163, 168, 169, 171, 172, 173, 174, 177, 180, 229, 251, 253, 254 dos Santos, President Eduardo 194, 196 dos Santos, Isabel 193–6, 199 Draper, Tim 118 DRC 15–18, 34, 38, 54, 93, 100, 109, 135–7, 141, 146, 199, 202, 203, 208, 252 ‘dumb pipe’ 101 Dyson, Esther 163

Dadaab refugee camp 157–60 Daily Maverick 138, 145 Dandjinou, Pierre 54 Danpullo, Baba 205 Darby, Gavin 203 Databank Financial Services 59 Davies, Mark 58–9, 184, 223 De Klerk, President Willem 31 Detecon 37 DFA 67 DfID 109, 111, 112, 162, 164, 169, 176, 177, 178, 179, 181, 184, 254 Assistive Tech Impact Fund 178 CATIA 162, 169 Frontier Technology 178 iMlango 181 Dialogflow 259 diaspora 57, 70, 98, 99, 111, 121, 134, 138, 142, 143, 223, 230, 253 remittances 111, 121, 253–4 Diaw, Ndango 201 digital behaviours and trust 265–6 digital devices (inc. mobile handsets) 257–8 digital divide 5 geographic 257 gender 259–62

EADTP 62 EASSy fibre cable 61–3 Easum, David 36 Easy Taxi 239 EatOut Kenya 145 Ecobank 136 EcoCash Savings 125 e-commerce 236–9, 266 Econet 19–23, 37, 38 education 172–3, 178–83 Eguitel/SITEC 55 Emmane, David Nkoto 205 Emtel 43 Enablis 166, 223 Eneza 178, 226 entrepreneurship courses in Higher Education 230 Ericsson 22 Eritrea 50, 74, 146 Eskimi 236 eSoko (formerly Tradenet) 183, 184, 227 Ethiopia 51, 52, 91, 119, 137, 138, 141, 149, 206, 207, 242, 249, 256, 257, 258 Ethiopian Telecommunications Corporation 206, 207 283

Index

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Etisalat 65 Expat-Dakar.com 140 European Investment Bank 69 evidence base 170, 179 Facebook 2, 3, 50, 74, 83, 84, 85, 88, 93, 99–101, 126, 136, 137, 141, 144, 145, 148, 151, 160, 165, 184, 186, 225, 226, 230, 236, 239, 250, 252, 255, 258, 264, 265, 266 Basics 100 Project Aquila 100 Telecom Infra Project 100, 258 WiFi Express 100 Zero 100 Falulu 112 Fant, Rick 90 Farmcrowdy 178 Fastnet 56 Fidelity Investment 59 financial inclusion 115, 119–21 Firefox 90–2 First Bank 110 First Independent Network 37 Flutterwave 228 Fomento de Angola 194 Fonac 209 France 127, 167, 205 France Telecom 34, 53 fraud 221–2, 237 Freedom Fone 163 FRELIMO 205 French Development Bank 69 Frontier Car Group 236 Frontline SMS 163 G8 Dot Force 163, 166–7, 223 Gambia 57, 197, 202, 253 gambling 149 Gamos 111 Gamtel 197 gatekeepers 102, 229, 251 Gatt, Joe 15–18

Geek Corps 162 Gent, Chris 29 German Development Bank 69 Ghafla 139 Ghana 5, 24, 33, 54, 57, 60, 72, 73, 74, 85, 86, 89, 95, 96, 115, 120, 126, 134, 141, 147, 148, 149, 183, 184, 207, 220, 223, 224, 227, 234, 236, 239, 261, 263, 264 Ghana Telecom 56, 60, 73 Ghana Web 134 Gifted Mom 178 GISPA 56, 60 Glo 60, 262 Globacom 201, 229 Global Entrepreneurship Monitor 234 Global Knowledge Partnership 163 Goodwell Investments 117, 118 Google 2, 3, 68, 74, 89, 93–9, 101, 126 Adsense 144 Auction 98 Baraza 97 Loon 258 Maps 96, 135 Programme for African Universities 95 Project Link 74, 96 Search 96 Trader 97 Translate 97, 258 TV White Spaces 96 Wazi WiFi 96 Greenhill, Robert 172 GreenNet 52, 163 GSMA 86, 174, 177, 184, 250, 254, 257 GSMA Innovation Fund 177 GT Bank 70 Guaye, Moustapha Yacine 201 Guinea-Bissau 55, 253 Gulu 258 Gutteres, Antonio 259 284

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Index HealthNet 50, 162, 165 Herlihy, Brian 64–5 Hewlett Packard 163 Hills, Judith 30 Hodera, Jeremy 236 Hole in the Wall project 178 Horn-Smith, Julian 29 Hotels.ng 226 Huawei 24, 89, 206, 207, 208 Hughes, Nick 112 hustle culture 234 Huter, Steve 50 hybrid auction 37 ICASA 32, 33, 34 ICT4D 157, 161–72, 174, 176, 177, 178, 243 Ideal-Levantis 35, 36 IDRC 50, 111, 161, 162, 164–6, 168, 169, 180, 223, 234 IFEX-TMG 169 iHub 224–5 IICD 162, 183, 223 IFC 69 Ighodalo, Asue 71 ILO 159 illegal outflows 197 IMF 266 Imfundo 179 individualism, family and ethnic grouping 264 India 3, 92, 100, 178, 180, 203, 236 InDriver 242 Information Society 168 innovation 19, 27–8, 116, 123, 161, 162, 165, 174, 175, 176, 177, 186, 225, 226, 230, 231, 232–3, 236, 251, 252, 257, 258 Instagram 136, 137, 148 intellectual property 234 Interdoc 163 International Consortium of Investigative Journalists 195, 197

international telecoms revenues 25–6 internet, access to 257 internet and relationships 148 internet, discrimination against women 261 Internet Exchange Points see IXPs internet, gender-based violence 262 Internet of Things 185 internet, male behaviour 261 internet scams 58 internet shutdowns 140 Investcom Holdings 34 investment, telecoms 38–9 Ipupa, Fally 137 IROKO 98, 141–3 Ishmael, Tokunboh 117 ITU 161, 162, 167–9 IVR 163, 182 IXPs 55, 96, 168, 169, 257 Jambonet 56 Jamii Forums 138 Jammeh, President Yahya 197 Jekalo 242 Jensen, Mike 59, 62, 64 Jio 92 Jomo Kenyatta University of Agriculture and Technology 181 Jonathan, President Goodluck 141 Joseph, Michael 66, 112 Joy FM 134 Jumia 230, 236–9, 252 JumiaPay 237 Jumpin Rides 242 Kabila, Jaynet 203 Kabila, Joseph 203 Kabila, Laurent (Senior) 16, 17, 202, 203 Kamara, Alex 83, 84, 85 Kazi 360 167 KDN 68

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Index Kenya 8, 24, 34, 54, 55, 64, 65, 66, 68, 73, 86, 89, 91, 94, 95, 96, 99, 100, 101, 102, 111, 112–14, 116, 125, 126, 134, 136, 139, 141, 142, 144, 145, 147, 148, 149, 150, 157, 158, 167, 169, 172, 173, 178, 181, 184, 185, 202, 203, 204, 208, 209, 219–22, 223, 224, 225, 226, 227, 228, 230, 232, 233, 234, 239, 241, 242, 243, 259, 260 Kenya Primary Math and Reading Initiative 181 Kenyan Dairy Farmers Forum 184 Kenyatta, President Uhuru 141, 181 Keratsu Holdings 203 Kerekou, President Mathieu 206 Kibaki, President Mwai 113 KICTANET 169 Kigali Protocol 63 Kinnevik 239 Knott-Craig, Allen 28 ‘knowledge society’ 3 Kobo360 226 Komaza 228 Konga 226, 239 Kubinga 242 Kyari, Abba 200 landlocked countries 60, 65, 68, 74, 251, 257 languages, Africa 151–2 Amharic 91 Hausa 91 language localisation 259 Pidgin 91 Swahili 91, 97, 112, 138, 182, 259 Wolof 151 Yoruba 239 Lean Startup Machine 226 Lesotho 34 liberalisation 24, 28–35, 39, 40–3, 249–50, 252–3 Libercom 209 Liberia 39, 96, 146, 151, 205, 252, 253

Linda Ikeji’s Blog 139 LinkedIn 236 Liquid Telecom 73, 254 literacy 43, 92, 121, 133, 151, 173, 181, 184, 241, 257, 258–9 functional literacy 241 technological literacy 259 Little 226, 233, 242 Longwe, Brian 55 Lyft 236 M4D 173–4 MA3Route 233 Macauley, Emily 40 Madagascar 9, 40, 53, 54, 115, 120, 122, 146, 199 Mail and Guardian 144–5 MainOne fibre cable 71–2, 101 mainstreaming ICT 172, 174 Making All Voices Count 176 Malawi 51, 109, 135, 263 Mali 35, 53, 60, 135, 253 Malinet 53 Mandela, President Nelson 31 Manzer, Osama 3 Martin, Duncan 67–8 Masiywa, Strive 19–23, 28, 29 Maslow, Abraham, hierarchy of needs 158 Massingue, Venancio 166 Mastercard 221 Ma Tontine 178 Mauritania 60 Mauritius 35, 43, 54, 196, 199, 224 MAX 226 Mbeki, President Thabo 66 Mdundo 144 Mediae 182 Medical Concierge 226 Melo, Maxence 138 M-Farm 227 meQasa 226 MEST 224

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Index Mexico 119 MFS Africa 123–4 m-health 174–6 Microsoft 90, 95, 96, 137, 158, 159, 163, 164, 168, 236 Hotmail 95 middle-class Africans 250 Mifone 85 Millenium Development Goals 171 Millicom 41, 84, 85, 102, 239 Tigo 85, 126 minerals for smartphones 92–3 Mitra, Sugata 178 M-Koba 125 mLab 225 Mobile Active 174 mobile and jobs 252–3 mobile internet 43 Mobile internet prices 85–7 mobile phones and aspiration 262–3 mobile voice calling costs 23 Mobile Web Africa 226 Mobitelea Ventures 203, 204 Mobutu, President Sese Seko 15, 16, 17 Moi, Gideon 56 Moi, President Daniel Arap 55, 204 Moi University 181 Moja 150 monopolies 25–6, 33, 41–2, 48, 49, 50, 52, 53, 54, 55, 60, 61, 69, 114, 140, 144, 161, 170, 198, 206, 249, 251, 254, 257, 267 moral values 264–5 Morrisett, Lloyd 5 Motlana, Ntatho 31 Motophone 35 Movicel 196 Mozambique 34, 84, 121, 162, 166, 180, 205, 256, 261 Mozilla 90, 259 M-Pesa 109, 111–14, 116, 119, 122, 124, 125, 126, 159, 169, 176, 177, 221, 233, 254

M-Shwari 124 MTN 23, 27, 28, 29, 30, 31, 34, 37, 38, 39, 61, 62, 68, 69, 70, 87, 91, 92, 102, 110, 118, 120, 123, 124, 126, 184, 196, 200, 204, 224, 230, 236, 253, 262 MTN Mobile Money 114–16 Mucheru, Joe 94 Mugabe, President Robert 22 Mukete, Colin Ebarko 204 Mukete, Victor Nfon 204 MumsVillage 232 Munyua, Alice 169 Museveni, President Yoweri 140 Mushi, Mike 138 Musisi, Charles 51 MWTunes 135 NAIL 31 Namibia 60, 86, 173, 199, 206, 208 Nascimento, General Dino 195 Naspers 134, 138 National Transport Safety Authority, Kenya 233 Nation Media 134 NCA, Ghana 56 NCBA Bank 124 NCBC 73 NCC, Nigeria 36, 119 Ndemo, Bitange 64, 65, 66, 113 Ndour, Youssou 97 Ndukwe, Ernest 36 Nedbank 68 Negroponte, Nicholas 178 NEPAD 62, 63–6, 68 Netflix 236 NetHope 158 ‘network effect’ 121 Network Start-Up Resource Centre 50 News24 138 news, online 255–6 New York Stock Exchange 238 Nextel 205

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Index Ngcaba, Andile 30–2 Niger 146, 149, 151, 206 Nigeria 19, 23, 28, 35–40, 54, 56, 58, 60, 70–2, 83–4, 87, 89, 91, 92, 95, 96, 99, 101, 109, 116–19, 125, 126, 127, 128, 135, 136, 139, 140, 141, 142, 143, 144, 146, 147, 148, 149, 151, 178, 199, 200, 201, 205, 206, 219, 220, 221, 225, 226, 227, 228, 232, 234, 236, 237, 239, 240, 241, 242, 253, 262 Northern Nigeria 74, 149, 265 Licence Auction 37–40 Nitel 35, 38, 39, 60, 70, 71 Nivea 144 Njoku, Jason 98, 142–3 Njoku, Mary 142 Njoroge, Ken 219–22 Nokia 89, 91 Nollywood 89, 98, 141–2 Nortel 164 Norwegian Refugee Council 159 NSIA 127 NTT Docomo 167 Nyirenda, Paulos 51 Obasanjo, President Olusegun 35 Oga Taxi 242 Oguntimehin, Jesse 83, 84, 91 Oi 195 Ojek 128 Okada Books 226 Omar, Abdikadir 157–60 Omidyar Network 118, 164 One Africa Network 73 O’Neill, Judith 20, 21 Opay 128 Opeke, Funke 70–2 Open Access, fibre cables 62–3 Open Knowledge Network 166–7 Open Source, software 163 Opera platform 101 oral cultures 151, 250, 259

Orange 34–5, 41, 72, 90, 91, 92, 123, 126, 127, 158, 183, 206, 230, 231 Orange Digital Venture 230 Orange Money 114, 115, 116, 123, 127 Orascom 18, 37 ORSTOM 53 Osiakwan, Eric 54, 62 ‘Over-The-Top’ operators 102 Ovia, Jim 229 Oviosu, Tayo 117–19, 229 Oxfam 144 PADIS 50 Paga 109, 116–19, 128, 229 Page, Larry 95 Panama Papers 206 Papert, Seymour 178 patronage/patrimonial capitalism 197, 198, 229, 267 Pew Research 91, 150 Pinterest 148 piracy, content 143 Pivot East 226 Poignonnec, Sacha 236 Poptel 163 pornography 58, 149, 160, 261 Praekelt Foundation 100 pre-paid calling 27–8, 34, 250, 251 Price Check 226 price elasticity 49, 250 privatization 19, 23–5, 32, 33, 39, 40–2, 70, 71, 197, 199, 205, 249, 252, 254 Project Isizwe 100 Qene Technologies 226 Quartey, Eric 56 Radio Spectrum International, consultants 36 Ramaphosa, Cyril 31, 32 Rancard 224 288

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Index regulations, telecoms 23, 35, 36, 49, 54, 60, 61, 72, 73, 99, 164, 169, 199, 252 remittances 111, 116, 120, 121, 122, 124, 253 rentier capitalism 197, 198 Research ICT Africa 86, 165 retail, African 236 ride-hailing 239–42 Ringier 138, 140 Rockefeller Foundation 174 Rocket Internet 239 Rok Studios 142 Royal Commodities 184 Rupert, Johann 29 Rwanda 15, 17, 34, 65, 68, 85, 100, 122, 125, 146, 149, 150, 151, 206, 259 Rwayitare, Miko 15–18, 22, 28 RWR Advisory Group 207 SAB 227 Safaricom 34, 66, 86, 89, 91, 102, 112–14, 119, 122, 124, 128, 144, 158, 159, 203, 204, 209, 221, 226, 230, 231, 254 Mosoko 230 Spark Fund 230 Safemotos 178 Sall, President Macky 140, 201 Samsung 88, 89, 136 SANGONeT 163 SAT3 fibre cable 49, 50, 59–61, 62, 85 SBC Communications 33 Seacom 64, 65, 67–8 Sendy 226 Schermer,Marcello 125 Schmidt, Eric 94, 95, 98 SchoolNet Africa 180–1 SCPT, DRC 208 SDNP 51 SEED 226 Seed Academy 228

Seedstars 226 SEMA 172 self-generated content 149–50 Senegal 33, 35, 41, 52, 72, 97, 121, 133, 137, 138, 141, 149, 151, 166, 180, 183, 201, 226, 228, 230, 235, 237, 238, 255, 260 Sentel 41 Serengeti 144 Shope-Mafole, Lyndall 31, 64, 66 Shoprite 136 Showmax 141 Shuttleworth, Mark 223 SIDA 163, 169 Sierra Leone 17, 39, 83, 120, 147, 252 Silicon Savannah 225 Singh, Herman 236 Sirha, John 65 Siyavula 226 Skynamo 228 Slovo, Joe 32 SMS messaging 3, 22, 43, 84, 85, 89, 97, 100, 101, 102, 109, 118, 122, 133, 152, 163, 167, 172, 173, 176, 177, 182, 184, 185, 219, 256, 258 Somalia 39, 146, 147, 157–60, 252 Sonatel 41 Sotelma 53 Soul City 182 South Africa 19, 21–3, 27–34, 43, 50, 54, 56, 59, 60, 61, 64, 66–8, 72, 73, 86, 87, 89, 91, 94, 96, 97, 99, 100, 110, 125, 127, 134, 136, 138, 141, 142, 144, 145, 146, 147, 149, 150, 163, 166, 173, 178, 180, 205, 223, 226, 227, 228, 229, 232, 234, 240, 242, 254, 260, 262, 263, 266 South Sudan 146, 151 Sow, Mohamed Hapte 237 Special Purpose Vehicles 63, 69 Spectrum Advertising 205 SRII 62 Standard Bank 110, 127, 221

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Index start-up cultures 234–5 start-up ecosystem 229–1 start-up investment 228–9 start-ups and gender 235 start-ups and innovation 232–4 start-ups and jobs 227–8, 243 start-ups and telecoms sector 230 Stevance, Eric 53 STV 205 Sudan 120, 206 Sudapay 178 Suntel 30 Supply chain blockages 250–1 Surf, ISP 100 Surveillance, police 169 Sutherland, Ewan 196, 199 Swaziland 34 Swvl 233 Tanzania 34, 43, 57, 100, 112, 114, 122, 125, 138–9, 141, 142, 149, 182, 183, 199, 206, 234, 242, 266 Taylor, President Charles 205 Taylor, Seyi 145 TBL Mirror Fund 220 TEAMS 65–6 Tech4Africa 226 Technology appropriation 2 diffusion 250 economic growth 255 socially defined 3 Tecno 88, 91 Telecel 15–18, 34 Telecentres 165 Telecentres.org 164 Telkom, Kenya 24, 55, 66, 203, 208 Telkom, South Africa 28, 30, 31, 32, 33, 59, 60, 61, 68 Telstar 195 TENET 67–8 Teraco 68 TESPOK 55, 56

Text to Change 173 Thawte Consulting 223 Thintana Communications 33 Tiger Global 142 TikTok 148, 236 Timms, Stephen 111 Titan Wireless 206 Tizeti 100 Togo 146 Tony Elumelu Foudation 235 Top Image 116 Torrent 143 TPG Growth 221 TotoHealth 227 Tracfin 204 Tradanet 223 Trade Depot 227 Transcorp 70 Transparency.org 199 Telliac 204, 206 Tunisia 167–9 Tupuca 242 Twiga Foods 226, 227, 228 Twitter 84, 136, 141, 148 Tyco 71 Uber 233, 240–2, 251 Ubongo 182–3 Uganda 34, 51, 54, 91, 95, 100, 114, 121, 140, 141, 146, 148, 149, 150, 165, 166, 173, 175, 176, 186, 202, 203, 206, 219, 242, 258, 260 Uganda Health Information Network 165 uLesson 226 UNDP 50, 53–4 UNHCR 158, 159 UNICEF, RapidSMS 176 UN ICT Task Force 163 Unilever 227 Unitel 194, 195 University of Geneva 159 Unwin, Professor Tim 179 290

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USAID 50, 52, 96, 147, 162, 183 Leland Initiative 52–4, 162 US Foreign Corrupt Practices Act 201, 206 Ushahidi 227 US State Department 52 Van der Beek, Wim 117 VC4Africa 226, 227 Verisign 223 video streaming 141–4 Virtual City 224 Visa, credit card 124, 221 Vimeo 141 Viusasa 141 Vivendi Telecom International 204 Vodacom 28, 30, 34, 84, 114, 126, 137, 141, 203, 205, 230 Vodafone 29, 34, 36, 38, 73, 89, 90, 112, 113, 126, 203, 204 Voila Nights 136–7, 226 VoIP 26, 56, 57, 58 VSAT 52, 54, 55, 56, 72, 169 WACS 72, 208 Wade, President Abdoulaye 201 WeChat 126 Weza Interactive 226 WhatsApp 88, 101, 148, 150, 160, 239, 250, 264

WIOCC 69 Wizzit 110 Wood, Adrian 39 World Bank 38, 42, 49, 50, 62, 63, 66, 68–70, 161, 163, 177, 182, 199, 207, 223, 228, 254, 255 World Food Programme 159 World Health Organization 175 WSIS 112, 162, 164, 167–9, 172 Wulff, Kai 68 Xender 143 XO laptop 179 Yoco 125 YouTube 6, 96, 97, 98, 101, 141, 142, 144, 146, 147, 255 Zambia 8, 34, 100, 110, 126, 206, 207, 232, 242, 261 Zamnet 51 Zap 194 Zay Ride 226, 242 Zenith Bank 229 Zimbabwe 8, 19–22, 29, 125, 133, 138, 206 Zomato 236 Zopt 195 ZTE 207 Zuckerberg, Mark 225

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