Yes, technology will save Africa
Technology is not software. We need more technology
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Both essays are dedicated to my mother who wrestled with Life to give me one of the best education people of our humble station could hope for. Almost 12 years ago this year, I was in a cybercafe near my hometown “surfing the internet” to find essay competitions I could enter to win some money and contribute to my mom’s treatment. I didn’t find any and she passed away from complications arising from ovarian cystic dermoid in early 2014. She would have been 57 last December.
If I ever contribute to the field of medicine, I know what I want that contribution to be.
It’s trendy these days to claim that the focus (if there is one) on technology as a transformative force in Africa is misplaced. For some reason, the working definition of technology in Africa for many of these conversations seems to stop at software technology—or, more often than not, financial technology or payment apps.
When technology and digital economy are used interchangeably, the inevitable conclusion is that “technology in Africa” = software + venture capital. I find that incredibly self-limiting.
Still, whether you call it technology or narrow it down to digital technology, the undeniable fact is that technology is bigger than software. Technology is technology. Technology is productivity. Technology is also a rail for economic activity, the backbone of industrialisation, intensive agriculture and finance. Africa lacks a lot of all this.
Since the discovery of fire, people have built economies around the dominant technology epochs of their time—Stone Age, Bronze Age, Iron Age, etc. The main difference between then and now is that technology across all domains is far more advanced than the basic engineering principles that put a wheel on a chariot or a harness on a bull. Technology is more inter-domain now than ever before.
Should Africa focus on increasing agricultural productivity? Sure! I’d love to see Africa’s share of exportable crops rise, and imports fall. Good luck doing that without corresponding adoption (and constant progress in technology). Tech is why we have “agric” chicken and the modern varieties of rice and wheat that helped us defy Malthus.
Should Africa build competitiveness in automobiles? Why not? Should African countries increase energy generation, distribute generated electricity efficiently and consume more power? 100% yes. And so on. This is all technology.
“Digital” technology is no exception
I’ve written about how the digital economy is also physical. In November 2022, I wrote:
…a digital economy is built on at least four columns:
Digital infrastructure and the means to make, control and maintain them.
Network effects and a system for managing the results of these effects.
Legal infrastructure.
Institutional commitment to intentionally addressing the social questions that digital economies raise.
These four pillars arise from the fact that a digital economy interacts with physical behaviours and tools that are captured and digested by software.
Until Funke Opkeke’s MainOne commenced commercial operations in Ghana and Nigeria in 2010, running an ISP (Internet Service Provider) was a nightmare. Using an ISP on the consumer end was even more painful. MainOne did not solve all the connectivity problems, but it sent a signal that connectivity was a business space worth playing in. And the relatively faster internet it brought did have some positive impact, especially for the earlier technology companies in the Lagos area.
It’s one thing to argue for the basics: good road networks, electricity, good “infrastructure” and perhaps more importantly quality laws and public institutions. It’s a different thing to imply that focusing on technology is a distraction from these things. Except for laws and public institutions, good roads, electricity and “infrastructure” are as much technology questions as they are economic and state capacity questions. Essentially, the most capable states are capable because they can marshall public institutions (and private actors) to deploy resources, including technology resources, to solve long, medium and term problems.
Indeed, if the state marshalled public resources to tackle problems with outdated or little-to-no technology, the results may likely be no more dismal than we have today. It’s indictment on a systemic problem rather than a problem that arises from focusing too much on technological solutions.
If anything, we do not do enough technology-solving/production as a continent. Whether you look at the software side of the physical side of technology. Which brings me to my next and last point.
Every problem a nail. Venture capital, the hammer
The other branch of the “tech is overhyped” church that I hear often is that venture capital is not a fit for Africa. I’d argue that [hyperbole alert] venture capital is not fit for almost anywhere outside of the United States of America and maybe Israel—if we are judging by overall direct economic contribution. It gets more interesting if you add more parameters (patents, transmission mechanisms, investor sophistication, etc.). But that is beyond the scope of this essay.
The more I listen to venture capital in Africa critiques (and there are a lot of good points to land criticism), the more it is obvious to me that people are mostly frustrated that venture capital is (1) not free money (2) not giving money to things they think VC should fund.
But venture capital is: (1) a subset of a particular strain of private equity, (2) too small, and (3) too early, to do what we seem to be demanding from it. And to be fair, even venture capitalists should shoulder some of the blame for this, arising from how they talk about their jobs.
Two years ago you would be forgiven for thinking that venture capital existed to bring capital to the places where the world of finance had long forgotten. Because the business financing problem in Africa was defined so simply, venture capital has become the hammer to all the nails we hold up.
Venture capital and the types of technology innovation it finances are simply a specific set of tools and incentives for achieving a high risk/high reward outcome. And like most financing, the tools should be constantly calibrated to meet the specific circumstances it is being applied to.
Morocco ranks far below the continent’s leaders for raising venture capital in Africa. But in 2023, the country earned $16.4 billion in automotive exports to the EU. Guess what? Those exports and the factories that built those car or truck parts were not financed by venture capital.
South Africa’s $13.7 billion of agricultural exports in 2024 were very much not a direct result of venture capital financing. And there are many other places and spaces like across the continent that have a similar story to tell.
Now does this mean that the way venture capital in Africa is done gets a free pass? Not at all.
The people whose jobs it is to write cheques to finance early technology innovation have some soul-searching to do. Beyond searching souls, we’ll need to critically examine how to build the plumbing via systemic investing, that will connect this 0.001% of GDP cottage industry, can drive 10% of GDP in technology ecosystem revenues across the continent.
Where I work (Norrsken—not the investment fund), we’re building an in-person platform to bring these scattered conversation threads together and build bridges across the world of financing in Africa. I’m welcoming collaborators and partners who want to build this with me, and taking calls throughout this week.
Email: abraham [at] norrsken [dot] org.
Important note (because we are in the age where nuance dies early): Technology will not solve people, politics or governance. People will solve people.