A boom in mobile phone use is creating an explosion of innovation that is changing lives, lifestyles and the economy
It is mid-morning in Nairobi’s iHub, a community space for techies and a kids’ hackathon – where children as young as 10 are learning some of the basics of coding – is in full swing. The hangar-like space boasts table football, a coffee bar and an ambience that is more Seattle than African savannah.
Amid the eager people huddled over laptops and tablets is the towering figure of Erik Hersman, with his bald head and reddish beard. Known to most Kenyans online as @WhiteAfrican, the American, who grew up in East Africa, has become one of the most effective evangelists for the technological future of his adopted country.
The co-founder of both the iHub and Ushahidi, software, which has been used from Haiti to New Zealand to crowd-source information and map crises, wants to challenge the notion of Africa being a single entity blighted by wars and famine.
“In the US I still get asked if they (Africans) have computers and mobile phones,” he says.
When it comes to phones and Kenya, they certainly do. Six years ago the leading local telecom firm, Safaricom, noticed that its customers were sending mobile phone airtime to each other in lieu of cash. They decided to formalise this, calling it M-Pesa, from the Swahili for “cash”, and enable subscribers to deposit money into a mobile account that they could then send to others or pay for things. Simple and text based, it worked on the most basic phones.
Today, Safaricom has almost as many subscribers as Kenya has adults and M-Pesa is used for everything from paying electricity bills and school fees to sending money to relatives upcountry. Cash equivalent to nearly one-third of Kenya’s GDP [US$37.2bn in 2012] washed through the money-transfer service last year.
That success has given Kenya a global reputation as an outlier in the mobile money sector, while the impact of Ushahidi means that Nairobi is now looked to for software innovation.
This has been Africa’s “mobile decade”; there are 74 mobile phones for every 100 Kenyans and, of those who access the internet, 99% do it via a mobile device.
The challenge, says Hersman, will be ensuring that “five or 10 years from now Nairobi is Africa’s tech hub”, ahead of the more populous Lagos, Nigeria’s biggest city, or South Africa’s wealthier Cape Town. There are signs everywhere that this is happening. Along the corridor in the same building as the iHub is a new office for the GSMA, the global telecoms trade association.
Its executive director, Anne Bouverot, says “the rapid pace of mobile adoption has delivered an explosion of innovation and huge economic benefits” and has pumped £20bn into the sub-Saharan African economy. She believes the mobile industry could also fuel the creation of nearly 15 million new jobs by 2020.
Much of that innovation is likely to happen within a few blocks of the iHub, an area now dubbed the “silicon savannah”. Down Nairobi’s busy Ngong Road two more tech hubs have been set up: “88mph”, a seed fund and incubator, and Innovation 4 Africa, a similar venture that shares the same space. A venture capital outfit, looking to invest in startups, called the Savannah Fund, in which Hersman is a partner, has opened above a fashionable bar on the same road.
And it’s not just the locals who are interested in Nairobi. From the balcony of the iHub you can see an impressive new tower block that has sprung up to house the IBM Innovation Centre, the firm’s first research lab in Africa. Fellow tech giants Intel, Nokia, Google and Microsoft are already in the city.
Sceptics have begun to ask where are the other success stories to rival M-Pesa but Phares Kariuki, who left the world of banking to mentor entrepreneurs, says they are looking in the wrong place.
“In Kenya everyone’s opening a mobile venture trying to solve a problem that nobody has,” says Kariuki.
Rather than smartphone apps for the small base of affluent consumers, the boom is happening in software that enables companies to do business.
These ventures are boring by comparison but are part of the reason why Kenya’s export of technology-related services exploded from £11m in 2002 to £240m by 2010. Current estimates put that figure at more than £300m.
There is still a danger that the hype might suffocate innovation. While the Kenyan government deserves credit for delivering the undersea broadband cables that have helped internet access to treble since 2009, the tech boom has been largely a private enterprise.
The authorities are pinning their strategy on a site 40 miles outside Nairobi called Konza Techno City, which boosters claim will turn the scrubland into a futuristic business district. Others are worried that Kenya will mortgage its future on a £10bn white elephant out on the savannah.