Africa’s Silicon Valleys ripen for investment

African countries need to develop the environment and infrastructure to capitalise on the opportunities of a global digital economy that is poised to rake in over $60 trillion in revenues by 2025.

A recent meeting of stakeholders of the Africa50 infrastructure fund warned countries that if they continue at the current rate of industrialisation, and fail to invest in their knowledge economies, they will face 100m jobless citizens across the region by 2050.

“What we need to do as Africa is recognise that it’s not oil or gas or minerals that’s going to determine our competitiveness in the world, it’s knowledge and the ability to innovate and create mega-businesses that are going to be the Google and Facebooks of this world,” the president of the African Development Bank (AfDB) Akinwumi Adesina tells African Business at the Africa50 meeting in Kigali.

“It is passé to say that the comparative advantage of your country depends on the natural resources you have,” he says. “Today you don’t need to have any resources, but you do need very smart brains.”

In order to nurture homegrown talent, governments need to develop world-class innovation hubs, like the US tech capital Silicon Valley, he argues.

Around 440 innovation hubs and centres across the continent are providing a forum for entrepreneurs and startups to access the technology, industrial expertise and financial instruments needed to develop and scale up their businesses. 

“Innovation hubs come into play when there’s an environment that allows them to prosper,” says Nathalie Munyampenda, the managing director of the Next Einstein Forum, which runs a series of conferences for Africa’s science and technology talent.

Innovation ecosystems require basic infrastructure, such as road networks and ports, digital infrastructure including cheap broadband, supportive business and regulatory environments, technology, and talented scientific and mathematical minds, Munyampenda explains. And in too many countries these basics are desperately lacking.

“Today, if we in Africa do not invest in these five pillars, if we do not create affiliations and consortiums that tap into private sector money, and have governments that are pushing ahead, we will be left behind,” she warns. “We are already 97% behind what we should be doing in terms of research and development.”

Financing the future

Rwanda is courting investors for a $1bn innovation hub, the Kigali Innovation City. Co-financed by the Rwandan government and Africa50, the project hopes to create over 50,000 jobs a year. But innovation hubs will lie empty without the talent to fill them, experts say.

“You cannot think about the fourth industrial revolution if you don’t have the pool of talent to participate in it and to support it,” says Africa50’s CEO, Alain Ebobissé. 

Africa50 is drawing from a $871m fund to deploy early-stage risk capital to help lure local and global talent to Africa by giving early-stage startups and hi-tech ventures the financial freedom to grow.

“Startups need that freedom to test out ideas to fail quickly. In Africa we do not yet have an environment that gives people the freedom to fail. That allows people to draw money, prove their concept, maybe fail, and draw some more money. We need organisations and funds that will be that stop-gap so that startups can actually flourish,” adds Munyampenda.

“A lot of our educational systems are training people for the jobs of the past, but we have to train them for the jobs of the future,” Adesina says.

The AfDB has invested $40m in the Kigali Institute of Science and Technology to boost local industry expertise in mathematical sciences in Africa.

“One of the students who passed through the programme sold her business at the age of 27 for about $21m. That’s what I’m talking about,” says Adesina.

Made in Rwanda

The Makerspace Kigali, an innovation lab that sits in a retro blue and yellow office building in an upscale neighbourhood in northern Kigali, is the heart of Rwanda’s startup community.

Opened in 2017 in a partnership between Evonik Foundation, an arm of German chemicals firm Evonik Industries, and the Westerwelle Foundation, the workshop provides Rwanda’s budding entrepreneurs with access to technology, machinery and industrial experts to develop their prototype designs and make products a reality.

“Makerspaces are part of a movement that has been going on since the early 2000s to prototype ideas. The original concept is that people have their machines and collectively they build a workshop together to give people access to machines,” says Bertie Ford, Makerspace Kigali’s 25 year-old British manager and product design engineer.

The workshop is divided across four sectors – agro-tech, textiles, mechtronics and overall product design. The agrotech section features an aquaponics installation where two vats of live fish bubble beneath a large tank of soil and plants. The aquatic agri-system pumps fish waste from the tank into plants, where ammonia is extracted to provide nourishment for crops and a sustainable agriculture model for farmers that consumes 90% less water.

The Makerspace is equipped with industrial design tools such as wood-cutters, digital fabrication and milling machines. A mechtronics section is fitted out with a gleaming electronics station for assembling hi-tech equipment, and a prototype area with multiple 3D printers and scanners.

Makerspace Kigali currently has 104 company members who pay an annual fee to use the space and equipment. Although, they are considering a scholarship programme that selects gifted candidates to access the facilities for free.

One of its clients recently announced that it was building a $70m facility to manufacture cheap solar panels with charging sockets to provide rural families with electricity. NOTS plans to make and sell 900,000 devices in Rwanda, at the cost of around $56, providing electricity under a microloan credit scheme.

“NOTS will make electricity more affordable, more available and much more reliable than kerosene lamps and phone charging kiosks. That’s how we’ll solve Rwanda’s electricity challenge,” says Bart Hartman, NOTS’ chief executive.

But as countries scramble for resources to build their digital ecosystems, areas of the continent are still struggling for electricity to power basic digital technology. Bridging the continent’s infrastructure gap is estimated to cost $160bn a year – without this, the potential of innovation hubs may be a distant dream.

“You can’t have digital technology like the internet without basic infrastructure like electricity to power it,” as Ebobissé of Africa50 points out.