Bigger than the Banks: Natalie Jabangwe-Morris on Africa’s movement to mobile money
The wave of mobile phone use in Africa has not only connected individuals to each other, but has connected many people to mainstream financial services for the first time. In regions where populations were majority unbanked, access to mobile technology has simultaneously unlocked mobile money, and spurred economic growth in societies previously run on informal, cash-based finance. By the end of 2016, the number of registered mobile money accounts in Sub-Saharan Africa stood at 277 million.
The wave of mobile phone use in Africa has not only connected individuals to each other, but has connected many people to mainstream financial services for the first time. In regions where populations were majority unbanked, access to mobile technology has simultaneously unlocked mobile money, and spurred economic growth in societies previously run on informal, cash-based finance. By the end of 2016, the number of registered mobile money accounts in Sub-Saharan Africa stood at 277 million.
It was platforms like Kenya’s M-Pesa that changed the game and paved the way for mobile money innovation in Africa – and those such as Zimbabwe’s EcoCash are continuing this movement to digital cash. Established in 2011, in the first 18 months of doing business EcoCash registered 31% of Zimbabwe’s adult population – with 22% of Zimbabwe’s GDP passing through the platform. Its explosive popularity has seen the platform eclipse the traditional banks and has created a bridge between the informal and formal economies, transforming the way many Zimbabwe’s handle their money.
“On average, mobile phone penetration in Sub-Saharan Africa is above 70%, mobile is a ubiquitous channel for serive delivery, across multiple sectors.”
We spoke to Natalie Jabangwe-Morris, CEO of Ecocash, on the explosion of mobile money in Africa, the future of EcoCash – and, of course, who she's most excited to hear from at The Annual Debate.
You're CEO of EcoCash, EcoNet's mobile payment platform. Where do you think EcoCash has had the biggest impact to date?
Natalie Jabangwe-Morris, Chief Executive Officer, Ecocash
In changing the financial inclusion stratification in Zimbabwe, to an extent Africa. Before EcoCash was launched in 2011, Zimbabwe only banked 10% of its population. 6.5 years on, EcoCash banks 80% of the adult population of Zimbabwe. We have 8 million registered customers, with these, EcoCash accounts for over 70% of the country GDP and is bigger than all banks amalgamated. EcoCash accelerated financial services distribution in Zimbabwe, beyond what local banks achieved in their 100 years of operation. We also launched the first mobile-card wallet in Sub-Saharan Africa. For these milestones, EcoCash is the uncontested recipient of the 2017 Mobile World Congress GLOMO Award – Best Mobile Payment Solution.
It's estimated that six times as many people use mobile money in Sub-Saharan Africa than the global average. Why do you think mobile money has proved so popular on the continent?
Traditional banking has been largely prohibitive than inclusive, with specifity to emerging markets. Financial services eligibility in Africa is largely based on the antiqauted models of collateralisation and employment. In Africa, employment is largely informal & entrepreneurial. The mass economy is not top-down, as would be constructed in developed markets, it’s bottom-up. Bankers have missed out on those portfolios of the unknown, completely failed to profile and rearrange them to offer services through a channel that is pervasive – the mobile phone. On average, mobile phone penetration in Sub-Saharan Africa is above 70%, mobile is a ubiquitous channel for serive delivery, across multiple sectors.
“60% of Africa’s population fall under the age of 25, these are the digital natives, today, connectivity will be imperative to improving access to finance for this demography.”
You're speaking on our panel The Digital Dividend: Leveraging the Power of ICT. How crucial do you think connectivity is to improving access to finance in Africa?
The gains have already started to emerge. In the last 10 years alone, Africa now has a total of over 100 million active mobile wallets, this is one in every 10 adults and far exceeds South Asia, the second largest continent, by adoption of mobile payments wallets, sitting at 40 million active accounts. 60% of Africa’s population fall under the age of 25, these are the digital natives, today, connectivity will be imperative to improving access to finance for this demography. There are more mobile phones than there is ownership of toothbrushes in rural Africa, on a 1:1 ratio, tells you already, that connectivity is priority! Nothwithstanding cable access to the internet, this will inevitably drive new ways of commerce and affordability in new access to services, electronically.
You're one of the youngest CEO's to run a mobile money business in Africa. What has been most exciting about leading EcoCash?
EcoCash has a very young, dynamic and talented team. Driven on a culture of disruption, ability to fail fast and empowered to experiment, responsibly of course. This has been by far, the most rewarding experience. We execute swiftly, and are passionate about transformation, today! We get our thrill form seeing how impactful our solutions are at market. Needs must! A sheer belief in solving challenges through meticulous application of technological solutions. It’s my first job in Africa, after developing my financial technology career in retail and investment banking across Europe and the US and to come home and replicate world class, in Africa, has been ultimately fulfilling.
Ecocash already enables its customers to transfer money, pay for goods and services, access loans, buy airtime – where are you looking to take EcoCash in the future?
Difficult question, there is infinite opportunities in fintech, particularly on the African continent. Banks have dominated for too long, but I doubt they know well enough how to analyse unfamilair profiles, productise and monetise, aptly. A convergence of connectivity, telecoms data profiling for financial services offering, opens up other unchartered domains – for example, targeted credit. Beyond this, access to markets, if you have a wallet you must be able to pay regional, at most, global. Admittedly, foreign exchange regulation remains a challenge across Africa, but who knows what blockchain will deliver in solving for this.
Which of our speakers at The Annual Debate 2018 are you looking forward to hearing from?
All speakers, actually! I love to learn anew. So, really looking forward to all interactions.
Hear more from Natalie Jabangwe-Morris, join us at The Annual Debate 2018, where Natalie will be speaking on our panel The Digital Dividend: Leveraging the Power of ICT.
Connecting the Unconnected: Akinwale Goodluck on supporting Africa’s Mobile Revolution
There is a mobile revolution unfolding in Africa - a revolution not only in how people communicate – but how they do business. Throwing off long-held assumptions about Africa’s technological development, the Continent’s populations are taking up the mobile phone – and its access to the internet – in their droves.
There is a mobile revolution unfolding in Africa - a revolution not only in how people communicate – but how they do business. Throwing off long-held assumptions about Africa’s technological development, the Continent’s populations are taking up the mobile phone – and its access to the internet – in their droves.
Indeed, Africa has embraced mobile uptake on an overwhelming scale. The World Bank reported in 2014 that 12% of those in Sub-Saharan Africa had a mobile money account, compared with a global average of 2% - and the disparity is likely to be even more significant today. Sub-Saharan Africa’s compound annual growth rate for mobile subscribers is 50% higher than the global average – estimated to hit a billion subscribers by 2020.
“It’s estimated every 10% of mobile broadband penetration adds 0.1 to 0.2% to an African nation’s economic growth.”
The economic implications of this growth are already very visible; with mobile technologies generating 7.7% of Sub-Saharan Africa’s GDP in 2016. Such opportunity needs to be nurtured however, ensuring that connectivity is inclusive, innovative and designed to bring together both public and private sector interests. These are the goals which GSMA, who represent mobile operators internationally, are committed to pursuing in Africa – and to great success. Incubating African technology start-ups and working with mobile operators to support the UN’s Sustainable Development Goals through digital innovation, as well as providing comprehensive industry research - GSMA are a vital voice in a rapidly expanding sector.
We spoke to Akinwale Goodluck, Head of Africa at GSMA, on the challenges facing Africa’s connectivity, the company’s work with Africa tech start-ups – and of course, who he’s looking forward to hearing from at The Annual Debate 2018.
Akinwale Goodluck, Head of Africa at GSMA
You're speaking on our panel The Digital Dividend: Leveraging the Power of ICT. What do you believe is the greatest challenge facing Africa's expansion of digital connectivity?
I believe the greatest challenge to the expansion of digital connectivity in Africa is the affordability paradigm. Affordability is crucial if we must connect everyone and everything ultimately in Africa. Low purchasing power coupled with high total cost of mobile ownership presents a challenge for all players and an opportunity for innovation, a paradigm shift by all stakeholders and a commitment to universal access and mobile broadband services.
There is a need for governments in Africa to make spectrum but most importantly, the lower bands (700Mz and 800MHz), available to MNOs at a fair cost and with less restrictions regarding how or what technology it employs. This is the trade-off between treasury receivables / budget deficits and the overarching objective to connect everyone.
MNOs must also look at new innovative ways to connect the unconnected and they must embrace practices that promote network and infrastructure sharing, lower power cost, reduced roll out cost and address local markets.
Government and industry must work together to remove or reduce punitive sector specific taxes - in some countries the compounded tax burden on mobile operators exceeds 50%. This is something which must be reduced when considering that it’s estimated every 10% of mobile broadband penetration adds 0.1 to 0.2% to an African nation’s economic growth.
GSMA's Mobile Development Programme is helping to achieve the UN's Sustainable Development Goals. Where has the programme had an impact so far?
Mobile is the single technology which cuts across geographies, cultures and income levels in bringing the Sustainable Development Goals to life. The GSMA has a collaborative approach between two programmes: our donor funded initiatives through the Mobile for Development programme delivers innovations with socio-economic impact in financial services, health, agriculture, water and energy amongst others, across our footprint in the sub-Saharan Africa region. Globally in emerging markets, our work has impacted 30 million lives across 49 countries. On the other hand, the Industry purpose programme highlights our commitment to playing a leading role in the achievement of the Sustainable Development Goals (SDGs).
Ours is the first large industry to align itself to the SDGs; stating a clear intention to contribute and advance the societies in which we operate i.e. connecting everyone and everything to a better future. Through our initiatives such as the Case for Change and Big Data for Social Good the mobile industry is building a better future for people and communities everywhere through innovation and partnerships conducive to meaningful impact. Real Stories by millennials from different countries in the world, including Kenya and Tanzania, have brought to life the impact of mobile in access to affordable health care and information, particularly for our vulnerable citizens such as Mothers and their young children.
“We’ve noticed more start-ups are leveraging mobile technology to scale their innovation. ”
According to GSMA's research, 270 million people in Sub-Saharan Africa now access the internet through mobile devices. What actions do you see as vital in continuing to improve connectivity across the continent?
Digital literacy is a vital tool for increasing and improving adoption of connectivity in Africa. The promotion of basic digital education & skills and the creation of tool kits like the GSMA Mobile Internet Skills Training Toolkit (MISTT) makes available, a set of resources for organisations (including mobile operators) interested in promoting the fundamental skills via the most commonly used internet services (WhatsApp, Facebook, Google, YouTube and Wikipedia).
The availability of local relevant content will be critical and vital for bridging the digital divide. More work and investment are required to stimulate the demand side. Most Africans particularly in the rural areas see no connection or value in the internet as its content remains largely alien in form and substance.
GSMA are working with multiple mobile tech start-ups in Africa through your Ecosystem Accelerator - what do you believe is currently the most exciting technological prospect coming out of Africa?
The GSMA Mobile for Development’s Ecosystem Accelerator Programme currently has a portfolio of 15 startups spread across multiple markets in Africa. Our portfolio of startups represent mobile-led innovations in multiple sectors including agriculture, education, financial inclusion, health and transportation. Most of our startups in Africa leverage mobile money to both pay suppliers and collect payments from customers. Additionally, startups leverage mobile platforms, both on apps and USSD, to deliver products and services fast, cheaply and efficiently.
Over the last 3 years the programme has been in existence, we’ve noticed more start-ups are leveraging mobile technology to scale their innovation. Innovation is sprouting from several industries. With agriculture being a pillar of most African countries, AgriTech is emerging as one of the leading innovation verticals. Our recent calls for the innovation fund applications, EdTech has been one vertical that’s attracts a host of applications. We have 2 EdTechs in our current portfolio. InsureTech is also coming up strongly as insurance companies try to adopt technology and more of the African population take up more insurance products.
Which of our speakers at The Annual Debate 2018 are you looking forward to hearing from?
This is a very difficult question to answer but if I had to answer my bucket list will include Atiku Abubakar and Ana Hadjuka–Shields.
Hear more from Akinwale Goodluck, join us at The Annual Debate 2018, where Akinwale will be speaking on our panel The Digital Dividend: Leveraging the Power of ICT.
Tech transformations: American Tower Corporation on building Africa’s broadband
There is one way of charting Africa’s turn to connectivity: the rise of the mobile. As many have seen, mobile subscription continues to grow in Africa, outpacing every other region worldwide.
Since 2010, American Tower Corporation have established sites across South Africa, Ghana, Uganda and Nigeria; constructing over 8000 towers as part of their wireless network deployment.
We spoke to Hal Hess, President of Latin America and EMEA at American Tower on the transformation of Africa’s ICT sector, the impact of connectivity on the Continent and markets ATC are most excited about going forward.
If there is one way of charting Africa’s turn to connectivity, it is in the rise of the mobile. Mobile subscription continues to grow in Africa, outpacing every other region worldwide. A crucial driver of this is the demand for internet access, and it is a drive which is changing the way Africa is communicating, socializing – and doing business.
“Mobile technology is the primary way for consumers and enterprises to communicate; access the internet and drive economic growth. ”
With this in mind, perhaps it was only a matter of time until American Tower Corporation, one of the US’s largest broadband and wireless technology operators, would develop an interest in the Continent. After successfully establishing themselves in the developing broadband markets of South America, ATC turned their sights to Africa, where an explosion in the population, to a billion people was promising an expanded market – and a whole generation of new internet users.
Regional internet users stood at 110.9 million in 2010, when American Tower Corporation began operation. This figure has been dwarfed by internet use today, with unique subscribers in Africa expected to reach 725 million by 2020. Similarly, American Tower Corporation have gone from strength to strength – since 2010 ATC have established sites across South Africa, Ghana, Uganda and Nigeria; constructing over 8000 towers as part of their wireless network deployment.
“There is also a positive correlation between the diffusion of mobile broadband and a country’s economic development in terms of GDP”
We spoke to Hal Hess, President of Latin America and EMEA at American Tower, on the transformation of Africa’s ICT sector, the impact of connectivity on the Continent – and markets American Tower are most excited about going forward.
Hal Hess, President, Latin America and EMEA, American Tower International
You're giving our keynote address on the transformation of Africa’s ICT sector. How crucial do you think connectivity is to development in Africa?
Connectivity is vital to driving continued development in Africa, and we believe that mobile broadband has the potential to fundamentally transform people’s lives for the better in a number of different ways - everything from improving the region’s economies, to enhancing access to information to the most simple element of improving the ability to communicate with your friends and family.
There are very limited fixed line deployments in most African countries. Therefore, mobile technology is the primary way for consumers and enterprises to communicate, access the internet and drive economic growth. For example, in two of our largest markets in the region, Nigeria and South Africa, less than 1% of the population has access to fixed line communications, meaning that mobile connectivity represented the first opportunity for most Nigerians and South Africans to have access to communications services.
There is also a positive correlation between the diffusion of mobile broadband and a country’s economic development in terms of GDP. A joint study conducted by Ericsson and Imperial College London suggests that a 10% increase in mobile broadband adoption may drive a 0.6 - 2.8% increase on average in economic growth.
It was reported recently that broadband providers were increasing their investment to meet Africa's surge in demand for data. What's key to sustainable improvement in Africa's digital infrastructure?
Sustainable improvement in digital infrastructure is in many ways predicated on maintaining a predictable and fair regulatory environment, which in turn helps to ensure access to capital and allows for transparency throughout the value chain. This includes reasonable spectrum policies, fair tax regimes, measured rules and regulations governing technology, as well as incentives for technology investment.
“We are now looking to play an expanded role in driving industry-wide efficiencies throughout global markets – a great opportunity for us to do that is in Africa”
Having this visibility enables infrastructure providers to most efficiently allocate capital and enter into long-term contracts that serve as the backbone of wireless infrastructure investments, which drives further investment and continued improvement. As a result, we carefully assess the government and regulatory frameworks before entering a market to ensure they have the necessary government, judicial and regulatory framework for us to accurately assess the investment cases in the market.
You entered Ghana and South Africa in 2011, Uganda in 2012, Nigeria in 2015 - where is next for American Tower Corporation? Are there any markets you're especially interested in seeing develop?
We’re always looking for potential incremental investment opportunities. Our first preference for additional investment would be to add more scale in our existing markets given we have the necessary infrastructure in place to support incremental portfolio growth.
We would also be interested in expanding to other markets in the region assuming they pass our three gate investment criteria. Firstly, meeting governmental/legal requirements; democracies with independent judiciaries and legal systems based on Western European tradition. Secondly, a competitive wireless market; at least three strong wireless carriers capable of making long-term investments in their networks, markets with recent or upcoming spectrum auctions and reasonable regulatory regimes. Finally, the potential for scale; attractive entry point with path for us to build a nationwide portfolio and become the largest or second largest tower company
American Tower Corporation is a global provider of wireless communications infrastructure, where do you believe the company has made its biggest impact to date?
We’re proud of our well-diversified portfolio of more than 160,000 sites across 16 countries and five continents, and believe that we have played a significant role in expanding access to broadband connectivity for billions of people within those markets. Our contributions have been different depending on the geography and timing along the continuum of the evolution of wireless ecosystems.
In the United States, we were a founding company in the creation of the independent tower model that commercialized wireless infrastructure owned by the mobile network operators (MNOs), which partly financed the expansion of the wireless broadband industry. This led to our 2010 investments in Africa, first in South Africa and later in Ghana, Uganda and Nigeria, increasing competition and helping to accelerate the deployment of advanced wireless services.
We strongly believe that the independent tower model is the most efficient way to deploy today’s modern wireless networks in the vast majority of geographies. Our focus continues to be not only on driving strong total returns for our shareholders, but also on helping to incrementally drive global connectivity - and that goal applies to all of our served markets.
Additionally, we are now looking to play an expanded role in driving industry-wide efficiencies throughout global markets – a great opportunity for us to do that is in Africa where we are working hard to improve the fuel efficiency of our sites and to drive costs down for the wireless ecosystem as a whole. If we are successful, we are optimistic that the pace of development can be further accelerated, benefiting not only our company, but also the people who reside where we operate.
Hear more from Hal Hess, at The Annual Debate 2018, where he will give a keynote address: Leaders in the Transformation of Africa's ICT Sector.