How e-commerce innovations are growing Nigeria’s economy
Nigeria may not be well known for its online retail sector, but that’s about to change. Innovators are...
While much of Africa still holds the local market as the epicentre of sales and commerce, awareness is slowly but surely growing that technology will bridge the efficiency gap between tradition and progress.
As a potential mass market, the allure of Africa affects every industry, but often tumultuous and dangerous pockets of overwhelming problems can restrain enthusiasm to act on the allure. Conflict and poverty can be just a few borders away. So, however, can economic growth and stability.
Here’s an astounding experience: look up the population of Africa at Worldometers and watch the counter click too fast to count. There’s no chance of giving an accurate figure here, as it will be out of date by the end of the sentence. In the true spirit of approximation, therefore, we’ll have to settle for almost 1.3 billion, or about 16.6 per cent of the total world population.
Africa is a continent where tradition and progress combine and, occasionally, collide. This harmony, or tension – depending on your point of view – creates a challenging economic profile. Informal work represents a massive 72 per cent of Africa’s economy. Independent workers make a living as best they can, with little or no affiliation with big companies, and no dedicated support infrastructure to furnish them with the latest technology.
Similar workers in more advanced economies might be regarded as independents or entrepreneurs; many in Africa would consider themselves simply ‘surviving’. Yet technology still plays a vital role in their lifestyles.
The Economist states that: “A decade ago there were only 129 million mobile-phone subscriptions in the whole of Africa […] since then the number of active subscriptions has jumped to almost 1bn.” And in 2016 the GSMA suggested “46 per cent of the population in Africa subscribed to mobile services” (as of 2015).
One thing’s for sure: a lot of mobility is going on. A catalyst for a more vibrant economy (getting money moving) is having the means to use mobile payment services, and McKinsey & Company suggests that “Africa is the global leader in mobile money”. The article observes that one in 10 African adults have active mobile money accounts. In terms of informal work, where is all the activity happening, and how is technology being absorbed and leveraged in a fragmented economy?
In Africa, only one in five workers find in employment in the wage economy. How that figure will grow in the future depends on two factors:
Agriculture offers a window into this world. The World Economic Forum states that “70 per cent of Africans make a living through agriculture, and technology could transform their world”. This sector demonstrates the clash between tradition and progress, given that many farmers work in the way they have always worked, like their parents before them, back through the generations.
Many believe they can foresee weather conditions, instinctively know how to treat crop diseases and can lean on a route to market (invariably a local market, with no route or conduit to a larger audience) that has always served them well. Change is coming. In Nigeria, “innovators are coming up with new ways to get locally manufactured products to the masses” as the ease and appeal of e-commerce gradually finds a wider audience.
The trend to e-commerce is driven by tech startups, delivering and consolidating one of the two key pillars of economic progress: technology. The other pillar is attitude, a willingness to give technology a chance – to ‘try it and see’.
Only cultural change can bring about an acceptance that technology can support more efficient practices – from cultivation to transportation to sales and, a word which any traditional marketplace native is yet to fully understand, marketing. Smallholders who are prepared to try it and see are beginning to appreciate the value of easily accessible, and timely, information.
Some of the apps that are helping to not only drive efficiencies but also improve business outcomes for small farmers include:
As a market for the ready adoption of technology, Africa still presents a few hurdles. It can be seen from the examples cited, however, that there is no shortage of innovation taking place – not least in agriculture. This is significant because agriculture makes up around 60 per cent of all jobs in Africa, a land mass that accounts for “nearly half the world’s uncultivated land that can be brought into production”.
Investors still see enormous potential here. In 2016, African tech firms raised a record US$367 million. And in 2017, African tech startups, according to Disrupt Africa, raised over US$195 million. Africa needs technology and people who deliver it. It needs food, and people who know how to grow it. Now the two are coming together, presenting a new dawn and a new culture firmly rooted in tradition.