Top four South African banks boost IT spending

Comments (0) Africa, Featured, Technology

As customers shift to electronic banking, South Africa’s four largest banks spent a total of more than $2 billion on information technology and personnel to run it during the year ending in June. At the same time, two of the four banks, Barclays Africa’s Absa bank and Standard Bank, have closed dozens of branch offices, a further reflection of the growing preference for virtual banking, especially among young consumers. The $2.1 billion IT spend represented about 15 percent of the banks’ total operating costs for the same period, according to Hilton Tarrant, an analyst based in Johannesburg with the tech firm immedia. In addition to Barclays Africa’s Absa and Standard Bank, Tarrant’s analysis includes First National Bank and Nedbank. Tarrant also said IT spending is increasing, led by Standard and Barclays. For example, Standard Bank’s IT spending, including salaries, totaled $900 million in 2015, up 11 percent from the year before. Barclays Africa spent $480 million, a seven percent increase over the prior year.

Trend expected to continue

“The trend is only going to accelerate as transactions continue to be offloaded to Internet and mobile banking,” Tarrant said, noting that native mobile banking apps with better security would also drive the appeal of electronic banking. In total, the four banks have reduced the number of branches in South Africa from 3,005 in 2011 to 2,862 at the end of 2015, a reduction of 143 branch offices or five percent, according to Tarrant. Barclay’s Absa closed more than 100 branches in the last five years, and Standard Bank over 50. First National Bank has about the same number of branches as it had in 2011 and Nedbank has added 13 branch offices. In 2015, Barclay’s Absa had the largest footprint of the four with 784 branches. First National Bank had 723, Nedbank 708 and Standard Bank 647.

Branch offices incur high costs

While there have been complaints about bank branch closings, Tarrant said that is a good idea, given high costs to operate them and reduced consumer interest in banking in person, especially among mobile-focused young people. “Traditional banks’ branches have high costs, which is one of the reasons why the companies have pushed hard to shift transactions to electronic channels,” Tarrant said. South Africa is part of a global and continental trend toward electronic banking. In 2014, mobile money transactions generated more than $650 million in revenue in sub-Saharan Africa and the amount is expected to double to $1.3 billion by 2019, according to research by Frost and Sullivan ICT. According to the World Bank, fewer than 25 percent of the 1.4 billion  population of the continent have a bank account while 40 percent have a mobile phone.

Banks dominate mobile market in South Africa

On the continent, South Africa is unusual. With 75 percent of the adult population using banking services, the country’s banks have established themselves the major players in online and mobile transactions. In many other sub-Saharan African countries, where a much smaller share of the population uses any banking services, mobile service providers dominate the marketplace. Earlier this year, a top East African bank announced plans to challenge a major telecommunications operator to gain a larger share of Kenya’s electronic banking market. Banks in Cameroon, Mali and Nigeria also are trying to tap into the growing market of electronic payments.

In contrast, efforts by telecommunications companies to crack the South African electronic money market have foundered. The African telecom giant MTN in September announced it would halt its mobile money service, saying it was not commercially viable. It was the second telecom to drop service in South Africa this year. In May, Vodacom, a Vodafone subsidiary and the nation’s largest mobile network, announced it was throwing in the towel after its M-Pesa service – popular in other countries including Kenya – failed to catch on. The company had hoped to sign up 10 million South African users when it launched M-Pesa in 2010. However, by 2015, only one million people had signed up and only 76,000 were active on the platform.

Read more

Jamila Abass: Changing the face of farming in Africa

Comments (0) Agriculture, Featured, Technology

Jamila Abass is a shining example of the young, innovative, tech-focused generation emerging throughout Africa. Her business, M-Farm – a tech solution that provides valuable services to Kenya’s farmers – is a fantastic model of how technology is breaking down long-standing barriers. Early in her life, Abass worked tending crops in her family’s small kitchen garden. She grew and sold kale and coriander, giving her perspective on the agricultural industry, and playing a key part in her later interest in rural development. Abass proved to be a gifted student. She went on to study Computer Software Engineering at the Université Abdelmalek Essaâdi Tétouan in Morocco. After graduating in 2009, Abass teamed up with fellow tech entrepreneur Susan Oguya. They were both perturbed by the state of Kenya’s farming industry. Abass said, “The newspapers always had sad stories of farmers getting exploited by middlemen.” She explained that unscrupulous intermediaries were leveraging farmers into selling their produce for a fraction of their true market value; a situation which had been ongoing for decades.

Tackling the exploitation of farmers

Abass and Oguya wanted to develop a solution to tackle this issue. They conceptualized a digital platform that farmers could access through their mobile phones. They theorized that this marketplace would arm farmers with the information they needed to protect themselves and make smarter decisions. Looking back, Abass explained “They (farmers) had no information and no alternative market. We wanted to close that information gap between the farmers and the market”.

Soon after coming up with the idea, the pair took their concept to the IPO48 challenge, a kick-starter designed to support promising online solutions. Abass and Oguya won a US$10,000 dollar prize and subsequently began building M-Farm. M-Farm began as an SMS service by which farmers could check the daily prices for over 40 popular crops, and identify buyers throughout the country. Through partnering with renowned tech startup M-Pesa, M-farm allowed farmers to make and receive mobile payments. With mobile phone technology widely available across Kenya, M-Farm is an affordable option for even the poorest rural farmers. By 2012, Abass had over 5,400 users on the platform. These farmers had managed to more than double their profits, thanks to the direct links M-Farm offered with legitimate buyers and exporters.

Progress, but some still struggling

In late 2012, M-Farm made the finals of the highly prestigious Unreasonable Institute Exhibition. M- Farm’s success was on full display, and Abass’s excellent presentation brought valuable exposure to the firm, ultimately attracting further investment. With financing secured, Abass and the team looked at ways that they could improve their service. They identified that for some farmers, simply providing them with pricing information was not enough to improve their fortunes. Many were still struggling to access the markets and get a fair price for their crops.

Abass identified that rural growers were producing in low volume, and that for major buyers, it was impractical and expensive to acquire the produce they needed from multiple small-scale enterprises. To counter this, M-Farm launched its group selling tool this enabled local farmers to form cooperatives, making their produce more attractive and easier to sell. Abass quickly extended the cooperative model by rolling out a buyer's cooperative feature, whereby farmers can band together and negotiate better purchases of fertilizer, seeds, and equipment.

International ambitions

The M-Farm platform has evolved to become a powerful and promising tool. As Abass said, “There are so many things you can do with the technology.” Today the platform offers transport services to farmers through partnerships with local logistics and haulage businesses. M-Farm now also arms its members with valuable industry knowledge. For instance, farmers can access expert agricultural advice, forecasts for future crop demands, or guidance on international regulations such as prohibited chemicals and pesticides.

Abass has also made inroads into the international market, establishing links with major retailers in Europe who are keen to run a socially responsible supply chain. With over 22,000 clients now thriving in Kenya, it’s clear Abass has a seriously effective business. She now intends to scale M-Farm globally, bringing its considerable benefits to farmers in other emerging countries. The story of Abass and M-Farm signifies how entrepreneurship and technology are changing the face of Africa.

Read more

New bank SunTrust focuses on tech to make changes in Nigeria

Comments (0) Africa, Featured, Technology

A new player has arrived in Nigeria’s banking sector. SunTrust Bank officially opened for business last month, becoming the first new institution to be granted licensing by the Central Bank of Nigeria since 2001. SunTrust has been making headlines due to its innovative, tech-driven business model that stands in stark contrast to Nigeria’s traditional financial entities. The bank could prove to be a disruptive force within the country’s banking space.

A technology based bank is born

Muhammad Jibrin, the bank’s Chief Executive Officer, has been one of the driving forces behind the bank’s emergence. Jibrin founded SunTrust in 2009, at the time the firm was focused solely on mortgage lending. After enjoying years of steady success, the board decided to pursue a commercial banking license, a notoriously difficult proposition given Nigeria’s stringent financial controls. SunTrust finally obtained the coveted license in late in 2015, becoming the first new bank to do so since the beginning of the 2000s. Jibrin and the SunTrust team have a vision of providing a modern, technology driven service that will change the way banking works within Nigeria. He said “Banking is no longer where you go, it is what people do. Therefore, the only thing that can stand the future is no longer physical branches, but banking services that would be driven by technology.”

New ways of banking can help millions

Nigeria remains woefully underserviced by the traditional banks in the nation. An estimated 40 Million adult Nigerians are currently “unbanked”. SunTrust is looking to bring quality banking services to this demographic. In order to achieve this SunTrust has laid out a daring strategy and ambitious goals. The bank only runs a handful of branches as it is restricted in where it can physically operate by its regional license. However, this suits their strategy just fine. SunTrust intends to attract customers the length and breadth of the country by focusing on purely electronic banking services. Jibrin said: “We will be everywhere because we are not limited by barriers or by physical location; technology is not limited physically and therefore whether you are in the South-East or in the North, we can easily service you.” Less branches on the ground means less overheads; SunTrust says that it will be able to offer the same services, more cheaply and effectively than the traditionally encumbered financial institutions.

SunTrust focused on the future of finance

Jibrin recently made an excellent point about the future of banking in Nigeria. He pointed out that 70% of Nigeria’s population could currently be classified as “young” and that this demographic is growing rapidly. The country has approximately 170 million citizens, yet this number will be as high as 220 million by 2025, making Nigeria one of the youngest countries on the planet. It is this growing, young and tech savvy population who largely don’t have access to, or can’t afford traditional banking services. SunTrust intends to be the bank for the new Nigerian generation. SunTrust has received praise for its courageous decision to launch in the midst of a recession, an unprecedented event for a financial institution. Charles Onyema Ugboko, SunTrust’s Chairman, said that going into business at this time proved that “the board and management are committed to the growth of the Nigerian economy.” Similarly, SunTrust has been lauded for its intent to focus on small and medium scale enterprises. These companies have long struggled to obtain credit from traditional banks, yet SunTrust intends to break the mold by placing them in clusters and cooperatives which will help to mitigate risk. The bank’s board is dedicated to this strategy as they feel that these underserviced businesses hold immense potential to drive growth In Nigeria.

Read more

South Africa leads the way with renewable energy

Comments (0) Africa, Featured, Technology

Long dependent on coal, South Africa has become the leader on the continent in developing renewable energy sources thanks in part to a competitive bidding process that helps keep costs low. South Africa had accepted a total of 92 projects providing an estimated 6,300 megawatts as of April. The projects represent more than $13 billion in private investment.

The Cookhouse wind farm on the country’s eastern cape is the largest installation, producing 138 megawatts of electricity since it started feeding the power grid in 2014. But wind, solar and biomass projects are popping up all over the countryside. Still, South Africa remains highly dependent on fossil fuels. It is the 11 th largest emitter of carbon output from energy use in the world. But it is making progress with renewables. Tina Joemat-Pettersson, South Africa’s minister of energy said the country had added a total of about 4,300 megawatts of renewable energy capacity between 2011 and 2015 alone.

Low cost drives development

One driver is cost. By last year, the price of wind energy from new projects had dropped to five cents per kilowatt-hour, about half the cost of coal. “Not only is technology producing much cleaner power, it is doing so at a lower cost than traditional fossil fuel technologies,” Evan Rice, chief executive of Greencape, a government funded not-for- profit development agency in Cape Town, said.

In partnership with the city of Cape Town, the national government, and Germany, Greencape is launching the South African Renewable Energy Technology Center, which will train 250 technicians annually to operate renewable energy systems around the country.

Bidding process plays a role

Anton Eberhard, a professor at the Graduate School of Business at the University of Cape Town, said South Africa’s competitive bidding process has helped keep costs low while assuring efficient development. Rather than negotiating with a vendor directly on a case-by- case basis, the bidding process uses competitive tenders and may give awards to multiple bidders,

Eberhard said. He said the transparent process leaves less room for corruption, which has hampered development efforts in other countries. The process also offers financial advantages, Eberhard said, noting that prices bids had dropped by 48 percent for wind and 71 percent for solar energy over the course of four rounds of bids during the past several years.

He said advances in battery technology will reduce the problem of interuptions in wind and solar power when there is no wind or sun. This will drive more development of these resources and reduce reliance on fossil fuels.

Energy installations produce jobs

The developments are also benefitting local communities. For example, a factory that will produce wind towers in the economically depressed township of Atlantis outside Cape Town is expected to employ 200 people to build 150 towers a year. Rice expects employment to grow as production ramps up. Also, 15 percent of the sale of energy itself goes into a community trust that enables local trustees to funnel money into education, health care and economic development locally.

Renewable energy developments will “transform rural communities in terms of health care, education, job creation and a raft of other interventions,” said Johan van den Berg, director of the South African Wind Energy Association.

Nation still banks on fossil fuels

Despite the promise of renewables, South Africa is not turning away from fossil fuels entirely. The government plans to open up 20 percent of the country to shale fracking and President Jacob Zuma has approved a deal to buy eight nuclear power plants from Russia at a cost of $84 billion.

The country is also building Medupi, the largest dry cooled coal-fired power station in the world. Construction began in 2007 but has been mired in cost overruns and delays for years. Once completed, it is expected to produce more than 4,000 megawatts, about the same amount that South Africa developed with renewable projects in just four years. Still, Berg and others see a bright future for renewables in South Africa and beyond.

The continent, he said, has “the opportunity to leapfrog the old centralized large scale fossil fuel power and big grid paradigm. With technology and project prices continuing to drop, and rapid breakthroughs in battery and other storage technologies, I have no doubt that renewables will address all of our power needs in time.”

Read more

With fiber optics, Ivory Coast seeks to become a tech hub

Comments (0) Africa, Featured, Technology

Pushing its nascent digital economy to catch up with its booming commerce, Ivory Coast is investing $165 million to lay more than 3,000 miles of additional fiber optic cable. The West African nation has already installed nearly 400 miles of fiber optic cables and planned to add another nearly 900 miles this year, according to Andre Augustine Apete, Minister of information and communications technology. When the work is completed, the country will have more than 4,000 miles of cable, about one-fifth of its goal of more than 12,000 miles. As Ivory Coast emerges from a decade of political turmoil, the government has adopted an ambitious agenda of investment in infrastructure that has driven economic growth to about nine percent during the past four years, one of the highest growth rates on the continent. While commodities-reliant economies elsewhere in Africa have slowed, Ivory Coast posted growth of 8.4 percent for its gross domestic product and projects growth of 8.5 percent this year, according to the World Bank. The country has seen large increases in overall production, particularly in agriculture, as a result of regulatory reforms, public investment programs and infrastructure development.

Mobile banking, shopping boom

The world’s top cocoa producer, Ivory Coast has also experienced a boom in digital activity driven by mobile banking and shopping that total nearly $2 million profits a day, outpacing traditional banking. “I don’t think all our banks put together are doing as much”, Apete said. However, the government has more ambitious plans to grow the emerging digital economy, which today directly or indirectly employs about 150,000 people out of the country’s population of more than 20 million. Until recently, mobile access has dominated the marketplace with more than 85 percent penetration, while the internet and broadband sectors have been largely undeveloped in the Ivory Coast.

High costs limit development

High international bandwidth costs played a major role in limiting development because the unique submarine fiber optic cable served merely Ivory Coast. With the landing of a second cable in 2011 and as many as three additional cables expected to be added, prices have begun to decline. Another major development in Ivory Coast was the introduction of 3G mobile services in 2012, with the launch of the first 3.5G mobile broadband service. The wide geographic reach promised by 12,000 miles of fiber optic cable is intended to position the country to develop a booming digital economy. Fiber optic cable is much less expensive than copper wire, and, importantly for digital communications and data, it has a higher carrying capacity and provide fastest broadband connexion.

Ivory Coast aims to become a regional tech hub

Innocent N’Dry, head of new technologies, innovation and services development at Ubifrance in Abidjan, said the Ivorian government wants the country to become a regional hub for communications and information technology. The sector has seen sustained growth in the past decade, and it was one of only a few countries in West Africa that obtained 3G coverage by 2012. However, the lack of a fiber-optic network has held the country back at a time when technological entrepreneurship is emerging. “In terms of young companies and new technologies, there is real entrepreneurial dynamism, with the creation of incubators,’’ N’Dry said. He cited development of the Orange Technocenter in Abidjan, where marketing, research and engineering teams develop new products and services for the Orang telecommunication company’s customers.

Support for startups is key

N’Dry said Ivory Coast is emulating a model from Senegal in which the government provides support for young companies. To encourage new digital businesses, the Ivory Coast government implemented a free zone dedicated to information and communication technology companies. More recently, the government in July announced a fund of more than $260 million to strengthen the infrastructure for tech innovation and to support tech companies, especially startups. The fund, created with support from the African Development Bank, will also be used to help establish networks of investors and to train entrepreneurs from Ivory Coast and other countries in the region.

Mobile improvements sought

While the Ivory Coast government seeks to develop broadband capacity, it is also moving to encourage improvements in mobile services. This year, Ivory Coast will limit the number of operating licenses for telecoms to four. Three companies, which account for 96 percent of the country’s more than 20 million mobile subscriptions, will be re-licensed. They are France’s Orange, South Africa’s MTN and Mov, which was sold the Morocco Telecom by the United Arab Emirates’ Etisalat in 2014. At the same time, the government said it was withdrawing the licenses of several smaller mobile operators, stating that they had not paid for due taxes and fees. Apete said smaller companies might have the opportunity to merge into one single company controlled if a new majority shareholder emerges. “We are leaving this fourth place free in case a significant operator comes in tomorrow and says it’s interested. Those companies can then join with it”, Apete said.

Read more

Zambia fights drought with an unlikely weapon: sun

Comments (0) Africa, Health, Technology

Zambia is currently in the midst of the worst drought the country has faced ever. Partly due to the El-Niño weather cycle, the lack of water has severely affected large swathes of the country notably in the southern regions where rainfall is particularly low.  In order to fight dramatic consequences of drought on Zambia’s most affected regions in 2015 the government focused on sun as a resource to help address the crisis by developing solar technology.

The case of Kanzungula’s solar powered pumps

Kazungula is a rural district located in the country’s far south. Its parched lands saw only 40mm of rain fall between November 2015 and January this year. Zambia’s Climate Chance Secretariat (CSS) identified Kazungula as an area in desperate need of attention which represented an ideal testing ground for a new solar powered scheme. Three new solar installations were built throughout Kazunglula as part of the project. Solar powered schemes involved drilling a borehole 50-60 meters deep into the arid earth to access the water table far below into the ground. Once water struck, a solar powered pump brings clean water to large storage tanks on the surface. The solar array element is critical in this process as it powers reliable water extraction in remote areas with no access to the main grid. For locals in Kazungula, the results have been nothing short of life-changing. Munji Malambo a 16 year old boy who lives in the area said in an interview with Thompson Reuters that “before this (borehole) we used to walk long distances every morning to get water before coming back to go to school […]. Most of the shallow wells in the area had dried up and the closest one was two kilometers away. Sometimes the water would get very dirty and not safe to drink.”

Implications for the future

The success of the Kazungula schemes has prompted plans for 200 installations of solar powered pumps across Zambia that the CSS hopes to complete within two years. According to Zambia’s Ministry of Finance droughtshave costs the economy an estimated US$13.8 billion over the last 30 years.  Solar schemes have then turned out to be real value for money to local and national governments. For instance, the three projects in Kazungula cost a mere $6,100 dollars. What’s more, the costs of solar installations have plummeted almost 50% over the last year. Contractors are now bidding to provide solar schemes at lower cost per MW than coal-fired generators, the cheapest historical source of energy. Solar pumping solutions like those recently used in Zambia are now being recognized as a major tool to be utilized across the African continent to fight drought consequences. With the obstacle of price removed solar energy with its many applications is set to proliferate throughout Africa.

Caution and diligence are needed

For nations such as Zambia which rely heavily on hydroelectric plants drought has placed a major strain on power production. As a result there has been a major shift to chopping and burning lumber for energy. Unfortunately this can negatively affect the water system, causing instability to recharge rates while affecting runoff to bodies of water. In the long term solar installations can help to address the energy shortage but major schemes take time to implement. Similarly, oversight is needed to manage borehole schemes themselves. Excessive drilling can cause serious consequences for the long term health of water systems. Water management is complex, and governments need to make sure the correct expertise and regulation is in place. If properly managed solar-pumping projects can become a significant ally to Africa in its fight against drought.


Read more

Study: Mobile levels the banking playing field

Comments (0) Africa, Technology

Mobile phone ecosystems and favorable regulatory environments areeasing access to banking and other financial services in Kenya and other African countries, even among populations that are typically marginalised from banking services. A study of 26 countries led globally by the Brookings Institution gave Kenya the highest rating – a score of 84 percent – for “financial inclusion” of woman, migrants and youth, who often are left out of the financial services system. Four other African nations received relatively high scores: South Africa (78 percent), Uganda (78 percent), and Rwanda (76 percent). Among the other countries ranked were Nigeria (72 percent), Tanzania (68 percent), Zambia (67 percent), and Malawi (61 percent). Ethiopia and Egypt hit the lowest rankings, respectively 53 percent and 49 percent. The rankings were based on four factors: national commitment, the regulatory environment, mobile capacity and adoption of traditional and digital financial services.

Survey finds increased inclusion

A survey conducted by FinAccess echoed that of Brookings showing that the number of Kenyans having access to the banking system had grown by 50 percent since 2006. The study states that in 2016, 75 percent of Kenyans had an access to financing, an increase from 67 percent three years earlier. On the other hand the Brookings Institution study revealed that Kenya’s financial inclusion landscape has benefited from the “country’s vibrant mobile money ecosystem, which features exceptionally high adoption rates – the highest of any country (in the study) by about 23 percentage points.” According to Brookings, Kenya is considered as the most mature mobile money market in the world, driven by the widespread use of the M-PESA service offered by Safaricom. As of 2015, Kenya was one of only 19 markets globally with more mobile money accounts than bank accounts. This success is explaied by government’s commitment to reinforce access to financing opportunities. Kenya’s government is a founding member of the Better Than Cash Alliance, which provides resources to ease transitions to electronic banking. Kenya’s Vision 2030 National Development Strategy highlighted the importance of inclusive finance and set a target for decreasing the proportion of the population without access to financial services.

Governments regulations to allow access to financial services

The country has also implemented regulation designed to lower the risk of fraud, promote competition in the financial sector and increase access to financial services, Brooking said. In a key regulatory change, Kenya enacted in 2009 guidelines to enable banks to name third-party agents such as post offices, markets, pharmacies, gas stations and other businesses in order to make transactions more convenient. In 2014, the government of Kenya launched a Government Digital Payments program to facilitate people-to-government payments through digital channels. By accessing a web portal, individuals can make digital payments for services such as driver’s license and passport applications. The report also pointed out that Kenyan banks have made high-level commitments to financial inclusion.

South Africa put forward

Mobile is also driving inclusion in South Africa that ranked fourth on the Brookings Institution list after Columbia and Brazil. About 70 percent of the population aged 15 or older in South Africa has an account with a mobile money provider or with a financial institution, the report said. However, regulatory challenges have slowed adoption of mobile money accounts. While South Africa does not have a formal policy to promote inclusion, the government has defined it is a priority. The report noted that South Africa has a much more robust traditional banking structure than other countries in the study. South Africa has indeed more than 10 commercial bank branches and about 66 ATMS for every 100,000 adults. Still, a Finscope South Africa survey found that about one sixth of adults in South Africa do not have a bank account or other financial services.

Uganda with large number of mobile accounts

Uganda has committed itself to increasing the number of financially included citizens from 54 percent in 2013 to at least 70 percent in 2017 according to the Brookings report. Recent regulatory changes to promote offerings of financial services through agents should drive increases in access to digital financial services in Uganda, which has already seen a proliferation of mobile money services and has the second highest level of mobile money account ownership in the study. A 2015 InterMedia survey found that about 40 percent of Ugandan adults age 15 and older were financially included, with 35 percent of adults holding mobile money accounts. Rwanda has also benefited from mobile adoption along with the expansion of community savings and credit cooperatives and agent banking locations. A 2016 FinScope survey found that financial exclusion among Rwandans aged 16 and older declined by 17 percentage points in the past four years. Chile, Mexico and Nigeria rounded out the top 10, the report said.

Egypt, Ethiopia ranked lowest

Ethiopia and Egypt both ranked at the bottom of the Brookings Institution list with much lower mobile capacity and adoption of traditional or digital banking services. In Egypt, the report said, adoption of banking services is relatively low with only about 14 percent of those aged  15 or older holding a formal bank account, a level it said was comparable to other countries in the Middle East. While mobile penetration is high, use of mobile money services has not kept pace. The report said Egypt’s political turmoil was likely to slow movement towards better access to banking services. Ethiopia also had low adoption of financial services with only about 22 percent of adults having a bank or mobile money account. While the country has sought to promote financial inclusion, its mobile capacity is also low.

Read more

In Madagascar, medical drones to the rescue

Comments (0) Africa, Health, Technology

While drones are thought of mostly as weapons of war, the robotic, unmanned aircraft may play a life-saving role in remote regions that do not have access to health care. In Madagascar, the American medical drone manufacturer Vayu, Inc., and New York’s Stony Brook University, are testing use of drones to deliver medicine and equipment to remote areas. According to Dr. Peter Small, founding director of the university’s Global Health Institute, 70 percent of the population of the island that lies off east Africa live in very rural settings, including a significant number who dwell in remote settings that can only be reached by foot. “These are places that are only accessible on foot; you can’t even get a bicycle there. By using drones we can not only fly out to villages, but collect diagnostic specimens and deliver care,” Small told Digital Trends. “It is really revolutionary.”

University, country in longstanding partnership

Stony Brook University has a longstanding relationship with Madagascar, which has one of the most important and diverse ecosystems in the world. For three decades, scientists and students at Stony Brook’s ValBio Center, a 15,000-square- foot research station, have worked the island residents to bolster conservation efforts while improving residents’ quality of life. The center is located on the edge of Madagascar’s Ronamafana National Park. The university’s Global Health Institute, which has a $10 million endowment, is teaming up with Vayu, Inc., a Michigan aviation company that was launched in 2014. With more than $1.1 million in investment, the start up is focused on building affordable drone technology to provide medical aid and supplies across rugged terrain and during times of disaster. The drone can take off and land like a helicopter and is able to fly long distances.

Long-range mission accomplished

With the backing of Madagascar’s government and the U.S. Agency for International Development, the project recently achieved the world’s first long-range, autonomous drone flight. The drone collected blood and stool samples from rural villages and flew them to the ValBio center for testing. Small said the potential of drone technology to improve health care in remote areas is enormous. For example, he said a health worker who cannot diagnose a cough in a patient might be able to use a beacon to call a drone. The drone could then collect a sputum sample and fly it to lab for diagnosis then fly medications back to the patient’s location. The entire operation might take as little as a couple of days, he noted. “Drones will find innumerable uses, such as accelerating diagnosis of tuberculosis and ensuring delivery of vaccines,” Small said. Tuberculosis and many other diseases that plague developing countries, require diagnosis in a lab and stool and blood samples must be transported quickly. That is why it is critical in places like Madagascar to find an alternative to cumbersome travel by road or pathway.

Global impact likely

The organizers believe their partnership will produce significant progress in delivering quick diagnosis and medications for remote communities that lack health care professionals or facilities. Vayu in particular was founded with the purpose of developing drones for medical transport in hard-to- reach areas. “Vayu’s accomplishment is significant for public health in developing countries, where limited access hinders healthcare and it is for the future of autonomous unmanned vehicles,” said Vayu’s CEO, Daniel Pepper, a former international journalist and medical student-turned- founder of Vayu. The project could have global impact. Stony Brook University President Samuel L. Stanley Jr., MD, a nationally renowned expert in emerging infectious diseases, believes that the benefits of this partnership will likely expand well beyond Madagascar. “Global health is an immediate problem for everyone,” he said, noting that commonplace air travel has shattered natural isolation. “Advances in health delivery and implementation (in other parts of the world) can have positive impacts in the U.S. as well. The benefits of promoting health worldwide are immense.” A similar effort is already under way in Rwanda, were a Silicon Valley start up is using drones to deliver medicine and blood to patients. Zipline International said the unpiloted aircraft will transport supplies to hospitals and medical centers around the country, forming the world’s first national drone delivery system. Zipline International said it plans to expand the service to other countries later this year.

Read more

Tech start-up MAGNiTT and its founder Philip Bahoshy

Comments (0) Africa, Business, Leaders, Middle East, Technology

Philip Bahoshy and his groundbreaking company MAGNiTT are revolutionizing the start-up industry. What’s interesting is that MAGNiTT is itself a start-up firm. So how is Bahoshy simultaneously helping new companies, while nurturing his own venture through its infancy period? Bahoshy, 31, was raised in the U.K and has Iraqi roots. He obtained a BSc in Economics from the prestigious London School of Economics which he completed in 2006. In 2007, Bahoshy made a move to Dubai to work for the highly regarded management consultancy firm Oliver Wyman, where he immersed himself in the corporate world. He then made a move to Barclays Wealth in 2010 to work as the chief of staff for the CEO of the Middle East and North Africa (MENA) region.

A start-up for start-ups

His high-flying corporate career bestowed him with an acute understanding of the business and investment landscape in the MENA space. Upon completion of his Master’s degree in 2013, Bahoshy was looking to go solo and start his own firm. Armed with a slew of business ideas, he was keen to get the ball rolling; however, he struggled to find investment, guidance and concept validation. After speaking with other start-ups, Bahoshy came to realize that although Dubai was a vibrant and energetic hub for all kinds of business people, new firms weren’t always making the right connections. He described this as “start-ups struggling in isolation.” This realization gave birth to MAGNiTT, which Bahoshy founded late in 2014. He envisaged building an online ecosystem that would make life easier for start-ups to find the various supports they need, while enabling external parties to identify fledgling firms that they are interested in. Initially, MAGNiTT solely focused on linking start-ups with investment. He explained: “We identified that the real pain point in the region is access to angel funding – basically $100,000 to $250,000.” He elaborated, explaining that start-ups often struggle making the transition from setting up the firm with their own capital, to developing a viable business that is ready for substantial investment from venture capitalists. Linking start-ups with angel investors is often critical if firms are to bridge this gap.

An online pitching platform and more

Bahoshy already had other ideas about how MAGNiTT could develop and provide further services. Firstly, he realized that it can be bewildering for investors and other parties when trying to identify start-ups, and that his product needed to work seamlessly. He focused on making MAGNiTT a streamlined online portal where start-ups have to outline the core concepts of their product. They have to succinctly present their business idea and the problem it solves, their elevator pitch, their target market, the competition, and finally, monetization. External parties can filter and search profiles for concepts they are interested in, analyze the product outline, access further information and ultimately connect with firms that they want to start a dialogue with. Bahoshy was already aware that start-ups need more than just funding to get off the ground. He focused on bringing mentors, accelerator programs, service providers and co-founders to the ecosystem. For start-ups, they can request what kind of support they are looking for. According to MAGNiTT’s data, 58% of start-ups on the site have listed that they are looking for mentorship, 56% are interested in showcasing supports, while 26% are looking for legal support or backing.

Major interest, new features and the future 

In January, Bahoshy had a respectable 200 start-ups signed up to MAGNiTT. Since then the site has exploded and today there are over 1400 start-ups and thousands of users registered on the platform.The site is already helping to forge valuable connections that are taking start-ups to the next level. Bahoshy has said that he wants to bring resources such as video conferencing, legal, marketing and HR services to the site. Additionally, MAGNiTT has recently launched a blog alongside a raft of materials relevant for start-up firms. He is also looking to bring Venture Capitalists into the platform to assist start-ups later down the line. MAGNiTT is itself listed as a start-up on MAGNiTT. Uniquely, its own success is being defined by how well it creates opportunities for all of its parties. For Bahoshy it’s so far so good and he is currently in negotiations with interested investors. It looks as though MAGNiTT is set to take off while bringing other great business ideas along for the ride.

Read more

How institutional obstacles can derail innovative start-ups

Comments (0) Economy, Technology


While it is officially Africa’s biggest economy, the Nigerian nation is struggling. Talk of a recession has darkened the horizon for over a year. The slump of global oil prices have been a hammer blow to the country, while terrorism and oil refinery problems have worsened the situation. Nigeria is currently beholden to oil for 70% of its revenues; it must rebalance its economy to unbind itself from market volatility. The country realises this, and is making an effort to diversify its revenue sources. Many are starting to look toward innovative start-ups to take the country in a new direction.

Big tech potential in Nigeria, Konga leads the way

The conditions in Nigeria are rife for daring tech start-ups to create new solutions and drive growth. Unlike other regions on the continent, Nigeria has high rates of mobile penetration with approximately 75% percent of its 175 million people using mobile phones and data services, making it the largest mobile market in Africa. However, this market is currently woefully underexploited. According to a 2013 report by consultancy firm Mckinsey, only 1.5% of the country’s $500 billion economy took place online. This void presents a glaring opportunity for tech start-ups to create revolutionary new services.

Konga, is one such start-up that seized the initiative. Launched in 21012 Konga was an early pioneer in Nigeria’s tech space, offering online retail services. Today the company is thriving, offering a range of original solutions, which have connected all manner of suppliers and manufacturers to consumers across the country. Other innovators are also following Konga’s lead, carving out their own niche in Nigeria. However for every success, many start-ups struggle to overcome barriers in their way.

Unusual obstacles: reluctance and electricity

The issues facing start-ups vary. Some are complicated whilst some are frustratingly mundane. One simple yet formidable roadblock that start-ups face is the availability of electricity. For a new business trying to carve its own niche in the ecommerce space, a reliable energy supply is essential. However, when energy supply is unreliable, as it often is in Nigeria, a start-up has to generate its own power and purchase alternative fuel sources in order to consistently operate. Ultimately, this can lead to greatly increased costs which squeeze margins, snuffing the life out of promising but cash strapped start-up ventures.

On the whole, Nigerians are still very wary about parting with their money over the internet, for fear of their capital or financial information being stolen. This paranoia is not entirely without merit, as Nigeria is a hotspot for online scamming and phishing schemes. In order to accommodate these fears, some successful start-ups such as Konga and Jumia have built cash-only payment methods into their business. Konga has also recently created a payment system called KongaPay whereby money is held securely until orders are delivered. Despite these efforts reticence remains. While some start-ups have survived, this reluctance has certainly deterred some consumers from using new services, reducing the customer base that new start-ups rely on for growth. Tech firms must realize they need to foster a safe and reliable online payment environment, and convince the masses to use it.

Investment is needed, although so is caution

New accelerator programs sponsored by large foreign entities are helping more start-ups get off the ground, especially in the Fintech space. However, Nigerian banks aren’t traditionally interested in providing loans to risky start-up ventures, and encourage start-ups to attract private equity investors instead. Fortunately, foreign private equity is really starting to pick up in Africa, with more and more investors willing to take a punt on a good idea. Regrettably, these investors sometimes undervalue Nigerian enterprises, and strong-arm inexperienced Nigerians into unfavorable deals.

Other issues such as the countries poor logistics system can bring woe to start-ups who rely on delivering a physical product. Sometimes the lack of skills in critical areas such as accounting and marketing can kill a promising tech business before it can get above ground. In other instances, eager entrepreneurs try to make an idea that has worked elsewhere work in Nigeria; without analysis and adaptation this often leads to the graveyard.

A veritable gauntlet of obstacles faces Nigerian start-ups. However, those that have survived are serving as a shining example to those that wish to follow. Success is more likely if a fledgling firm is aware of the pitfalls ahead, provided they have a great idea; a solid business plan and the business acumen to make it all come together.

Read more