NewsSouthern AfricaGame-changing fintech, aerospace and energy: Africa's tech test grounds

Wed,12Dec2018

Posted on Friday, 19 January 2018 09:49

Game-changing fintech, aerospace and energy: Africa's tech test grounds

By Nicholas Norbrook and Mark Anderson
 

CYRIL NDEGEYA/AFPNecessity is still the mother of invention, and African companies are leading the way with game-changing fintech, aerospace and energy projects born from local problems

 
From leapfrogs in the ­renewable-energy market to fresh ideas in financial technology, Africa is uprooting the idea that the continent is forever catching up. Just as India and China created a clutch of innovations based on lean processes, African markets where infrastructure and skills constraints have hampered growth are fertile grounds for invention.
 
In renewable energy, this is often driven by falling costs, with solar in particular far cheaper than it was even a few years ago. The International Energy Agency estimates that Africa added nearly 4.5GW of power to its grids from renewable sources in 2016.
 
But sometimes it is an absence of red tape that encourages risk taking. Indeed, some companies have found a lighter regulatory environment has allowed for breakthroughs in mobile payments and drone delivery platforms.
 
This is not to say that Africa should be a guinea pig for all and sundry to test potentially harmful business processes. The failure to enforce environmental regulations properly in the Niger Delta gives a quick perspective on how that story ends. But the fast growth of M-Pesa – which has made East Africa a world leader in money-transfer technologies – shows the potential benefits of nimble innovation.
 
ENERGY: A throwaway idea
 
Dozens of scavengers move slowly through the Reppie rubbish dump in Addis Ababa’s Koshe District, scouring mounds of garbage for metal, plastic and other valuable goods to sell. But this landfill site, which has been the city’s main dump for half a century and was the site of a deadly avalanche that killed 113 people in their homes in March 2017, will soon be generating more positive headlines.
 
It is here, just a few miles down the road from the African Union’s headquarters, that one of the continent’s first waste-to-energy power plants will start producing electricity next year. The plant will consume 420,000tn of waste – about 80% of the city’s total rubbish output – by burning it in accordance with European en­vironmental standards. The plant’s turbines will generate 185GWh of electricity every year – enough to power about 30% of the city’s households.
 
“To us, it’s no longer garbage when it comes in. It’s fuel,” says Samuel Alemayehu, managing director for Africa at Cambridge Industries, one of the companies behind the project. “We take the garbage, convert it into heat, convert the heat into steam, pressurise the steam and that moves the turbine that generates electricity,” he says.
 
The plant is attracting visitors from around the world. On one day in November, Norwegian royalty visited the plant in the morning and South Korean executives toured it after lunch. Cambridge Industries, a London-based renewable energy company, and its partner China National Electric Engineering Company, say the plant is a blueprint for future waste management and electricity generation on the continent.
 
Easily replicable
 
There are already around 800 waste-to-energy plants worldwide, but Africa’s waste is different to that in more developed markets, with a low calorific value and high moisture content. This necessitated a custom-designed plant. “We have identified cities in Africa with populations ranging from three million to seven million where we could build the same exact facility that we’ve built in Addis,” says Samuel. Target cities are Dakar, Douala, Kampala, Nairobi and Lagos, where power shortages are so severe they want to build two plants. In such cities diesel generators pollute the environment while levying huge operating costs on businesses.
 
Similiar projects to the one in Addis are taking off. South Africa’s Johannessburg launched a 3MW landfill gas-to-power project in December 2016. Meanwhile in Kenya, the Gorge Farm Energy Park runs a 2.8MW anaerobic digestion plant that generates electricity from organic waste from a vegetable farm.
 
Samuel says West Africa’s Ebola outbreak demonstrated the desperate need to improve sanitation in Africa’s biggest cities. Urbanisation has dramatically increased the amount of waste that the continent’s cities are producing. The Reppi landslide, too, was a wake-up call to address the problems of landfill. 
 
DRONES: Far-flung flying machines
 
Civil aviation regulations in much of the world were written before the age of the flying robots. Those regulations are remarkably tough in many parts of the world – as befits the rules that govern defying gravity at 900km an hour with passengers on board.
 
But for drones to really start to deliver on their promise, they will need to be integrated into regulatory frameworks. Zipline, a company that has been delivering blood for health centres via fixed-wing drones in Rwanda since October 2016, hopes to convince regulators worldwide about the need to integrate drone operations.
 
Key to the more than 2,000 successful blood deliveries Zipline has made in Rwanda were efforts to get in sync with Rwanda’s air traffic control system. “They basically monitor us like they monitor RwandAir,” says Zipline’s head of global operations, Maggie Jim. “The best way for us to integrate was to minimise the amount of change.”
 
The company has already impressed Tanzanian officials, who will see a similar, if greatly scaled up, set-up launched in early 2018. With four launch sites and more than 2,000 drone flights a day, it will be able to reach 10 million Tanzanians living in remote areas where medical supplies easily spoil during long truck journeys.
 
And after a recent executive order by United States President Donald Trump, which allows cities to take back control of their airspace under the commercial aviation floor of 500ft, Zipline is planning to take drone delivery to the US. 
 
FINTECH: Not just a luxury
 
The Mauritian financial services regulator has introduced a ‘regulatory sandbox’ licence, following hot on the heels of London and Singapore, as it tries to stay at the front of the financial technology (fintech) pack. A regulatory sandbox allows companies to test innovations in real markets. The island’s authorities, who hope to make the country a financial hub that attracts investors who wish to enter African markets, want to attract companies that are experimenting with Bitcoin and other distributed-ledger-­style fintech services.
 
“Banks haven’t proven to be great service providers for the mass customer”, says Mauritius-based Bank One chief executive Ravneet Chowdhury, who spots a gap in the market for companies that can marry telecoms-style ­customer experiences with the deep pockets of financial institutions.
 
And while it may be tempting to think that something like Bitcoin is a rich-world luxury pursuit, Zimbabweans are already proving it has a ready home in Southern Africa. The return of galloping inflation, last seen in 2008, has had many in Harare running to shelter their cash any place they can. Bitcoin prices have shot up at the Harare Bitcoin exchange known as Golix. Reuters reports the exchange traded more than $1m in the month of October alone. 
 
This article came from the December/January 2018 print edition of The Africa Report magazine
 
 


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