‘The kind of things the AfCFTA is trying to do, it’s really up to us’, says Cassava Technologies’ Pemhiwa

In depth
This article is part of the dossier: Africa must invest in Africa

By Nicholas Norbrook
Posted on Tuesday, 5 July 2022 15:04

Cassava Technologies' CEO Hardy Pemhiwa talks to The Africa Report about technology, trade and the African Continental Free Trade Agreement (AfCFTA). The company operates fibre networks, data centres and other tech-focused business in Africa.

The Africa Report: On the AfCFTA, you’re operating in over a dozen countries on the continent. You, more than anyone, understand the importance of interconnections between different countries, different jurisdictions, different legal systems, different financial systems. The need for a continental architecture that makes business seamless, I guess is obvious from your standpoint. Have you already seen impacts from the AfCFTA? Where could it move faster? And where does it intersect with your business in particular?

Hardy Pemhiwa: In Cassava Technologies, we always say technology leads policy. The kind of things that the AfCFTA is trying to do – the policy-makers will sit and make the pronouncements, at the end of the day, it’s really up to us to, for example, facilitate cross-border payments that are as frictionless as possible. And for us, we are a key enabler to the AfCFTA, whether you look at the payment side or you look at the role that cross-border fibre and cross-border communications work through….

People forget that when we started to build cross-border fibre, 95% of Africa’s voice traffic was switched out of Europe. So literally somebody sitting in Nairobi who was making a call to their counterpart sitting in Kampala, that call was switched in Greenwich in the UK before it came back. So when I have met with those policy-makers I’ve said to them, we built the enabling infrastructure for you before you had the political will to do it.

And specifically, are there things that the AfCFTA could enable which would help you? I’m thinking, for example, in terms of financial systems, the continent is incredibly fractured. It’s very expensive. It’s very difficult to move money from one country to the other. As you say, you’ve built the pipes, but the legislation doesn’t necessarily allow that money to flow. Are there particular steps of continental legislation that would make that easier? 

I think the African Union’s multi-speed approach – if you look at these regional sub-groupings, it’s relatively easy to move shillings within East Africa, whether it’s Tanzanian shillings or Kenyan shillings or Uganda shillings. The Economic Community of West Africa system as you know with the West African franc…So within the regional sub-groupings, I think you can see that it is possible. And those for me are the building blocks that actually say, so if it’s possible to move money relatively easily within East Africa, can we start to add a Democratic Republic of Congo into that mix? Could we add a Zambia, which is contiguous, into that mix? I think practically that’s the way that we see this evolving. We don’t think that there’s going to be a big-bang approach that kind of switches on multi-country currency movements that are frictionless.

And if you think about trade affinity, trade in Africa tends to happen within contiguous countries, within those neighbouring clusters. So theoretically, it sounds okay that you could have convertibility between the naira and the kwacha, but in practice really what’s more important is that between the naira and the cedi. You can be able to facilitate those payments, and that’s one of the things that we are working with Afrixembank with, on the Pan-African Payment and Settlement System (PAPSS) system, for example.

Right, that would be transformational, the PAPSS. Because I mean cedi and naira, people from both countries complain bitterly about how complicated it is to like make payments to families in Ghana, et cetera. It’s very complicated.

I think the good news in my view is that you now have an institution like Afreximbank, which is now really starting to deliver on the promise of why it was created more than 30 years ago, which was really financing exports and imports within and without Africa, and dealing with some of those foundational issues that have remained unresolved for a long time.

So the AfCFTA without an Afreximbank, without a Trade and Development Bank, without players like Cassava Technologies, that then provide the digital infrastructure and the digital services, and the skills – by the way – that are required, then you start to see the needle moving and success come.

So you see yourself really as a critical part of that set of institutions and infrastructure arrangements of the Africa of tomorrow, which trades much more within itself?

We consider ourselves a key part of that story because today we can manage somebody’s digital presence, sited in a network operation centre in Joburg, and we can see that network all the way to Kinshasa, we can see that network all the way to Juba. Which really means that, for example, if you take a banking institution that operates in 11 or 12 countries, it’s now possible for those branch managers – literally for a branch manager in Juba to call her colleague sitting in Lusaka without feeling as if they’re going across countries, and we are the enablers of that story.

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