Silicon Savannah: The New Frontier For Mobile Apps Is In Africa

   on September 27 2012 6:23 AM
Safaricom
A Safaricom sales representative arranges solar-charged mobile phone handsets for display at a retail center in Kenya's capital, Nairobi, Sept. 22, 2009. Reuters/Thomas Mukoya

Everybody knows what, and where, Silicon Valley is. Not many, though, will know that 10,000 miles from California, in the high plains of East Africa, there is a smaller but thriving community of computer geeks and app developers inspired by their American namesake. It’s Kenya’s Silicon Savannah, and it’s another indication that the mobile technology revolution that has swept the developed world is helping change societies in Africa too. 

One example of what Silicon Savannah does, and how it has changed Kenya, is M-Farm, a mobile app that gives farmers access to world agricultural prices via text messages -- something that Kenyan farmers would never have been able to know easily before and that helps them succeed by letting them adjust to market conditions. Or NikoHapa, a loyalty app allowing customers to check in with a text message when they visit restaurants, gyms or salons around Kenya’s capital, Nairobi, building up points to earn freebies. Other apps are driving expansion beyond Kenya, such as Cheki, a car sales app available in several other countries in the region and about to expand into Nigeria, Africa's most populous country. 

Kenya’s growing reputation for mobile technology is a product of the country’s own high mobile usage: It has an estimated 26 million mobile subscribers, or 67 percent of the population. Most handsets are still basic, and few have Internet access, but producing useful, money-saving or entertaining content for Kenyan subscribers has nurtured a pool of skilled programmers and innovative start-ups, helping to create a technology boom in Kenya.

With a gross domestic product per capita of just above $1,700, No. 145 in the world, according to the International Monetary Fund, Kenya is still very much a developing country, and many people do not have bank accounts to pay for services. That has led to a breakthrough Kenyan development: M-pesa, a money transfer service introduced by telecom company Safaricom (Nairobi SE: SAFCOM) that allows people without bank accounts to transfer funds via text message. Now it has 15 million users, has expanded into Tanzania and South Africa and has generated a wave of new applications like Pesapal, which enables people to buy and sell on the Internet using M-pesa or credit cards, and Kopo Kopo, which lets small businesses accept and track purchases by mobile money.

The number of apps available has also grown, as some have begun to make money. Hundreds of individual developers sell their apps in online stores like Nokia’s specialist Ovi outlet; like in the rest of the world, all a developer needs is a computer and an idea that they publish for free. Developers of free apps are also building revenue streams. Kopo Kopo charges after a certain amount of transactions; Nikohapa asks businesses to subscribe to its loyalty scheme, giving it a revenue stream. 

“New apps are also emerging with the potential to carry ads,” said Isis Nyong’o, who left a top job at Google Africa last year to lead mobile advertising group InMobi’s African operations from Nairobi. Many apps help businesses grow, helping the economy -- and not just in Kenya, explained Mark Kaigwa, a Nairobi-based consultant. Car sales app Cheki and Uganda’s Meka, the country’s first retail price comparison app, are cases in point. “A successful app will drive traffic and business to the website and allow that business to collect valuable data,” he said. 

Another popular Ugandan app is Mafuta Go, created by a group of students, which shows consumers where to find the cheapest gasoline. In Nigeria, Pagatech aims to do what M-Pesa has done in East Africa. Its application Paga lets people pay bills and send money with their mobile phone and will roll out mobile insurance and savings products next. Also in Nigeria, multinational giant Samsung is working with Co-Creation Hub to provide expertise and resources to local mobile apps developers, helping them monetize their creations. 

Some of Africa’s apps are taking off further afield. NikoHapa is exploring a launch in the Ivory Coast and Ghana. M-pesa has spread to Afghanistan, where local police are paid via the mobile app, cutting out corruption. Ushahidi is another mobile application spun out of Nairobi that has gone global. It allows users to crowdsource crisis information via mobile and was used in Haiti and Chile after earthquakes.

While most African mobile apps are aimed squarely at the local market, solving everyday African problems, these international successes prove that they can drive exports. The figures prove that technology is a growth sector: According to the government, Kenya’s exports of technology-related services grew to $360 million in 2010 compared to $16 million in 2002. In absolute terms, those may not be staggering numbers, but compared to the size of the economy -- Kenya's GDP was $35 billion dollars in 2011, according to IMF figures -- they are significant. 

And that means the next app you download on your iPhone, Android or PC may just be from an unlikely place: Africa's Silicon Savannah.

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