Thisnewsletter is a weekly in-depth analysis of tech and innovation in Africa that will serve as a post-pandemic guide. Subscribe hereto get it directly in your inbox every Sunday at 3 pm WAT.
Last week I was away on a much needed break from work, and yes, I am very refreshed. Not as much as I’d like, but I’ll take what I can get. Alexander covered for me on the newsletter with an interesting conversation about Facebook’s foray into Nigeria. Y’all noticed, yes?
Anyway, Alex is one of all the brilliant writers/analysts at TechCabal, and among other things, he currently writes two steady weekly columns; The BackEnd, and FactSheet. They both have tons of useful insights, and you should totally check them out.
Today’s conversation borders around ease of doing business for startups and small businesses. And starts with one funny question:
What are evil forces in the African business context?
Well, a lot, and not so much, but specifically; policies, infrastructure, laws, and other ease of doing business markers. This term was coined by entrepreneur and investor Dr. Ola Brown
in a conversation with TechCabal. These “evil forces” are mostly government makings; negligence or misguided interference. This leads to the next ?????
What is the best way to engage with the government fruitfully?
Catch up on older episodes of The Next Wavenewsletter, subscribe, and let’s try to answer this question with the example of a North African country that we all know by now.
Code and the law April, 2012 – The scene is California, in the courthouse of 67-year-old District Judge William Alsup. Google and Oracle have come before his lordship armed with legal munition, and slugging it out over lines of code, and
In a heavily technical case, Judge Alsup eventually dismissed Oracle’s plea that Google had ripped it off. The good judge navigated the case because he knew more than enough code to get by.
“I couldn’t have told you the first thing about Java before this trial. But, I have done and still do a lot of programming myself in other languages. I have written blocks of code like rangeCheck a hundred times or more. I could do it. You could do it. It is so simple.”
This is a very fascinating narrative, and one of my favourite tech stories of all time. But most importantly, the manner which it blew up with a few contortions over the years points out how out of touch the law literally is with tech and innovations. So out of touch that a coding judge that has done a bit of Java homework becomes a global tech celebrity.
It is very easy to berate African
policymakers, and while not exonerating them on the other hand, technology around the world is evolving faster than laws can keep up with. Regulators are still not sure what to make of Uber and AirBnB, among a host of others. In America and across Europe, when regulators face off with big tech companies in hearings, these things become painfully obvious.
In the homefront
Regardless of how much of a problem this is on a global scale, it is no news that it is greatly amplified in the African context.
The government insists players do not keep them abreast of developments across board, and these tech and innovation communities across Africa swear the government is tone deaf and not interested in making anything of dialogue. And even though this is the current impasse, multiple examples have shown the latter to be true(er).
As no innovation ecosystem can thrive without active positive government participation and involvement, there has to be a way to fix things. Or at least attempt to.
The potter’s wheel
Startup Acts have become popular over the past few years with Tunisia’s leading the way in April 2018. It was a framework for how African governments should interact with and support tech ecosystems. Among other things, some of its more important provisions, according to MENAbytes, are:
“Exemption for startups from corporate taxes for
up to eight years, special custom procedures, exemption from capital gains tax on investments made in startups, up to one year of time off from their current jobs (for both private and public sector employees), and salary for up to three founders during the first year of operations.”
Senegal followed in December 2019, and 10 more African countries are reportedly working to enact theirs.
How has the journey been for Tunisia?
Well, two years after, the startup ecosystem is brimming with positive testimonies, and of course some lessons.
Regardless, it is important to note that a startup act is basically a mold for proper regularisation, and not a panacea for all the startup ails on the continent; it’s just a start.
Tunisia was a good lead, but it cannot be a boilerplate for every African country. For the North African country, it served as an accelerant for a fledgeling tech and startup ecosystem. And some of the Act’s finest points like government-backed funding and salaries for founders may not be feasible for poorer economies, and not be useful for more developed ecosystems.
But for a startup act, the journey is as important as the destination: Tunisia’s two-year period to actually implementing the act is as important as the act itself.
To finally exorcise these evil forces, there has to be a period where African government(s) actually understand the workings of tech and innovation, and create favourable conditions and laws to support them.
FROM THE CABAL
Will GPT-3 take your
job? There has been much ado about Open AI’s powerful language model. And as with every new AI, like clockwork, most of this panic has been around job security.
But seriously, will it really render you obsolete? Short answer? It depends. Long answer? There are more important things to worry about. In this article, Kay Ugwuede contextualises this subject in Africa.
An exclusive West African Disney deal. FilmOne entertainment recently became the exclusive distributors of all Disney movies in Anglophone West Africa, and this makes them the sole supplier to 63 cinema locations and 25,800 seats in the region.
Beyond profit and regional dominance, Alexander Onukwue explains the workings and risks of this deal.
THE CRYSTAL BALL
“Due to the COVID 19 pandemic, a lot of traditional offline options are no longer on the table as a large portion of the recruitment industry has had to quickly embrace technology or lose business. Technology will be crucial for job seekers looking to access training and work opportunities and for employers to fill their vacancies quickly and cost-effectively.
Moving forward, businesses looking to rebound from the pandemic will be focused on building a qualified and productive workforce while being mindful of cost. There will be an increased use of objective data points to assess candidates’ abilities and reduce the occurence of
hiring errors. Such data points are best accessed through skills and personality testing which is affordable and scalable if companies leverage technology.
As the search for improved workplace productivity moves Africa away from non-transparent hiring, to democratic access to talent and opportunity, technology will be crucial in its capacity to match candidates purely based on skills, competencies and fit.“
– Hilda Kragha, CEO, Jobberman. Every week, we will ask our readers, stakeholders, and operators in Africa’s tech ecosystem what they think the new normal will look like, and will share their thoughts here. You can share yours with firstname.lastname@example.org with ‘The Crystal Ball’ in the subject line.
Symbiosis “Everytime we have gotten an investment it was because there was an investor in the room who fully understood our sector and the regulatory framework guiding it,” Tolu Ene (not real name), a health tech entrepreneur said during an interview with
Ene and other entrepreneurs in Nigeria highlighted the opaque policy environment as a major hindrance to funding during interviews with TechCabal about the state of health tech . Investors were being careful to invest in the sector because they couldn’t clearly anticipate what the government would do.
Bad or opaque government policies have consequences for entrepreneurs including tech founders. Not only do innovators and entrepreneurs avoid countries or cities where policies are unfavourable, investors also close their wallets. Entrepreneurship cannot thrive without a healthy relationship with the government and investment. Investors usually go where entrepreneurs thrive and the latter can only thrive where the government lets them.
One good example of entrepreneurs going where the government lets them thrive is Rwanda. In 2015, the government approved the Smart Rwanda 2020 Master Plan with a goal to develop a vibrant technology industry and position itself as a regional hub. Using figures from Partech, about $76 million has been invested in Rwandan startups since the plan was approved.
“I get to live here on an ICT residency, was able to incorporate my company within 24 hours, and had my first office space in a government-sponsored tech
lab,” Barrett Nash, co-founder of ride-hailing startup SafeMotos, explained in an interview highlighting
Rwanda’s commitment to helping technology entrepreneurs thrive. “For me, Rwanda is the test kitchen of Africa; it’s a laboratory-like environment that reduces friction points so that startups can learn faster,” Nash further stated.
With their startup acts, countries such as Tunisia are also gradually becoming startup-friendly going by testimonies by entrepreneurs. But friendly government policies aren’t only great for entrepreneurs, they send a signal to investors that a country is open for business.