TechCabal Daily – How the tides have turned

Ghana Chronicles

Welcome to a new week!

Over the weekend, I mostly rested, so I’ll talk about the places I visited on Friday.

On Friday morning I was at Meltwater Entrepreneurial School of Technology (MEST), a Pan-African training program, seed fund and incubator in Accra, Ghana. I listened to a pitch session by six startups and met the MEST team. 

It was good to learn about the work the people at MEST are doing and walk on the famous MEST bridge connecting the two compounds.

Soronko Academy

How do we bridge the gender gap in tech?

According to the United Nations Development programme, studies show that women in the tech industry constitute only 28% of professionals in the sector worldwide, and just 30% in Sub-Saharan Africa.

I was excited to visit Soronko Academy, a non-profit technology and digital skills development center focused on overcoming the gender gap in technology. Fortunately, I visited the academy while a cohort of students were presenting websites they had built with wordpress after just six weeks of training. The sites looked pretty solid!

In the past four years, Regina Honu and her team have done a superb job, equipping young ladies with digital skills and connecting them with job opportunities. 

The inside story of GTBank’s mobile app and USSD transaction failures

Eswatini is back online

Over the past few years, Africa has been plagued by social media and internet shutdowns in the run-up to elections and in response to protests or dissent. 

Eswatini was the most recent to experience this. Two weeks ago, the government shut down the internet as a result of pro-democracy nationwide protests. 

Internet access was however restored on Thursday, July 9.

Backstory: MTN and other network operators in the southern African nation suspended access to social media and online platforms from Tuesday, June 29. This was in line with a directive from the Eswatini Communication Commission as confirmed by South Africa-based MTN Group.

Looking forward: The Internet might be back, but the protests are far from over. Activists are demanding the right to choose the prime minister, as opposed to the king making such appointments. They also want King Mswati III, Africa’s last absolute monarch, to hand over power and install a democratic government in the country.

Read more: MTN says internet access has been restored in Eswatini

China blocks Tencent’s plan to merge top two video game streaming sites

Tencent’s dreams of consolidating its position in the video game stream market space have come to an end. 

Why so?

China’s market regulator said no to Tencent’s plan to merge Huya and DouYu – the top two video game streaming sites, citing antitrust grounds as its reason for not allowing the merger.

Backstory: Tencent first announced plans to merge Huya and DouYu last year in a tie-up designed to streamline its stakes in the firms. Tencent is Huya’s biggest shareholder with 36.9% and also owns over a third of DouYu, with both firms listed in the US, and worth a combined $5.3 billion in market value.

What does Tencent think about this?

The Chinese tech conglomerate has said it will abide by the decision and comply with all regulatory requirements. Case closed.

Zoom out: This is happening amid an ongoing crackdown on Chinese tech companies from the government. Earlier this year, the anti-monopoly regulator fined e-commerce giant Alibaba a record $2.75 billion for engaging in anti-competitive behavior.

Critics have pointed out that Chinese tech companies were encouraged by the government to grow at all costs, but when a few behemoths like Baidu Inc, Alibaba, and Tencent got too big while elbowing out competition and innovation, regulators stepped in. How the tides have turned!

Read more: China blocks Tencent’s $5.3 billion videogames merger

TC Insights: What should africa prioritize

Africa’s digital skeleton is gradually adding flesh to bone. Countries like Rwanda and Ghana are doing more to achieve digital transformation across basic yet tedious processes with the former launching a one-stop platform for accessing public services in 2015 and the latter digitizing national identification. 

But there’s still more to be done to drive development, job creation, and economic growth, and there are different areas that African countries who are trying to achieve these could focus on. 

An expert survey by the OECD in 2020 showed that policymakers and other stakeholders believe that when it comes to creating more jobs, providing digital infrastructure should receive greater priority over digital skills, digital solutions for agriculture and anything else. 

Digital infrastructure is a core need and the foundation for a lot of these other areas to function. However, focusing solely on building infrastructure over other components of digitalization could have more delayed, long-term effects on economic growth compared to others like improving access to finance. 

Take South Africa for instance. 98.5% of businesses are SMEs, and they contribute 39% to the country’s GDP. Yet, South Africa has a $30bn SME financing gap, and analysts predict that about 60% of businesses could shut down due to the spending contractions imposed by the pandemic. 

Unlocking growth in South Africa will clearly require paying more attention to SME financing. A priority area should therefore be to enable easier access to credit since traditional financial institutions are historically averse to financing SMEs. This would then mean driving compliance with the country’s Protection of Personal Information Act which came into effect in 2020, as companies need data to give loans.

In some economies, it is clear what they should focus on. Ethiopia’s economy, for instance, is largely dependent on agriculture (40% of GDP and 75% of the workforce). So perhaps Ethiopia should focus on providing adequate digital solutions for smallholder farmers. 

On the other hand, countries like Sudan or Cameroon with no specific data protection laws in place should consider drafting and implementing legislation for that first, because with further digitalization comes the risk of data leakage.

Every country should recognize where they fall short and first direct their efforts at those areas, instead of applying a one-size-fits-all approach.

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