In celebration of Africa Day, we highlight the innovative and creative spirit of African entrepreneurs and explore the role of these entrepreneurs in Africa’s economic development.
Africa's Entrepreneurial Spirit: Innovation, Creativity and Resilience
By Margaret Mandeya | Thu May 25 2023
The role of entrepreneurship in Africa’s economic transformation
Africa's private sector is experiencing rapid transformation. Today, innovative entrepreneurs are turning challenges into opportunities and leveraging technology to transform the finance, healthcare, climate, agriculture and transportation industries on the continent. This Africa Day, we're celebrating entrepreneurship by exploring how Renew Capital portfolio companies are innovating across these important sectors.
Innovation in Agriculture
The agricultural economy employs more than 50% of Africa’s labor force and typically accounts for 30–40% of GDP. Technology offers many opportunities to improve Africa’s agricultural sector.
David Lukwago founded Inputi to leverage the power of technology to make it easier for farmers to get access to farming inputs. The venture was born during the height of COVID-19 when the supply chain was severely disrupted due to national lockdowns in Uganda.
“Inputi’s goal is to aggregate demand based on location. We are working to make the pickup of farm inputs as convenient as possible for farmers by delivering inputs to the nearest agro shop,”says Lukwago.
Innovation in Fintech
Many Africans still do not have access to financial services due to low levels of financial literacy and the high cost of transactions. Fintech integrates technology into financial services, enabling faster, more efficient, and cost-effective transactions while enhancing financial literacy. One company that is improving access to financial services is Akellobanker. Akellobanker, founded by Jean Antony Onyait, is a platform that gives Ugandan smallholder farmers and traders access to loans from financial institutions, primarily SACCOS (Savings and Credit Cooperatives) and microfinance institutions.
“Five years ago, financial technology companies came over and showed banks that they could break through to places they weren’t reaching—breaking monopolies and creating healthy competition. This competition goes a long way in reducing prices and making services more affordable for local communities,” says Onyait.
Also in Uganda, Xente is tackling the sphere of digital payments with its neo-bank which allows businesses to make payments using cards, mobile money and domestic and international bank transfers, as well as to pay bills and send airtime and data. Only 5%–7% of all payment transactions in Africa were made via electronic or digital channels in 2022 (Mckinsey). The platform also allows businesses to manage their petty cash expenses to ease the complexity of accounting and finance.
Innovation in Transportation
According to the OECD, Africa has the fastest urban growth rate in the world and by 2050, Africa's cities will be home to an additional 950 million people. This has highlighted a growing need for more efficient and cleaner transport systems.
A major challenge with Africa’s transportation sector includes high reliance on informal transport. In major cities in Africa, informal transport accounts for 95% of all public transport trips and most of the time, this form of transportation is inefficient and commuters are often forced to wait in long queues. Ugandan company Easy Matatu is helping to solve this challenge with an app that connects commuters to book and pay for a seat in advance, reducing wait time and minimizing delays.
“Our mission is to fix public transport in Africa’s cities using technology. This looks different in different African cities,” says Easy Matatu founder Carl Lema Andrew.
BuuPass, a Kenyan company, founded by Wyclife Omondi of Kenya and Sonia Kabra of India, is also helping to streamline ticketing processes in East Africa. BuuPass enables bus operators to set up their routes, booking stations and real-time ticket booking, as well as access daily reports on their business transactions online.
“Many of these (transport) companies were still using pen and paper for their ticketing processes and they lacked a centralized data source to inform their business decisions. To address this gap, we developed a bus management system that allows our clients to digitize their processes,” says BuuPass co-founder Kabra.
At Renew Capital, we believe that Africa can harness its entrepreneurial spirit to unlock its full economic potential, drive inclusive growth and shape a prosperous future for the continent.
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