Stanford Africa Business Forum Themed: African Innovation Shaping The Global Future On 16/04/2022

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INNOVATIVE USE OF TECHNOLOGY HELPING TO SOLVE CHALLENGES IN AFRICA, SAYS OSINBAJO

*VP adds: Continent must sustain momentum to realise potentials, play critical role in global future

“The evidence all around us is that in the process of addressing its challenges, Africa is using the opportunities of the digital era quite innovatively.

“It is imperative that we keep the momentum going so that the continent thrives, backstops innovation, creates wealth and contributes to overall global development,” according to Vice President Yemi Osinbajo, SAN.

Prof. Osinbajo stated this in his remarks delivered virtually on Saturday at the Stanford Africa Business Forum themed “African Innovation Shaping the Global Future”, and hosted by the Stanford Business School.

Below are the Vice President’s full remarks:

VIRTUAL KEYNOTE ADDRESS BY HIS EXCELLENCY PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AT THE STANFORD AFRICA BUSINESS FORUM THEMED: AFRICAN INNOVATION SHAPING THE GLOBAL FUTURE ON THE 16TH OF APRIL 2022

PROTOCOLS

Prof Jonathan Levin, thank you for inviting me to speak. I would have loved to be there personally, but my schedule has made that impossible, so I’m glad you’re able to accommodate my contributions in this way. Thank God for technology.

Our theme – African Innovation Shaping the Global Future – is counterintuitive yet very perceptive.

Why would Africa play a pivotal role in the global future? After all, Africa is home to most of the least developed countries in the world and many African countries are at the bottom of the rung of human development indicators. It is certainly not a global leader in research and development. In terms of digital technology Africa seems to have a high mountain to climb as its internet penetration is at 39.3% compared to the world average of 58.8%.

But I would say that it is precisely because of its developmental limitations, its distance from the frontier of economic development, that Africa needs to innovate and in so doing, will catch up or indeed set the pace for the rest of the world. First of all, digitalisation offers opportunities for innovation that are not so readily available with other forms of technology and will enable African countries to leapfrog while at the same time contributing to the global future.

It is now well acknowledged that the tech sector in Africa holds a lot of promise. There are said to be almost 700 innovation hubs on the continent and venture capital funding continues to expand at a rapid pace.

This last frontier continent offers opportunities for using innovation to solve the huge deficits in financial inclusion, human capital development, access to electricity, clean energy, access to credit, and payments processing.

Take for instance the story of mobile telephony in Nigeria which has created the basis for the widespread use of digital technologies is an important one. From barely 300,000 telephone connections at the turn of the Millennium, we now have up to 188 million active mobile lines in the country.

The use of mobile telephones in Nigeria has completely redrawn the economic landscape of the country.

In addition to making it easier to communicate, smart devices are now the major way of making payments, booking air tickets, ride-hailing, accessing streaming services and listening to music.

The revolution spawned by mobile telephones would have been difficult to imagine if it had not already happened. So, a good example is financial inclusion. Using technology, notably by taking point of sale (POS) services to the informal sector, Nigerian FinTechs have helped to overcome the challenges of limited access to banking services and by so doing, ramped up financial inclusion in the country.

They have begun to spread into the rest of the continent and in many ways, have become global leaders. So, it’s no surprise that companies like Flutterwave, Paystack, Andela and Opay have achieved valuations of over US$1 billion.

How about mass education? It is evident that in order to bridge the digital skills divide and enable African children to cope with a rapidly changing world, education, relevant useful education is key. Yet, given the fact of its rapidly growing population and the relative lack of resources, it is clear that Africa cannot keep up with the ‘bricks and mortar approach’ of educating its young. So, innovation is the only way to avoid this dilemma and we must explore the opportunities to educate a large number of young people.

There is already significant activity in the EdTEch space. Today, there are close to three hundred EdTech startups in Africa and many of them are doing good work in mass education and STEM education.

The increasing economic viability of advanced robotics, artificial intelligence, 3-D printing, the Internet of Things, cloud computing, big data analytics, and blockchain technologies requires that young Africans acquire a new set of skills.

The skills that will be required range from basic digital literacy to knowledge of software and hardware engineering required to build and maintain ICT equipment and systems upon which comes the top layer of the ability to use digital tools innovatively.

Africa must promote talent and the acquisition of relevant skills for its citizens, especially the youth in the next few years. We already have companies like Andela focused on providing top class software engineering talent in Africa, while Paystack has teamed up with Lambda to provide world-class full-stack developer education for free.

Productivity remains a problem for Africa. Its agricultural production is well below its potential despite having 25% of the world’s arable land of which 50% is uncultivated. If care is not taken, the continent will continue to have an unsustainable dependence on food aid and increasing food insecurity.

Again, it is clear that it is innovation that must come to the rescue. And there are many takers, filling the gaps in many parts of the agricultural value chain. There is a start-up called Kubeko from Côte d’Ivoire in West Africa, which produces low-cost equipment that is able to process biowaste into organic fertiliser. At a time when global oil and gas prices are at record highs, this sort of innovation will help to reduce the cost of producing food while reducing post-harvest losses.

There are also quite a few fast-growing technology-driven agricultural companies. Thrive Agric for example, which recently secured $56.4 million in debt funding from commercial banks and institutional investors, links African farmers to capital, data-driven best practices, and local and global markets for their commodities.

Access to credit especially for small farmers and informal traders had remained a major challenge but also an important opportunity for innovation. In 2016, in order to facilitate a major government-driven microcredit scheme for 10miilion informal traders, the largest of its kind in Africa, the Nigerian Bank of industry commissioned a digital platform for the purpose. It proved to be tremendously successful and has now led to the commissioning of its Growth Platform, which engages 22,000 agents, living across Nigeria. Each agent is equipped with the platform’s proprietary mobile technologies, they receive mandates to capture and digitize businesses eligible for its growing suite of microcredit programmes.

In some cases, these agents (or “human banks” as they are sometimes called) open the first-ever bank account or mobile wallet used by the micro-enterprises. Every detail of each business is trackable centrally at the Bank of Industry, down to biodata, geolocation, images and facial IDs of every micro, small and medium entrepreneur where applicable.

Climate change is yet another issue and continues to pose serious risks for Africa and could hamper Africa’s post-COVID recovery and cause 86 million Africans to migrate within their own countries by 2050. The current solutions to tackling climate change also pose a dilemma for Africa in the sense that they take no account of the continent’s energy poverty. It is estimated for instance that only 40% of Africans have access to electricity.

Africa must find a pathway to improving energy access which is so vital for economic development while making its own contribution to tackling climate change.

This is why start-ups like Reeddi in Nigeria, which produces and rents out solar-powered batteries, hold out great promise to increasing access to electricity while helping to save costs. It is estimated that small businesses in Nigeria spend up to 40% of their daily expenses on electricity, an amount which the use of Reeddi reduces to 10%.

In a similar vein, Africa’s creative sector is doing quite well and building new talent across the sector and also leveraging new technologies such as (NFTs). There is also the use of virtual reality to bring Africa to the world by showcasing our arts, museums and culture.

Given the need to lend further impetus to digital technology in order to innovate for the future, we are establishing here in Nigeria the Investment in Digital and Creative Enterprises Programme (i-DICE) Programme. iDICE is supported by the African Development Bank, Islamic Development Bank and the French Development Agency and it will raise about $600million to support four key pillars of the technology and creativity ecosystem. They are finance and investment, catalytic infrastructure, skills, and policy development.

There is of course some concern that the increasing use of digital technologies could lead to a loss of jobs as industrial robots and automatic teller machines replace people.

This is an important consideration because beyond the problems with alienated youth, jobs matter because the consumption from workers’ incomes contributes to economic growth. However, job losses need not accompany increasing digitalisation as numerous jobs and opportunities abound in the digital space.

The key thing is to provide our youth with the skills and knowledge to participate and benefit from the digital economy.

In conclusion, I think the evidence all around us is that in the process of addressing its challenges, Africa is using the opportunities of the digital era quite innovatively. It is imperative that we keep the momentum going so that the continent thrives, backstops innovation, creates wealth and contributes to overall global development.

I think there is no question at all that with the right spirit of hard work and problem solving that we see all over the continent, the green shoots of technological innovation will transform the continent and impact positively on the rest of the world.

Thank you very much for listening.