On 30 March 2017, President Jacob Zuma decided to purge his cabinet of 9 Ministers and 6 Deputy Ministers in an unprecedented show of disdain and disregard for the economy and the well-being of the country. ENOUGH IS ENOUGH!
Late in 2016 Senegal’s Banque Regionale De Marches announced the launch of the eCFA Franc; a cryptocurrency for the countries of the West African Monetary Union – Senegal, Cote d’Ivoire, Benin, Burkina Faso, Mali, Niger, Togo and Guinea-Bissau. This and similar innovations mark the coming of age of a new generation of applications – an Internet of Intelligent Things – that could provide a new infrastructure for economic development across Africa.
The Internet of Things is a network of physical devices, vehicles, buildings and other items. They are equipped with electronics, software, sensors and network connectivity so they can collect and exchange data. There’s wide enthusiasm about spectacular innovations such as Intelligent refrigeratorsand driverless cars. But a quieter revolution is underway in everyday systems and facilities, such as financial services.
There are particular possibilities here for Africa. The potential for the continent’s economic growth is well established. There’s also an abundance of opportunity for digital innovation. This was clear from a recent continent wide entrepreneurship competition organised by the University of Cape Town’s Graduate School of Business.
More broadly, the new Internet of Things has the potential to compensate for Africa’s legacies of underdevelopment. The key here is the development of the blockchain from a fringe concept into a mainstream digital innovation.
The blockchain, mostly known as the technology that underpins digital currency Bitcoin, is an almost incorruptible digital ledger of transactions, agreements and contracts that is distributed across thousands of computers, worldwide.
It has the potential to be both foundation and springboard for a new developmental infrastructure.
New blockchain platforms such as Ethereum are supporting the development of distributed applications. These “DApps” can provide accessible ways to use the blockchain. They act like “autonomous agents” – little brains that receive and process information, make decisions and take actions. These new capabilities will have widespread implications when linked to cryptocurrencies through “smart contacts” that are also securely recorded in the blockchain.
DApps provide a practical and affordable means of making Things intelligent and able to interact directly with other Things. They can be programmed to take data-informed actions without human intervention.
These innovations will have particular benefits across Africa. Economic growth is underpinned and enabled by appropriate financial services. Early internet-based innovations such as Kenya’s M-PESA have clearly demonstrated the appetite for accessible, Internet-financial services. But many small and medium businesses are still restricted. Their owners usually can’t access standard loan financing. Banks will not extend credit facilities without traditional title deeds to land and buildings, or a conventional payslip.
Don and Alex Tapscott have shown in their recent book that the new blockchain can be “the ledger of everything”. A house can become an intelligent entity registered on a secure, distributed database once it’s tagged with a geospatial reference and sensors that monitor its continuing existence.
The owner of the asset can, through an Ethereum-based smart contract, secure a loan to expand a start-up enterprise. Intermediary arrangements become unnecessary. Economist Hernando de Soto has suggested this could create “a revolution in property rights”.
Property and financing aren’t the only areas where the new Internet of Intelligent Things has the potential to compensate for Africa’s legacies of underdevelopment.
Economic growth also depends on affordable and reliable services like water and energy. Water is an increasingly scarce resource in many parts of Africa. This is particularly true in cities. Rapid population increases are making old precepts of urban planning redundant.
Technology can help. Autonomous agents positioned across all aspects of water reticulation systems can monitor supplies of potable, storm and waste water. These “little brains” can take appropriate actions to detect and report damage and leakage and close off supply lines. Smart devices can also monitor water quality to detect health hazards. They can regulate and charge for water consumption.
Similarly, for the supply of energy, smart devices are already being deployed across conventional and ageing power grids in other parts of the world. In Australia, for instance, intelligent monitors detect when an individual pole is in trouble. They then report the fault and call out a repair crew. They can also communicate with other poles to redirect the supply and preserve the grid’s integrity.
In parallel with conventional supply systems, new digital technologies can enable full integration with renewable sources of energy and the intelligent management of supply at the household level. The new blockchain is designed for secure peer-to-peer transactions combined with incorruptible contracts between multiple parties. Individual households can manage their own supply and demand to incorporate self-generated energy. A house equipped with a simple windmill and a roof made up of photovoltaic tiles could sell surplus power to a neighbour in need. They could also buy from another house to meet a shortfall.
Such microgrids are already in development. The combination of ubiquitous and affordable bandwidth and low cost autonomous agents could bring affordable energy to communities that have never enjoyed reliable electricity supply.
A new infrastructure built up in this way could be a springboard for economic development – from small enterprises that would have the resources to take innovations to scale, to significant household efficiencies and increases in consumer purchasing power. As has been the pattern with previous digital technologies, costs of production will fall dramatically as the global market for intelligent things explodes. That which seems extraordinary today will be everyday tomorrow.
So what’s standing in the way?
It’s not the technology that’s holding Africa back from embracing the Internet of Things. Rather, it’s the established interests in play. These include state enterprises and near-monopolies that are heavily invested in conventional systems, local patronage networks and conventional banks, and the failure of political vision.
What’s needed is effective public policy and business to ensure that the potential of this next wave of digital innovation is realised. Government and civil society innovators need to be directing much of their attention here.
This is why the West African Monetary Union’s cryptocurrency initiative is encouraging. It’s a step towards the future that Don and Alex Tapscott envision; a move towards an Internet that’s driven by the falling costs of bargaining, policing, and enforcing social and commercial agreements.
In this new space integrity, security, collaboration, the privacy of all transactions will be the name of the game. So too will the creation and distribution of value. And that’s great news for Africa.
There’s nothing radical about trying to fix what doesn’t work by making it work better, which is why the economic transformation discussion document released by South Africa’s governing party, the African National Congress (ANC), is not really radical.
The document is also unlikely to renew the economy, ensure that more people are included and create conditions for sustained growth.
It was released recently as part of the ANC’s preparation for its conference at the end of this year. They’re always preceded by a mid-year policy conference, which is meant to agree on resolutions to be put to the conference.
It’s ANC practice to release policy discussion documents in preparation for these meetings – hence the economic document. The party’s leaders point out that it doesn’t express ANC policy since delegates at the conferences could reject it. But it does give an important sense of the thinking of the party’s economic policy strategists.
In keeping with the current ANC rhetoric, the document stresses the need for “radical economic transformation”. It says proposals for change should be judged by whether they radically and systematically improve the lives of those who are excluded and marginalised.
The document is filled with good intentions and worthy ideas. But it fails the test.
The problem is that it ignores calls to seize land or rein in ‘white monopoly capital’ - the themes of today’s “radical” rhetoric. These demands are either ploys by patronage politician’s eager to get hold of resources or slogans pretending to be concrete recipes for change. It’s not radical, nor will it achieve its stated aim, because it doesn’t suggest ways of moving the economy from its current pattern which has produced low growth and continues to exclude millions.
Like both sides in the economic debate, it doesn’t seek a new path which will include millions more. Instead, it keeps alive the forlorn hope that the excluded can be absorbed into an economy built to exclude them.
Perhaps the clearest sign of this is the discussion on employment. The document endorses the National Development Plan’s target of shrinking formal unemployment to 6% by 2030. It says this will be achieved by lowering costs, increasing investment and improving energy generation, transport and water supply.
All would no doubt be widely welcomed. But all assume that the current system can be made to work better and so there’s no need to change it.
The specific remedies which the document proposes lack the required innovation too. These include minerals beneficiation, incentives for manufacturing, reducing red tape, more training, more emphasis on research and development. They all assume that the economy needs tweaking, not changing.
Even where it proposes measures which seem more radical – “set asides” for black businesses or speeding up land reform within the confines of the constitution – the document doesn’t challenge the current framework.
And so, despite some rhetoric to the contrary, it doesn’t get to grips with the core reality that the formal economy is still an insider club which excludes millions. It’s dominated by too few players engaged in too many cosy networks, many racial patterns persist and potential in the townships and shack settlements is squandered. A core reason is that both the old economic elite and the new political leadership assume that the economy will reach its potential when everyone has what whites had in the 1960s – full employment and a stake in the formal economy.
This ignores two realities. First, the apartheid economy worked for the minority because it excluded most people; it can’t be extended to everyone. A real break with the past would mean negotiating changes which would bring in many new players and dropping the prejudice that wealth can be created only by formal businesses protected by a host of rules. This means accepting that people who make a living outside the formal economy are a potential solution, not a problem, if they receive more support.
Second, the days in which manufacturing and mining could create millions of jobs are gone: the formal jobs the document wants to create are disappearing across the globe. The question is not how to get them back but how to ensure that everyone can make a living without them.
A sign that the document ignores inclusion is that it has nothing to say about township business besides a throw-away line about reducing costs. So a key question – how to link people in townships and shack settlements into the formal economy – is ducked. This despite the fact that it offers a far more credible way out of poverty than reviving jobs which are gone.
Nor is there anything about how to revive mining areas hit by the loss of jobs which will never come back. Or on how to stimulate economic activity for people who 20 years ago would have worked in factory jobs which have gone forever. And so there’s nothing on ensuring that formal business and government strengthen economic activity on the ground rather than snuffing it out.
There isn’t much on the education and training needed to help people adjust to new realities. Or programmes to boost grassroots livelihoods – such as grants and local infrastructure.
Only two proposals address these issues: the document calls for more effective rules to boost competition, and for changes to the settlement patterns in cities, which relegate the poor to the fringes where they are shut out of the mainstream economy.
But neither proposal is fleshed out. It’s therefore fair to question how much of a priority they really are.
The ANC discussion document on economic transformation isn’t radical enough not because it refuses to substitute slogans for thinking. Rather because it doesn’t break with an economic debate which – on the left, right and centre – is about how to keep current patterns alive, not how to change them.
The marketing and advertising industries are transforming. So why are so many black professionals disgruntled with the rate of progress? And is the quality of most of the work specifically directed at a black audiences still sub-par? We emailed a panel of key industry executives for their take. Next up is Ahmed Tilly of FCB Africa.
I think we're not giving enough credit to Helen Zille for her frequent social media indiscretions. From calling poor Black South Africans who moved from the Eastern Cape to the Western Cape, “refugees”, she set off a robust debate which perhaps helped to educate people about why calling somebody a “refugee” in their own country is offensive. Her latest gaffe, in which she sought to posit colonialism as a benign, largely beneficial experience for Africa has also resulted in torrid discussions across the blogosphere and social media...which is really, a very good thing.
As a white South African, I am a descendent and benefactor of the Europeans who colonised Africa, and I can emphatically say NO! Colonisation was the worst thing to ever happen to the people, cultures, societies, land and economy of Africa...and here's why.
To begin with, I’d like to talk about a commonly peddled myth - that being the one relating to the primitive and savage Africa that the colonising Europeans “discovered”, civilised and then developed. Of course, much of this commonly accepted history has been written by those same colonialists, but the truth is that large portions of Africa were not that far behind Europe at the time that Europeans began arriving.
The financial sector is one of the most important components of South Africa’s economy, and one which should be transformed to facilitate meaningful economic participation by the majority of the people.
I am bored by how many people have come out showing outrage for the ANC's vote with the DA against amending Section 25 of the Constitution so as to allow for expropriation of land without compensation.
I can't count the number of white friends I've lost and alienated as a result of me posting content about social injustice; the need for economic transformation; the legacy of white privilege and black pain; and the need for us to address the gaping flaws in our society rather than gloss over them as if they're self-repairing. So imagine my joy when I stumbled across this cartoon, by a New Zealand cartoonist, which explains economic inequality in a way even a primary school kid could understand.
The new B-BBEE ICT sector codes, effective from November 2016, are having an impact as major IT and telecommunications companies respond to the business imperative to meet the new targets.
In response to a debate on the State of the Nation Address (SONA) he delivered in Parliament last week, Zuma said the political freedom gained in 1994 must be accompanied by economic freedom for the black majority in this country, and the Africans in particular.