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Innovation In Africa Is All The Rage For Investors

Despite long-term issues in the region, innovation in Africa is on the rise

4Aug

While the western world and the markets are involved in political uncertainties and turbulence in the global economy, investors are becoming more drawn to emerging markets, with Africa particularly popular. Despite some areas of the continent experiencing long-term problems, business leaders and tech giants came up with solutions which can benefit both sides.

During the annual Nelson Mandela lecture, Bill Gates delivered a speech dedicated to the overall development progress in Africa, stressing that 'African youth are a new breed of innovators who will solve the continent problems, but first the continent has to become a home that will help them thrive.' Considering that there are zones involved in civil conflict, as well as poverty and health care also remaining big issues, building a suitable environment for innovation is not an easy task that requires attention to many aspects.

Youth empowerment organizations RLabs and the Bertha Centre for Social Innovation and Entrepreneurship made a step to making Africa innovation-friendly by launching a free Massive Open Online Course (MOOC). The idea is to encourage people to learn about entrepreneurship and how to use the right sources to develop essential skills. Despite increasing usage of the internet, data costs remain high, particularly in Africa, therefore, the initiative will deliver necessary sources 'offline', ensuring youngsters have equal opportunities to learn as the rest of the world.

It's not only philanthropists and non-governmental organizations who are eager to improve the area. There is a growing tendency in investors pivoting towards emerging markets, especially the fintech industry. Companies now see more ways to deploy financial services and resolve some of the life-quality related issues in Africa. An example is MyBucks, a fintech company that embraces technology whilst providing financial services, particularly to the low and middle-income customer segment, with a predominant focus on Africa. According to the UN's Africa Renewal program, 80% of Africans don't have bank accounts, and yet, they are still able to use financial services through the increasing usage of mobile phones, which makes fintech not only relevant, but essential.

The challenge of deploying financial services to Africa doesn't lie in a lack of infrastructure or technical capabilities, though. It is often hard to reach target audiences, due to them living in rural areas, and it also takes time convincing people that mobile banking can change their quality of life for better. The main advantage of MyBucks over their competitors is that the company uses Artificial Intelligence to support credit technology, easing the work of their FinCloud service that is designed to analyze whether an individual is capable of paying a loan back. The service is of paramount importance for the region, as it can provide additional financial support and educate people about personal budget management.

Chinese tech giants are also interested in providing innovative mobile solutions to the region and recently Huawei and VUT Science and Technology Park agreed to build the Innovation Centre in South Africa. The Vaal University was accredited by Huawei to represent the Huawei Authorised Information and Network Academy program (HAINA), which aims to provide short term ICT related programs to students and a customer base. The idea is to promote ICT, by providing essential training that prepares future or existing entrepreneurs for challenges and opportunities in the industry. The South African centre is one of Huawei's 10 innovation centres worldwide and it's capable of not only benefiting South Africa but also connecting academia globally, with innovations in ICT delivered through effective skill transfer.

Africa is full of opportunities for innovation that are yet to be discovered. An effective business collaboration can significantly improve the region's quality of life and help to resolve long-term issues. There has been noticeable progress already, although we are still far from saying that opportunities exist for everyone equally. However, step by step, and with the help of innovation, Africa can certainly become a better place.

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