With over two bil­lion more peo­ple in cities by 2050, are smart­phones the fu­ture of African ur­ban plan­ning?

The East African - - BUSI­NESS -

Op­ti­mal de­ci­sions and be­hav­iours can be at­tained in city en­vi­ron­ments through the use of in­for­ma­tion and com­mu­ni­ca­tion tech­nolo­gies.”

Hu­man­ity faces the mam­moth task of adding over two bil­lion peo­ple to the ur­ban pop­u­la­tion be­fore 2050, the equiv­a­lent of cre­at­ing a city the size of London ev­ery month for the next two decades. The im­pacts of this growth have been com­pared to the In­dus­trial Rev­o­lu­tion, and Africa will con­front these chal­lenges more so than any other re­gion.

For African cities and towns to­day, this rep­re­sents an op­por­tu­nity to cap­ture the his­tor­i­cal wealth pre­mium as­so­ci­ated with ur­ban­i­sa­tion, or suf­fer the con­se­quences of ur­ban­i­sa­tion with­out growth.

Against the back­drop of what many call the Fourth In­dus­trial Rev­o­lu­tion, fur­ther catal­ysed by the dis­rup­tion brought in by the con­ver­gence of dig­i­tal tech­nolo­gies, what clues do ur­ban­i­sa­tion trends in mo­bile money hotspots pro­vide for suc­cess­ful growth strate­gies, fi­nan­cial in­clu­sion im­per­a­tives, and the dig­i­tal, fi­nance and com­merce (DFC) ecosys­tem?

Africa is not a city

The UN es­ti­mates that around half of sub-sa­ha­ran Africa is ur­ban now, pro­jected to reach 75 per cent by 2050. Go­ing deeper into these broad fig­ures gives a bet­ter sense of the last-mile chal­lenge of cus­tomer ac­qui­si­tion at scale: As much as half of non-ur­ban Africans live be­tween one and six hours from the near­est city of more than 50,000 in­hab­i­tants, while nearly one in five live six hours or more away.

In­deed, de­spite the at­ten­tion gar­nered by Africa’s best-known ur­ban ag­glom­er­a­tions like La­gos, Kinshasa or Jo­han­nes­burg as the dar­lings of African ur­ban­i­sa­tion, the majority of new ur­ban­ites (of which there will be an ad­di­tional 187 mil­lion by 2050) will be found in cities of less than one mil­lion.

Or­gan­i­sa­tions aim­ing to cap­ture sig­nif­i­cant mar­ket share or make a sig­nif­i­cant dent in the fi­nan­cial in­clu­sion chal­lenge should brush up on their ge­og­ra­phy, be­cause it is sec­ondary cities many have never heard of, like Zin­der in Niger, that may wind up be­ing the real lo­cus of change and op­por­tu­nity.

High fer­til­ity rates play a sig­nif­i­cant role in the un­par­al­leled rates of ur­ban­i­sa­tion ob­served in Africa, but they are not the only rea­son. Cli­mate change, though hard to pre­dict at a lo­cal level, will speed up ur­ban­i­sa­tion where it man­i­fests as re­duced mois­ture, as it will par­tic­u­larly across the Sa­he­lien cities of West Africa and cer­tain South­ern cor­ri­dors.

This sub-sa­ha­ran ex­pe­ri­ence will clearly be felt be­yond its bor­ders — al­ready, the is­sue of il­le­gal im­mi­gra­tion to Europe is clearly on the minds of the French, Bri­tish and Ger­man lead­ers who have vis­ited the con­ti­nent re­cently. As African ur­ban­i­sa­tion also means the ad­di­tion of Africans to global (par­tic­u­larly Euro­pean) cities, per­haps we should view the fu­ture of the African re­mit­tance mar­ket through the lens of African cities’ cli­mate re­silience, as those with the largest di­as­pora are also the largest re­cip­i­ents of money sent home.

Ur­ban­i­sa­tion = Mo­bil­ity op­por­tu­ni­ties

Though gov­ern­ment has an enor­mous re­spon­si­bil­ity in nur­tur­ing cities into live­able and pro­duc­tive spa­ces, the ur­gency of the de­mand for so­lu­tions to to­day’s prob­lems has mar­shalled the pri­vate sec­tor to re­spond.

Uber, for ex­am­ple, op­er­ates in more than 15 ma­jor African cities, pro­vid­ing in­come to over 60,000 driv­ers and in­creas­ingly com­pet­ing with lo­cal fac­sim­i­les like Lit­tle Cab in Kenya or Africa Ride in South Africa — both of which dif­fer­en­ti­ate them­selves by ac­cept­ing pay­ment through lo­cal mo­bile wal­lets.

Other star­tups aim­ing to of­fer so­lu­tions to the chal­lenge of over­crowded cities in­clude Twiga in Kenya, rais­ing $10.3 mil­lion last year for their B2B and B2C foodto-doorstep de­liv­ery ser­vice, and MAX, a Nige­rian mo­tor­cy­cle ser­vice ded­i­cated to beat­ing La­gos’s no­to­ri­ous con­ges­tion. At the heart of these busi­ness mod­els, un­sur­pris­ingly, lies the ubiq­ui­tous mo­bile de­vice, along with the in­no­va­tions in geospa­tial, lo­ca­tion and map­ping services of­fered by smart­phones.

Smarter phones, smarter cities?

If smart­phones of­fer prac­ti­cal so­lu­tions, smart cities of­fer a vi­sion. Though def­i­ni­tions vary, the “smart city” con­cept is un­der­pinned by the no­tion that op­ti­mal de­ci­sions and be­hav­iours can be at­tained in city en­vi­ron­ments through the use of in­for­ma­tion and com­mu­ni­ca­tion tech­nolo­gies.

Mckin­sey de­scribes the tech­no­log­i­cal base re­quired for build­ing smart city ap­pli­ca­tions in three parts: First, a sen­sor layer, col­lect­ing data through sen­sors like smart and dumb phones, air and wa­ter qual­ity sen­sors, sur­veil­lance cam­eras, and waste re­cep­ta­cle sen­sors; sec­ond, a ro­bust com­mu­ni­ca­tions layer, re­lay­ing gath­ered in­for­ma­tion through broad­band, mo­bile net­works, and even Wifi. Third, open data por­tals to foster in­no­va­tion and adop­tion.

The no­tion that a smart city may be bet­ter able to cope with fast ris­ing pop­u­la­tions is un­likely to ma­te­ri­alise with­out plan­ning tools that rep­re­sent a step change up from the sta­tus quo. In­deed, even pop­u­la­tion cen­sus data, typ­i­cally a la­bo­ri­ous World Bank-funded ex­er­cise, gets com­pleted once ev­ery five years — too long to pro­vide ac­tion­able in­sight into some of the fastest-evolv­ing real es­tate in the world. Mckin­sey notes that in Latin Amer­ica, India and Africa, in par­tic­u­lar, in­stalling the sen­sor layer is both the most crit­i­cal and the most cap­i­tal-in­ten­sive first step to­wards reap­ing the ben­e­fits of smart ur­ban­i­sa­tion.

Given the un­will­ing­ness of telecoms firms to re­lease the pre­cious data they con­trol through call records, en­ter­pris­ing cities should seek big data col­lec­tion and man­age­ment so­lu­tions that ad­dress key is­sues like mo­bil­ity, se­cu­rity, util­ity ser­vice pro­vi­sion, health­care and hous­ing. For­tu­nately, an in­creas­ing ar­ray of tools are be­ing de­vel­oped that can lower the cap­i­tal costs of this sen­sor layer, for ex­am­ple us­ing crowd-sourced data or re­mote sens­ing from satel­lites and drones.

Wait­ing for Wakanda

Mo­bile money op­er­a­tors are well po­si­tioned to play a key role at the in­ter­sec­tion across these sec­tors. They also man­age one of the deep­est net­works of dig­i­tally fluent mer­chants in the thou­sands of set­tle­ments, mar­ket towns and sec­ondary cities where high birth rates and ru­ral mi­gra­tion are ac­tively swelling to­mor­row’s mar­kets. Col­lect­ing and pub­li­cally shar­ing city data could help mo­bile money op­er­a­tors bet­ter an­tic­i­pate the chal­lenges of ur­ban­i­sa­tion.

Ur­ban­i­sa­tion in Africa, per­haps more than in any other ge­ogra­phies, will bring the con­tra­dic­tions of mod­ern cities — like mal­nu­tri­tion and obe­sity — side by side. To cap­ture the ben­e­fits of an ur­ban pre­mium, as well as play a unique role in shap­ing new com­mu­ni­ties, DFC ac­tors need to go to where the peo­ple are — and em­power them with the tools to shape the new world.

Pic­ture: Sala­ton Njau

The UN es­ti­mates that around half of sub-sa­ha­ran Africa is cur­rently ur­ban.

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