CAPE TOWN // Online connectivity is growing across Africa, and big tech companies such as Google and Facebook are taking notice, moving in to fill a gap left by under-investment in telecoms industry infrastructure by established players.
More than a billion souls inhabit the continent, a lot of potential eyeballs for advertisers. A growing middle class combined with expanding internet activity is bringing people to social networks. Facebook has grown its African users by more than 40 per cent to 170 million in just two years.
“Since we first established a direct presence in sub-Saharan Africa in 2015, Facebook has grown from strength to strength,” says Nunu Ntshingila, the regional director for Africa at Facebook in Johannesburg. So fast has the expansion been that the social media behemoth had to move into larger offices in April this year.
Facebook has no intention of slowing down. However, in order to grow users it, like other digital media platforms, must overcome a fundamental shortage of infrastructure. In most cities internet access is fairly easy to come by. This is where most of the digital migration has happened, yet a huge untapped market lies further beyond, in smaller towns and rural areas.
Facebook’s co-founder and chairman, Mark Zuckerberg, has said internet access is a basic human right and Facebook’s Free Basics initiative allows mobile users to access the social network without cost, which is now available in more than 20 countries south of the Sahara.
Free Basics was not without controversy. It provides a platform with a limited set of websites, so not the full internet experience. In theory, a throttled service could be used to influence political discussion, among other things. It could become, as a Foreign Policy magazine writer called it recently, “a dictators’ dream”.
“I worry that providing limited access could have unintended effects on those who are introduced to the “internet” for the first time,” says Gbenga Sesan, the executive director of Paradigm Initiative Nigeria, an IT-focused nonprofit.
“Also, from my work with underserved youth over the past few years, we’ve seen that the poor can pay for what they need based on priorities, as we saw with mobile phones and top-up cards required to make calls.”
Facebook appears to have arrived at this conclusion too, and has begun providing another service – Wi-Fi hotspots where users can pay for the full internet experience, a Facebook spokesman says. “With the purchase of Wi-Fi data packs, customers can access the internet, based on the package they select, by the day, week or month. There are options for people who use a little bit of data, or a lot of it.”
These hotspots have begun rolling out in Kenya and Nigeria in partnership with the country’s mobile operators, including the UAE’s Etisalat. Already there are more than 100 hotspots across the greater Nairobi metropolitan area, with other cities soon to follow, Facebook says.
Although the hot spots are not free, the company says it will lower the cost as much as possible, in part by working with network carriers such as Etisalat Nigeria.
“People are sensitive to data prices on the continent,” Carolyn Everson, Facebook’s vice president of global marketing, told Bloomberg in Johannesburg in April. “Infrastructure is expensive and that is why we are looking for partners. We are partnering with telecommunications infrastructure projects and, as a result, bringing down the price of data.”
Facebook also recently announced the construction of 770 kilometres of fibre-optic cables in Uganda, which it hopes will encourage more users in the landlocked country.
Google, meanwhile, is also in pursuit of the “missing billion” – those mostly in developing countries who seldom go online. For its part the company spent the past year training 1 million African people through its Digital Skills Programme. About 20 countries participated, a Google spokesman says.
“Thanks to increased internet penetration in Africa, young Africans can now leverage online platforms to find information, to communicate and to create and publish content,” the spokesman said. To make learning easier, courses are often given in local languages such as Swahili, IsiZulu and Hausa, common tongues of east, south and western Africa, respectively.
The digital skills training can also be accessed through an online portal for ongoing training. This is currently available in French and English, but Portuguese is being added as well. Ultimately, Google hopes the trainees will use the Web to develop businesses of their own.
Google is also involved in Project Link, which has rolled out metro fibre networks in Uganda and Ghana. “More than half of the world’s 7 billion people are online but not all of them have good connections. We want to help improve their experience, as well as get the other half connected,” the company says.
Another Google effort is perhaps a little more fanciful. Project Loon is an attempt to provide internet via an overhead fleet of balloons. These will float on wind currents beaming down signals to access the Web. While certainly a bold idea, Project Loon has delivered mixed results. Last year a balloon was found crashed in rural South Africa. Numerous others have been found crashed at test areas around the world. A Google spokesman declined to comment on the topic.
business@thenational.ae
Follow The National's Business section on Twitter
Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
Three stars
Defined benefit and defined contribution schemes explained
Defined Benefit Plan (DB)
A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.
Defined Contribution Plan (DC)
A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
Company%20profile
%3Cp%3EDate%20started%3A%20January%202022%3Cbr%3EFounders%3A%20Omar%20Abu%20Innab%2C%20Silvia%20Eldawi%2C%20Walid%20Shihabi%3Cbr%3EBased%3A%20Dubai%3Cbr%3ESector%3A%20PropTech%20%2F%20investment%3Cbr%3EEmployees%3A%2040%3Cbr%3EStage%3A%20Seed%3Cbr%3EInvestors%3A%20Multiple%3C%2Fp%3E%0A
Stage result
1. Jasper Philipsen (Bel) Alpecin-Fenix 4:42:34
2. Sam Bennett (Irl) Bora-Hansgrohe
3. Elia Viviani (Ita) Ineos Grenadiers
4. Dylan Groenewegen (Ned) BikeExchange-Jayco
5. Emils Liepins (Lat) Trek-Segafredo
6. Arnaud Demare (Fra) Groupama-FDJ
7. Max Kanter (Ger) Movistar Team
8. Olav Kooij (Ned) Jumbo-Visma
9. Tom Devriendt (Bel) Intermarché-Wanty-Gobert Matériaux
10. Pascal Ackermann (Ger) UAE Team Emirate
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
