GET PREMIUM

Africa’s leapfrogging journey: Why infrastructure is a major stumbling block

For last year’s World Economic Forum on Africa meeting in Rwanda, Gary Coleman – the Global Industry and Senior Client Advisor for Deloitte Consulting – wrote that Africa has the potential to be the next great leapfrogging success story. But a greater sense of awareness has since kicked in and Coleman has recently written that it “appears at first blush that basic infrastructure could be a major stumbling block in that leapfrogging journey”. While Africa has made great leaps in connecting people to the likes of telecommunications services via mobile phones, there is still a need for roads and other basic infrastructure. However, Fourth Industrial Revolution technologies can help Africa in closing the infrastructure gap, as Coleman explained to BizNews along the sidelines of the WEF Africa Forum in Durban. – Gareth van Zyl

This podcast is brought to you by RMB. I’m speaking to Gary Coleman who is the Global Industry and Senior Client Advisor for Deloitte Consulting. At the end of last year’s World Economic Forum in Rwanda, you wrote that ‘Africa has the potential to be the next, great leapfrogging success story. One year later, what are your thoughts about that?

I still agree with the position and I’ve actually seen some progress so that’s positive, and I do believe that Africa has enough opportunity to find ways to leapfrog certain aspects of developed nations. But right now it’s starting small but the opportunity is there.

Are there factors that are holding the continent back?

Flag map of Rwanda

Yes some of the factors are obvious. One would be your infrastructure and some of the leapfrogging is actually getting around poor infrastructure. In Rwanda for example, Zipline has collaborated with other African companies and are actually using drones to deliver healthcare supplies in fairly remote places. That actually diminishes the need for grandiose roads. The roads still need to be there but that’s an example of getting around infrastructure needs and I would call that leapfrogging.

It sounds like technology is pretty key to Africa leapfrogging. What are some of the examples?

Well, to be clear; leapfrogging definitely relies on technologies and they’re usually technologies that are often referred to as exponential technologies. This would be going beyond just digital technology – getting into artificial intelligence, robotics (drones, for example as we just described) and so, technology is key. You can see leapfrogging occur in many different sectors but if I just go to agriculture for example. In Africa, something close to 75% of your farmers are using some form of exponential technology to test soil, get recommendations on what kind of seeds to plant, when to water, and what kind of fertilisers, herbicides and insecticides to use. Those sensors are occurring today in a large percentage of your farms.

It sounds like the Fourth Industrial Revolution, which has been a hot topic at events like WEF, such as it is, is actually becoming a reality in Africa.

I agree with that. The Fourth Industrial Revolution: when you look at how it’s defined, it often tends to give people the impression that it’s just for rich, developed nations like the United States, Germany, UK, or Japan etcetera but it’s really not. What I find is that there is an element of hyper-entrepreneurialism in some of the developing countries. There are also at times, regulations that are fairly business-friendly. They still regulate what it is they’re designed to regulate but they tend to be somewhat business-friendly and you can actually leapfrog companies like the United States. The drone example that I gave you… Drones are highly-regulated in the United States and actually, in other parts of Africa but in Rwanda, it’s fairly business-friendly. You have these drones that are flying 100 miles to deliver emergency healthcare supplies and that’s not happening as much in the United States.

Fourth Industrial Revolution

It seems that in Africa you often have these new technologies that are introduced and they disrupt the markets. Look at Uber for example, in South Africa, grew very quickly. South Africa, I believe is one of the fastest-growing markets in the world for that company. The regulators are starting to take notice of it. Is this something that you see a lot of in Africa?

It’s something I see all over the world. I was just in a session today at the World Economic Forum and the CEO of Zipline commented to the fact that when there is a disruption that goes on; all of a sudden, the regulators wake up and try to regulate it, and they don’t even know what the goal is. And at often times, it will stifle start-up companies just because it’s a miscalculation on what exactly needs to be regulated.

With your discussion with members of corporates and government here, are they open to Fourth Industrial Revolution technologies?

They definitely are and I don’t live in Africa so I can’t really speak. It’s mostly about what I read and what I listen to. There was a session today with President Zuma and Karl Schwab and the number of times that you heard the words ‘Fourth Industrial Revolution’, the number of times that you heard ‘a business-friendly public policy, the need to solve the talent gap’… It came up for a full hour so at least the discussions are being taken and the challenge will be if you can implement it.

How does Deloitte see itself in terms of its role with regards to helping Africa leapfrog?

Well Deloitte has a role globally. We’re very much on top of the Fourth Industrial Revolution. We probably are helping the vast majority of Fortune Global 500 companies figure out what it is that they do to take advantage of what the Fourth Industrial Revolution means and fundamentally to try to protect them from being disrupted and more often than not, try to find ways for them to be a disruptor in select markets that they participate in. Deloitte’s role in Africa is the same as it is elsewhere in the world.

Gary thanks a lot for chatting to me. This podcast was brought to you by RMB.

For a deeper understanding of the world of money and greater financial control, upgrade to BizNews Premium.