Did You Know That A Sovereign Wealth Fund Can Be Commitment To Social Development?

In this article the economist Celso Anato is quoted as saying “that the institutionalisation of (Angola’s) sovereign wealth fund is one of the most important steps toward economic policy”. I googled for the fund and found this on Wikipedia:

The Fundo Soberano de Angola (FSDEA) is the sovereign wealth fund of Angola.[1][2] FSDEA is due to play an important role in promoting Angola’s social and economic development and generating wealth for its people. The fund got rated by the SWFI in February 2015 with a ranking of 8 out of 10. (…) Based on an investment policy that was approved in June 2013, the FSDEA aims to generate wealth for future generations and support Angola’s social and economic development.

And this about an innovation hub the fund has launched. Interesting stuff! Despite of all the negative stories about Angola there seems to be something positive going on.

The above mentioned article in full length:

Angola: FSDEA Aligned With 2025 Development Strategy – Economist

Luanda — The “Fundo Soberano de Desenvolvimento de Angola” Angola’s Sovereign Wealth Fund (FSDEA) is aligned with the strategy that contributes to achieving the economic development model of the country by 2025, said Wednesday the economist Celso Anato.

The expert, who was speaking to Angop in Luanda on the importance of FSDEA, said that the institutionalisation of the fund is one of the most important steps toward economic policy.

Celso Anato described the FSDEA as crucial to meet the government’s commitment to social and economic development of the country.

He considered the step as an evidence of one of its major goals to contribute to meeting the basic needs of the population as well as create greater efficiency and competitiveness in the national economy.

The FSDEA, he said, is also government’s long-term concern to reduce the weight of the oil sector on the economy and create alternative investments in agriculture, mining and infrastructure.

With this initiative, the government will increase the growth capacity of the national economy, said the expert.

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Did You Know About The Importance Of Infrastructure?

In my past blog entries I have focused on different types of innovation in Africa. However, an important condition for innovation to flourish in a given country, is infrastructure. It is a well known fact that countries with good (public) transport systems, energy and sanitation systems have better economic performance and less poverty. Hence, infrastructure is a necessary condition for a country to flourish – economically and socially.

Unfortunately, the infrastructure gap in Africa is large. As a report issued by Milken Institute (Link: http://www.milkeninstitute.org/publications/view/709) states, the biggest infrastructure deficit is in the power sector, leaving more than 60% of Africans without access to electricity.  But the good news is, that currently there are a lot of investments going on to improve infrastructure in many countries in Africa. According to Brookings Blog (Link: http://www.brookings.edu/blogs/africa-in-focus/posts/2015/01/22-infrastructure-foresight-africa-gutman) there are six important priorities to keep in mind when talking about building up efficient and effective infrastructure in Africa. It sure seems like there really are some important lessons to be learned here – Read more here (Link: http://www.brookings.edu/blogs/africa-in-focus/posts/2015/01/22-infrastructure-foresight-africa-gutman)

Did You Know That Innovation Does Not Always Mean To Create Something Completely New?

Innovation can be the result of simple chance, of a major flaw of a system (and the pain and need to come up with a solution) or of a deeper insight into either something new or into novel qualities arising from combining existing elements in a new way. The flaw of a system can be the consequence of system failure or of major and fast changes that societies struggle with. In Africa change is happening so fast that we can expect innovation to become a driving factor for the continent’s further development. Industrialised countries which see Africa mainly as a source of resources and cheap labour and their own strengths in innovation are well advised not to underestimate the power of the African innovation eco system.

Did You Know About The Importance Of Social Innovation In Africa?

Lately I’ve spent a quite a lot of time searching the web for social innovation happening in Africa. My increased interest in social innovation stems from an article I’ve read on the Africa Innovation Summit’s Blog. The article highlights the importance of creating innovation by the people, for the people. After all, that is what social innovation is about.

As an example for such innovation, the article mentions MRushwa, a mobile and web based application designed to fight corruption in Tanzania. It aims to encourage citizens to report corruption online. The advantages are obvious: Spreading the word about potentially corrupt businesses increases public awareness about this issue and prevents citizens from falling into the corruption trap. Furthermore, as the article highlights:

What these solutions have in common is their elegance – that precarious balance of a system that is technologically sophisticated but is also user-friendly and can be used by an African in a rural African setting characterised by low literacy rates. Modern meets rural.

Reading about this application and about the benefits of social innovation in general reminded me of a blog post I did earlier on mobile banking in Africa. Since many Africans are using mobile phones, there is a huge potential to be tapped here. However, as the article I was referring to earlier in this post also states, challenges are manifold – It will be interesting to see what the future brings for African social innovation and how these challenges are being faced in the future.

Clearly, Africa has the capacity and talent in its youth to develop innovations of magnitude and serious problem- solving capacity. However, given how entrenched the African development challenge is, this is not enough in its own. There is also a critical need to increase the rate at which such innovations are emerging and the speed of go-to-market as well as the scale and spread so that they have greater reach and impact. I can’t help but observe that most innovations are concentrated in Kenya. This is where the private sector’s leadership role can be realised. More specifically, the African private sector. Browsing the CcHUB website, I note that they have support from Google, Nokia, Blackberry and Samsung – amongst others. In East Africa, Vodacom has been instrumental to MPesa, MRushwa and MFarm. The African private sector is woefully conspicuous by its absence apart from the Tony Elumelu Foundation, a leading pioneer of impact investing in Africa.

The dilemma for me is that there is talent in Africa brimming with solutions but the money is not very forthcoming. We desperately need more Africans funding African solutions to African problems if Africa is to claim the 21st Century. If the African private sector is unable to fund such hubs and innovations over and above their current budgets, I would urge them to rethink their existing Corporate Social Investment (CSI) budgets. What if, for example, a portion was redirected to funding such hubs and innovations? There really is no greater social investment than giving a young African an opportunity to commercialise his/her innovations, create jobs in the process and become self-reliant. There is no greater social investment than giving our youth a platform to harness their creative abilities for the betterment of the continent. It would appear to me to be a relevant, appropriate and sustainable form of CSI suited to Africa’s needs and future. Alternatively, the African private sector could choose to view these nascent innovations as business opportunities and invest in them early. Either way, as a new form of CSI or as a business case, investing in our talent would appear to be a win-win!

Did you know that Angola and Switzerland together are launching three incubator hubs?

Yesterday when I searched the web for interesting projects happening in Africa I came across an interview with Emeka Okafor, a Venture Catalyst and Entrepreneur whose past and current projects include Maker Faire Africa, Serengeti Tea, Africa Innovation Foundation, TED Fellows and the X Prize Foundation. His insights and initiatives are said to be at the forefront of emergent systems, maker innovation incubation and the creative industries.

The article I found states that “on April 13, 2015 Angola’s Sovereign Wealth Fund announced the launch of five Investment Funds, targeting economic and social development in Sub-Saharan Africa. These will be accompanied by the establishment of a commercial vehicle to set up micro-business incubators for Angolan entrepreneurs”.

In other words: Angola is planning its own innovation or incubator hubs. The article continues:

The inspirations for these projects include the Brooklyn Navy Yard and Media Lab in the United States and African projects like Gearbox (Kenya) and AMP (Ghana). Three targeted platforms — African Accelerator Markets, ‘Sopa de Sabão’ Culture Hub and Cabinda Port Tech Hub & Prototyping Lab — will deliver cultural, economic, social and technology goods and services that capitalize on human capacities and capacity building. The ‘Sopa de Sabão’ Culture Hub will be supported by the Swiss-based African Innovation Foundation.

The African Innovation Foundation is also the driver behind the Innovation Prize for Africa. I didn’t know that Switzerland is playing such an important role for the African innovation system. Who would have thought that a country famous for its cuckoo clock and chocolate would play such a role in Africa?

The article continues with an interview:

Project director and curator Emeka Okafor is enthusiastic about the possibilities this project can offer for economic development and peace in Angola.

Q: Mr. Okafor, why are you so enthusiastic about this project?

A: The intention is to create interlocking innovation hubs that will harness innovation, creativity and the existing entrepreneurial ability within Angola. We will bring in the best practices with high impact, adapt them to the local environment and create the basis for what will be the leading example for an African creative innovation hub. Our vision is to help unfold Africa’s innovation potential and to contribute to peace and stability through prosperity and best business practices.

Q: What is the current status of the project?

A: We are in the process of launching a management company that will provide advice and support to all teams involved with the development of the three different incubators, which will be deeply engaged with their surrounding local communities. We are going to open up opportunities for people and accelerate the incubation of new ventures. Another objective is to diversify the economy in Angola by using non-conventional manners.

Q: What does that mean?

A: We will bring in experiences from outside Angola, look at what is on the ground already and then blend these approaches with what we think can work in Angola. It is going to be bottom-up. We are looking to build something that nobody ever before has built in Angola.

Q: Your plans sound very positive but are they also realistic?

A: Similar projects have been successful in the past, in the United States as well as in Africa. We studied the success stories of ‘Maker’ type projects of various scales internationally and across Africa to combine the best lessons of these projects as guidelines for this new venture.

It will be interesting to watch the development of these incubator hubs. Unfortunately I couldn’t find any more recent information.

Did you know there was a Twitter Chat on innovation in Africa last month?

The Innovation Prize for Africa (IPA) hosted its first ever Twitter chat on Wednesday, 23 September 2015, entitled: Why Innovation Competitions are Important in Africa. The Twitter chat featured IPA Director, Pauline Mujawamariya (@PaulineM4), CEO of The Innovation Hub in South Africa, Mclean Sibanda (@mcleansibanda) and IPA 2015 prize winner, Alex Muriu (@hellomuriu).

IPA calls itself “a landmark program of the African Innovation Foundation whose purpose is to increase the prosperity of Africans through catalysing the innovation spirit in Africa.”

Of course you can read through all the tweets but here I would like to highlight some of them, which I find most interesting:

We have 2 prizes launching this month – in Kenya and Clean City Challenge Ghana | |

So there are more prizes, not “only” the IPA.

 23. Sep.Übersetzung anzeigen

pay Attention to the future of the Innovators; we like to know if our prize will move the Innovator Forward or not

The IPA is trying to identify the best ways of supporting innovators.

What’s early stage in ? 2 months 2 years?

Good question!

over and above prize money however, the key is follow up. Most competitions end with the award ceremony

An important lesson!

Prizes shouldn’t be necessarily financial. Can be Assistance from Institutions like

 These are just a few quotes. A vast majority of the tweets covered the necessity to offer follow-up support to innovators after the award ceremony. This seems to be a key factor to successful innovation. Is that true only for Africa or for start-ups in general?

Did You Know That Africa Is Leading the Way in Adoption of Mobile Banking?

The wide distribution of mobile banking – payments made by mobile phones, sometimes by simple text messages – was my first impression of the amazing innovation that is happening in Africa. The continent is so different from what most outsiders think.

I found this article by Agence France-Presse , 28 April 2015, which saves me from writing everything from scratch. Feel free to read it.

Services allowing consumers to perform banking and payment operations on their mobile phones are surging in sub-Saharan Africa, blazing a trail for the rest of the slower-moving world to follow.

Given that relatively few Africans have traditional bank accounts while most now own a mobile phone, it is of little wonder the region has taken the global lead in using the devices to pay bills, make purchases, manage their savings or get fast access to cash.

A report last year by Swedish telecom company Ericsson said mobile subscriptions in sub-Saharan Africa were set to surpass 635 million by the end of 2014 a figure “predicted to rise to around 930 million by the end of 2019.”

Data from the World Bank for 2014 also showed that while less than 29 percent of people aged 15 and over in the region had a traditional bank account, around 10 percent possessed an alternative accessible by mobile phone. That figure rose to over 50 percent in countries like Gabon, Kenya and Sudan.

Overall, the World Bank found 16 percent of sub-Saharan mobile users have used their phones for banking purposes a figure larger than any other global region, and ripe for far wider use still.

In 2014 alone, about $67 billion in funds were transferred by African expatriates back to people on the continent. With fees charged by mobile banking companies for transactions generally lower than traditional intermediaries like Western Union, the growth potential for financial phone applications appears enormous.

For now, however, telecom operators in Africa largely limit mobile services to buying phone credits, paying water and electricity bills, or making money transfers and cash withdrawals relatively basic but considerably handy services to local clients.

‘Real social service’
“Paying an electricity bill in Africa takes a half a day because there are very few offices where that is possible. So there’s a real social service in being able to settle bills from a distance,” said Alban Luherne, director of Orange Money, the mobile banking unit of French operator Orange.

The Boston Consulting Group estimates that further development of mobile payment applications could generate as much as $1.5 billion in sales by 2019, when it says the number of Africans possessing a mobile phone should increase by another 25 percent.

“This segment is very new, with the numerous companies active in it mainly being start-ups positioning themselves,” said BCG consultant Othman Omary, adding that “there still isn’t an actor of reference.”

The exception to that rule, Omary noted, is Kenya’s M-Pesa service by British telecom giant Vodafone’s subsidiary Safaricom, which has become a leading force in the sector.

But even there, he said, M-Pesa’s success has been built mostly on a favourable regulatory and technological environment absent in other markets.

“There have been many difficulties, even failures in the sector, M-Pesa notwithstanding,” said Georges Ferre, a consultant with the Roland Berger consultancy.

“For things to work, you need a country with supportive regulation and reversals in cultural attitudes that often view money as meaning cash,” he said.

Omary said that as mobile banking models are developed in Africa, they’ll need to take into account the very low income flows of their main client base.

That means prices charged for services must be limited to affordable levels to encourage widespread use.

“If processing costs are similar to those of a traditional bank, making a profit is going to be difficult,” Omary added.

Because of that, said Orange Money’s Luherne, return on investment must remain a relatively long-term concern, as consumers gradually embrace management and spending of their money in digital format.

“We initially launched this service to enhance customer loyalty, and that has proven extremely effective in doing so,” he said.

But “over the years, we realised it was a source of revenue in its own right, and a new growth activity for the group,” he added, noting Orange Money now generates five percent of company income.

Orange Money is going even further, preparing credit offers via mobile phones in partnership with the pan-African Ecobank. It is also considering providing savings and insurance plans by mobile.

Omary said that large-scale migration to new mobile banking capacities may occur faster than some expect, with many people in Africa already used to alternative borrowing options like loans from relatives to obtain needed cash.

“Mobile phones could be an interesting alternative to that in terms of cost and security,” he said.

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