African startups expanding abroad must pick the right markets

Lumkani has developed an early warning system to reduce the damage and destruction caused by the spread of shack/slum fires in urban informal settlements. (Screenshot: lumkani.com)

Talk to African startups these days and all you hear is “expansion, expansion, expansion”. It comes in all shapes and sizes. A Cape Town-based company immediately plans to expand to Johannesburg. A Kenyan company always has Uganda and Tanzania on their hit list. And, in rarer cases, there are those African firms that are thinking of taking their product outside of the continent.

This talk of expansion has been louder in the last couple of weeks. Kenya’s M-Changa, which allows community fundraising via a mobile app, is set to launch operations in Tanzania. Ghanaian mobile event app Suba has its eyes set on Nigeria, as well as the more ambitious destinations of Miami and Rio de Janeiro. South African fire-detection startup Lumkani is looking to go nationwide, but also has global ambitions.

Suba is a kind of family photo album for mobile, allowing multiple people to contribute and save their favourites for safe-keeping. (Screenshot)

Startups generally expand because – apart from perhaps feeling it is something that everyone must do – they need to reach new, bigger markets. This is very often the case in Africa, as populations are generally small and the proportion of the population with adequate spending power to sustain a business even smaller. Yet seeking a bigger market does come with its difficulties.

Some companies can scale to other markets too early, when they lack the necessary resources to properly launch in a new destination. Launching anywhere for the first time is an expensive effort – it needs bodies on the ground, marketing, and technology to be built. You need enough capital.

But you also need an awareness of the market you are expanding into. Suba, for example, is a great idea, but does its team know for sure that it is an idea that will be welcome in, for example, Nigeria? What are the different market dynamics? What is the competition there? What cultural differentiators are there? Is there a political situation? Are there different legal frameworks? In some cases, even aspects as basic as language can be an issue.

Recruitment is a major factor should a startup decide it wants to launch in another country. You’ll need quality people on the ground that understand the local market, but does a CEO trust them to run the show entirely? If the CEO decides to temporarily relocated, who takes charge back home. If recruitment is essential during the very early stages of a startup’s life, it is just as important when it comes to overseas expansion.

In general, the easiest scenario is to pick a market that is much like your own. Kenya as a market is vastly different from Nigeria, but more similar to Uganda and Tanzania. The latter two, then, would seem to be more likely targets for expansion, as they undoubtedly offer a significant growth in market size as well as fewer pitfalls. East Africa, in fact, is undergoing an integration process currently that will make it easier for startups to expand within the region.

At the recent Connected East Africa event in Kenya, this economic integration to ease trade and regional expansion was top of the agenda. East African countries are expanding the One-Network-Area – which allows for lower roaming charges on calls and SMSs between Kenya, Uganda, Rwanda and South Sudan – to data and mobile money. Other non-tariff trade barriers look set to be removed, while transport links are being improved and the region is becoming more interconnected.

This integration offers companies in the region opportunities. A startup with a market limited to 45 million Kenyans can now more easily think about expanding their product availability to 49 million Tanzanians or 37.5 million Ugandans. The making and receiving of payments will also get easier, thanks to the expansion of the One-Network-Area and the gradual move towards mobile money interoperability. The improvement of transport links and internet connectivity will ease logistical issues.

This regional integration makes expansion – at least to neighbouring countries – a little easier for East African startups. The same is not necessarily true elsewhere. Expansion is a way of life for any startup that wishes to be successful. But the most important decision will be choosing where to do that.

Tom Jackson is a tech and business journalist and the co-founder of Disrupt Africa.

9 years ago

Togo’s taxi drivers left behind by growing economy

(Pic: Flickr / Claudio Riccio)

Swarming the streets of Togo’s capital Lome, thousands of motorcycle taxi drivers are just some of those left behind by the recent economic growth spurt in the crushingly poor nation.

Some have college degrees and work multiple jobs but still take home as little as $1.60 a day transporting passengers in the west African country that is gearing up for presidential elections on Saturday.

“There is no work,” said 31-year-old Gabriel, a driver who holds a high school diploma. “Everyone is a motorcycle taxi driver. There are thousands of them – too many.”

While Togo now hits six percent economic growth per year, more than half the country of roughly seven million survives on less than $1 per day as the nation claws its way back from 14 years of international sanctions.

“Young people are being suffocated by unemployment in Togo,” said Maurice Toupane, a researcher at the Institute for Security Studies in Senegal’s capital Dakar.

“Many young people are leaving the country for Nigeria and the holders of university degrees find themselves driving motorcycle taxis.”

The drivers – known locally as Zemidjan or zem – do not own their bikes, instead they have to slowly pay back the cost.

It is no easy feat to come up with the money on what the drivers make. They might earn about 7.50 euros per day, but three euros goes on paying for the bike and three more on fuel.

On the really lean days they can dip into the community fund called a “tontine” that aims to help people take home 1.50 euros to their family every night.

For many drivers, the motorcycle taxi is their second job. Among the 15 or so drivers waiting for customers in Lome one day recently was a woodworker, a tailor and a cobbler, who was putting a new sole on a shoe.

Unemployment
The thaw in Togo’s economy began with the country’s current leader, President Faure Gnassingbe, who is running for a third five-year term.

He took over in 2005 after the death of his father Gnassingbe Eyadema, who had ruled with an iron fist for 38 years.

During Eyadema’s reign the European Union suspended aid in 1993 in response to a “democratic deficit”.

The gross national product, life expectancy and the number of children at school all dropped during that period and state businesses were left abandoned.

In that era “the country was bled dry by 14 years of international sanctions,” said Kako Nubukpo, Togo’s minister of long term strategy.

The money began to flow again in 2007 when the EU decided Gnassingbe possessed “good will”, after reforms leading to press freedom, multi-party politics and abolition of the death penalty.

Gnassingbe has taken a proactive approach by cleaning up public finances, embarking on large infrastructure projects and offering free primary school, all things that he has reminded people of during the election campaign.

Additionally, the GDP has doubled in 10 years and public debt has remained relatively low.

But the improvement in the economy cannot hide unemployment that is close to 29 percent, with a majority of young people out of work, said Nubukpo.

And those gains that have been made – driven by commodity prices – are mostly benefiting the wealthy, according to the United Nations.

Two-thirds of Togolese, meanwhile, still make their livings as subsistence farmers.

The majority of the motorcycle taxi drivers are in their 20s, reflecting the demographics of a country where three quarters of the population is under 35. The nation doubles in size every 25 years.

“It’s a sprint between the speed at which our society modernises and its capacity to include young people,” Nubukpo said. “We must give some hope to young people otherwise we run the risk of a social explosion.”

9 years ago

The mlungu in the room

A mosaic of Leo and Makhosi. (Supplied)

So this is the place she had always called home; a jumble of houses, shacks and unpaved roads in between the beautiful rolling green hills of KwaZulu-Natal. My parents and I are probably the only white people in a 20km radius. I feel like an intruder. Even at the burial, as I closed my eyes and listened to the singing of the choir coupled with the rhythmic sound of spades filling up the grave with sand, I felt their eyes watching me. Was it really my place to be here?

But as I stepped into the room, I forgot all that. It didn’t matter because this room smells exactly the way her room used to smell. The staff quarters at the back of our house and this room in the middle of Zululand, 300kms apart, are one and the same. I know how terrible it is to say this but I literally cannot describe the smell. It is simply a thousand memories of my other mother.

“This is Makhosi’s mfana”, Mabel tells the other gogos sitting in the room. I feel seven pairs of eyes looking at me, sizing me up. There’s a laugh and a smile and everyone waves at me. I feel a bit more relaxed and looking down I have to smile as well. Laid out on the floor are bowls of rice and dark purple beetroot, plates heaped with butternut and pumpkin and two big pots of stew. And this is just for seven old ladies; there are another fifty people outside all being served plates of food. Everything looks like it was made by her, everything smells like it was made by her; but of course it wasn’t.

We hand over the gifts we’ve brought for the family: a big bunch of flowers and a framed collage of photographs my mom had made. For the first time I really do have to cry. The four pictures of me and Makhosi are handed around the room for all the gogos to have a look at and everyone laughs, smiles and points at me again. No one can believe how big I’ve grown. The mood seems to sway between cheerful hopefulness and total sadness.

There’s someone hurrying around trying to organise a plate of food for me. I keep getting asked if I want some of this or some of that. I keep trying to explain that it doesn’t matter, that I’ll eat whatever I’m given. The Zulu whirls all around my head and of course I can’t understand it, but I do catch one word that I know: mlungu. I finally sit down and take a look at my plate: a mountain of rice covered in gravy and beef, large spoonfuls of mash and butternut and chakalaka. To top it all off, I am offered a chicken drumstick from a bowl that’s being passed around. It’s time to tuck in.

I hear the cow that’s walking around outside moo as I bite into a piece of beef and I feel kind of guilty. The feeling only lasts a few moments, because the stew is amazing. Every bite of rice covered in rich gravy reminds me of being asked to try whatever Makhosi was making, to tell her if it was all right. It was always better than all right and so was this. I turned to the mash and the butternut that had also been soaking in sauce. I was surprised by a sudden burst of sweetness as I discovered little peas tucked away every now and again. I remember the times she used to babysit me when my parents were out and ask me what I wanted for supper. Mashed potatoes were a popular response.

I remember her trying to convince me to eat my vegetables so that I could grow up big and strong. I didn’t need convincing this time as I attacked the bright orange butternut. It was warm and sweet and silky smooth. The rice, the gravy, the mash and the potatoes seem to conglomerate into one big ball of flavour that is chewy and smooth, sweet, savoury and a little bit spicy all at the same time. The spiciness I realise, is from the chakalaka that I haven’t even tried yet. Why is everything so good? The combination of beans, tomato and chili is an explosion of tangy flavour followed by a mild heat.

Someone has handed me a plastic cup filled with some bright yellow, fizzling drink and a sip of the cold, sweet juice is the perfect counter to the heavy, humid heat. I was never allowed this kind of thing as a child, but she sometimes let me take a sip of her coke when my mom wasn’t watching. The drink seems to accentuate the flavour of the food and the tastes are suddenly much sharper. My dad loves to tell me which two hundred rand wine pairs well with the perfect rump steak but I bet he doesn’t know how well Pine Nut Cream Soda goes with beef stew. I finish off the last bits of succulent fat and hunt down a couple of runaway peas until my plate is almost empty.

There’s just the drumstick left. I picked it up with my hands, ignoring the fork I had been using and ate my chicken the proper way; the way she taught me. The crispy skin, the tender flesh and even the knobbly bits on top; I ate everything. All I was left with was the bone and I knew what I had to do. Biting into the bone was my final goodbye. Exactly the way she used to, sitting in her room, with its wonderful aromas, and biting into chicken bones. I found the crumbling, dark brown marrow hidden inside and let the memories consume me.

I thought about everything I had experienced today and had to smile in amazement. The brightly coloured dresses, the beautiful singing and the abundance of food; this was not a mourning of death, but a celebration of life. It was not tea and sandwiches after a depressing service, it was love and warmth put into feeding a hundred people. They hardly have money to live, but there’s money for Makhosi’s umngcwabo. It truly was a special way to remember a special person.

Sibongile, Makhosi’s sister, is walking us to the car; it’s time to go home. “You’ve got a little one as well, don’t you?” my mom asked. A shout and a woza later a little albino boy is running up to us to say hello. “God gave me a mlungu, just like you!”

I’m not sure why I put the Lego man in my pocket this morning. I suppose it was some sort of keepsake. I’d wanted to put it at her grave, but it hadn’t felt right. I bent down onto one knee, “Makhosi and I used to play with these together. But I’m big now and I don’t need it anymore.” I placed the little yellow figure in the milky white hand.

I turned around one last time before getting into the car and saw the little albino boy running to show his friends the little yellow man.

Leo Karamanof is a Grade 12 student at the Deutsche Internationale Schule Johannesburg. This story was an English essay on the topic ‘A remembered meal’ , and was inspired by his visit to Makhosazana Dlamini’s family home in Newcastle for her funeral.

9 years ago

South Africa deploys soldiers to anti-immigrant hotspots

South African soldiers who were deployed overnight to tackle gangs hunting down and killing foreigners after at least seven people died in a wave of anti-immigrant violence. (Pic: AFP)

South Africa sent soldiers on Tuesday to help stop anti-immigrant violence in areas of Durban and Johannesburg where at least seven people have been killed in the past three weeks.

South Africa has been criticised by governments, including China, Nigeria and Zimbabwe, for failing to protect foreigners as armed mobs were shown on TV looting immigrant-owned shops and front-page photographs in a Sunday newspaper showed a Mozambican man being beaten and stabbed to death in broad daylight.

Defence Minister Nosiviwe Mapisa-Nqakula said a Zimbabwean couple were shot in the Johannesburg shanty town of Alexandra on Monday night but survived.

Briefing reporters on the deployment of troops to Alexandra and to the coastal town of Durban, where the violence started, she said: “There will be those who will be critical of this decision but the vulnerable will appreciate it.”

Zulu King Goodwill Zwelithini defended himself on Monday against claims that previous comments he made about foreigners sparked the anti-immigrant attacks.

On Tuesday, four men, aged between 18 and 22 years old, were charged in Alexandra’s Magistrates Court with the murder and robbery of the Mozambican man, Emmanuel Sithole, a street vendor in the low-income area.

The men covered their heads with hoodies when they were brought into the court. They are set to appear again on May 4.

Outside the court, protesters picketed and locals gathered.

“It’s not right this thing, they shouldn’t have killed him,” said Fulufhelo Ravhura, a 37-year-old Alexandra resident. “That guy was selling sweets and cigarettes, how was he stealing anyone’s job?”

Read: Murdered Sithole’s family: No faith in SA justice

Periodic outbreaks of anti-immigrant violence have been blamed on high unemployment, which is officially around 25 percent although economists say is much higher, widespread poverty and vast wealth gap.

Hundreds of Malawians marched on South Africa’s High Commission in the capital Lilongwe on Tuesday, demanding charges be laid against King Zwelithini amid calls for a boycott of South African businesses.

Malawi’s Information Minister, Kondwani Nankhumwa, said on Monday two Malawians were killed in the attacks and that efforts were under way to repatriate about 3 000 of its nationals.

In Zambia, two private commercial radio stations have stopped playing South African music.

In 2008, South African troops helped to end violence after more than 60 foreigners were killed in similar unrest as locals vented frustrations, particularly a lack of jobs.

9 years ago

Tackling poverty and inequality: My chance at the UN

My own government in Uganda has over the years made several commitments towards ending poverty and inequality. These were often drafted by international bodies like the United Nations and targeted things like universal primary education and halting the spread of HIV and AIDS, malaria and other deadly diseases before 2015.

Now it’s 2015 and we are back here again, a new list of commitments is being agreed on, many of the same problems remain, but the big difference this time is I’m getting to have my say. I, a 32-year-old young Ugandan woman, will address the UN this week, to share my perspective and that of my peers.

This year is the deadline for achieving the Millennium Development Goals. Uganda’s chances of this remain doubtful, mainly due to implementation failures. Uganda’s case is not any different from Mozambique where I am a VSO volunteer working on girls’ education. Programmes like the Universal Primary Education (UPE) in both countries that registered progressive results at the beginning have recently been criticised for focusing on quantity and not quality, for a lack of supervision and checks from government. While commitments were made, they lacked any harmonised implementation mechanism for the development policies or mechanisms for collective responsibility.
So, I’m happy that as the next development agenda is being created there is more focus on producing goals which are sustainable in nature and that there is talk about creating clear plans for the ‘means of implementation’ which will be needed to reach these goals. Better still, the negotiations around how these goals will be funded is ongoing and I will be part of a group of civil society stakeholders able to participate in that discussion.

Now, what about my two-minute speech in New York on Thursday? I nervously picture big rooms, meeting points, people from different walks of life, cameras, and all communication gadgets. The programme tells me I have a slot together with nine others to talk about “The relationship between FFD and post-2015 process (global partnership and possible key deliverables and transformative ideas such as in relation to capacity-building, infrastructure, energy, social floors and agriculture etc.”

I don’t think my friends and family would understand that title but I will talk about what I know: volunteers and the change they can make and girls’ right to education. The role of volunteers in achieving these new sustainable development goals cannot be underestimated. They are people placed at the community level alongside local people and are the very heart of development. Volunteers build capacities by training communities on a wide range of issues, contribute to better health by offering their services alongside the paid professionals, they help to deliver education to some of the most marginalised and excluded communities, and empower people at a grassroots level to participate in affairs that concern their own development. Member states must reflect on the importance of financing and supporting the interventions of the volunteerism sector.

Ugandan schoolgirl Violet Nalubyayi stands in front of a black board in Lwengo on February 25 2014. (Pic: AFP)

I am also conscious that I need to be a voice for the marginalised girls in Mozambique with whom I work. While the rest of the world is advancing in terms of accessing equal education opportunities for boys and girls, 80% of the girls in Mozambique drop out of school. Poverty, early marriage, the long distances to school, and negative community perceptions about girls’ education have robbed girls of the opportunity to access life learning opportunities. I want to raise these issues during my one to one meetings with delegations and get support to finance development work that will ensure inclusive, equitable, and quality education for all.

And one of those UN member states is my own native Uganda. I hope they will hear my voice and feel some sense of accountability. I hope too that the government of Mozambique where I volunteer will hear the message and that the rich country governments work with them so that together we can shape this new world I want to grow old in.

Elisabeth Kisakye is a VSO volunteer and human rights activist from Uganda working in the Instituto de Comunicação Social in Moçambique. She is supporting girls’ right to education by designing and implementing the DFID-funded Girls Education Challenge Project advocacy strategy in Mozambique. She blogs at elisabethkisakye.wordpress.com