The key to Africa's advancing mobile economy

Access to critical banking services is becoming a reality in the continent thanks to the rise of mobile penetration and the partner ecosystem accompanying it

Africa is continuing to receive a high level of interest as an investment destination and is considered one of the major emerging markets of the current economic era.
Driven by its emerging middle class, rapid urbanisation and increased demand for key services such as healthcare, banking services, developing, and building IT infrastructure despite the disparity between north, middle and west Africa. Egypt is on top of the list of the countries that succeeded in putting itself on the e-commerce investment map as a step towards a new phase of deepening the understanding of e-commerce and mobile commerce in a more effective way.
Egypt succeeded in developing the IT infrastructure during the last ten years and was able to adopt several technologies allowing it to become one of Africa's key technology gateways, individuals and businesses in Africa are resilient when it comes to building creative solutions to social and economic challenges including ease of access to modern services such as medicine, education and water, but also e-commerce, e-payment and many other financial services.
Without access to financial services in, as well as easing access to these services, the physical facilities needed for these financial transactions, which are often dispersed across a very wide geography, makes it difficult for many people to get to. We are about to face serious problems which will hinder investment, especially given that there are certain communities that are still not able to invest in critical tools for farming, for example, or apply for loans or grants in order to start new businesses. This has a huge impact on the economy, employment, entrepreneurship, and more.
Rural areas of some countries can be so remote that the infrastructure does not even support people's travel needs to get to physical banks, ATMs, and so on. It's seemingly impossible for some communities to partake in financial transactions at all.
Commerce on the go
Despite some of these obstacles, parts of the continent are clearly enjoying economic growth, and it's largely thanks to local banking and telecommunications companies working with partners to deliver financial services through smart phones and even regular mobile phones. The advent of mobile technologies has plugged a significant gap in local economies, facilitating opportunities in every walk of life. Even though some people lack hard-line broadband services and access to computers, mobile connectivity has bloomed, and therefore a string of impressive but simple mobile services have emerged.
Mobile commerce has matured dramatically in the last five years, along with an opportunity to accelerate economic growth through transactions conducted through mobile phones. It's not just a user interface or the ‘look and feel' of mobile services that are making headway today. It is deeper than that. The real value is in the simplicity and flexibility that users are now enjoying through tailored programmes for mobile phones, for Africa.
One stellar example is the rise of M-PESA, a simple payment service that started in Kenya. Launched by Safaricom, a local affiliate of Vodafone, the system is accessible through an ordinary mobile phone and has revolutionised the way people in the country live, work, and do business. The key for M-PESA is not the commerce in itself. It's the method. The way people purchase in Africa is unique; very few people visit a website, for example. These preferences must be met and M-PESA has made a start in doing that.
Such services ultimately allow citizens to make simple financial transactions in an affordable and convenient way, offering huge opportunities for those lingering close to the poverty line. Since its inception in 2007, the service has witnessed incredible expansion. Just two years later in 2009, M-PESA had more than 9 million customers—almost half of Kenya's adult population. So successful is the product that it's now handling an average of $320m each month just from person-to-person transfers.
This is a success story for sure, but the era of mobile commerce is only just beginning. Technical challenges in ensuring flexibility, security and reliability of such services remain a question. New payment gateways are needed to support and manage transactions from the back-end so that customers can enjoy safe and trustworthy payments that extend beyond credit cards. The flexibility of mobile commerce systems also has to support simple transactions such as email and SMS—two widely used payment methods today. Moreover, new tools must allow local users to follow their entire transaction process regardless of the platform. That intelligence on the business end is highly important for service providers in Africa as they look to shape the future of innovation in the country.
Cautious optimism
The optimism for socioeconomic development is resonating in all corners of the continent, and we are eager to encourage this growth in the coming years. As dean of Harvard Business School Nitin Nohria said: "All across Africa, people are discovering there's an economy to be built. If business leaders jump in, there's a glorious future for Africa."
We believe in this optimism full heartedly, which is why Africa has become a key emerging market for IBM as we develop and deploy critical services that address the unique needs of the continent.
The region is working hard to advance citizens' lifestyles, and in doing so organisations often come to us with inquiries of how to improve access to their services. User-friendly web-interfaces, streamlined e-commerce solutions, and the use of analytics to personalise the customer experience have all helped pave a new path for mobile commerce across many sectors—from healthcare to retail and banking.
This opportunity has been made even greater thanks to technologies such as cloud. For example, a core issue in many local communities is the lack of physical infrastructure needed to support public services. With cloud, services such as bill payments can now be delivered virtually and are less dependent on electricity being available to a single mainframe in a single physical location. Cloud-based services are also able to receive fresh security and software upgrades instantaneously, rather than businesses having to update physical infrastructure at each business location.
With mobile commerce being powered by these new technological advancements, Africa has the chance to build new economies that will help provide jobs, services and education to future generations.
Amr Talaat is the general manager of IBM Egypt.