@eliseleclerc, Funchal, Madeira
With contributions from the M-ITI social tech research team
‘Some young people hide from their parents to attend entrepreneurship skills workshops as it is seen as a lowly subject ‘’for losers’’ in their culture’ (Tech hub manager, Gabon)
Sub-Saharan francophone Africa’s lateness in jumping on the bandwagon of global models of technology entrepreneurship seems to be a universally accepted fact. Many articles describe how anglophone African countries have a ten-year head start due to a number of factors, including a more flexible business culture and regulatory environment inherited from the Anglo-Saxon model.
Reports on the tech hub and business markets in Africa invariably give francophone African countries low rankings compared to anglophone countries (GSMA 2016 report on tech hubs, Doing Business 2014 report). However when our study set out to discover the sub-Saharan Africa social tech ecosystem in francophone Africa, I found huge enthusiasm and a great potential for social tech development with the right support.
I spoke to social tech players on the ground, from entrepreneurs to tech hub managers in Togo, Bénin, Côte d’Ivoire, Sénégal, Cameroun, Gabon, Madagascar, and they all agreed that despite this, tech startups have an enormous potential in francophone Africa if a number of barriers can be removed.
Tech entrepreneurs have so far shown extreme resilience and passion for what they do, which can be seen as another form of business culture adapted to their context. They are often people returning from the diaspora (‘re-pats’) to start a tech company in their home country, and they have shown great creativity and imagination in overcoming local obstacles. One hub writes fake landlord contracts for its entrepreneurs in order to enable them to register their companies, (the system is not joined up enough to realise no rent is being paid nor received), while others provide free early breakfast to help their customers focus on their work throughout the day. Another is generating much-needed revenue by authoring ‘soft-landings’ reports for entrepreneurs seeking to do business in neighboring countries. In Cameroon, where the internet was shut down for three months in early 2017 in the anglophone part of the country, entrepreneurs told us that they used intermittent proxy servers every morning to check if they had received important emails, and if they had, they then traveled for several hours to the francophone side to find a place where they could answer emails. In Gabon entrepreneurship is not valued as a career path, and youth organisations have been working with secondary schools for several years to encourage entrepreneurship and business skills. One youth organisation manager told us that while they have broken new ground with many students, their parents still believe that business skills are for those who have failed at school and haven’t been able to find employment, leading students to hide from their parents to attend entrepreneurship skills classes.
Marc Lepage, Innovation Advisor at UNDP in Africa, told us: ‘francophone African countries are lagging a bit behind slightly, but are catching up rapidly...There are some differences and many cultural aspects that set them apart. Tech development is more recent in Central and West Africa, and therefore people are not doing tech full time. Another interesting angle is the recovery and resilience aspect, for instance countries recovering or still affected by the Ebola outbreak in West Africa.’
Some startups are looking for women-only hubs; a female entrepreneur from Bénin explained she felt that, ‘with a similar idea, men have more chance of being financed than women.’ Many startups are also having to run two ventures to be viable. A FabLab manager from Senegal told us: ‘we are only managing to survive by running a commercial venture at the same time as an NGO to overcome the absence of social enterprise status.’ Such enthusiasm and creativity demonstrates the dynamism and resilience of the tech scene in the region.
And indeed they are well on their way: the old reliance on the French-African axis, which is still funding tech hubs through the Organisation Internationale pour la Francophonie (OIF), is slowly making space for a more diverse influx of investment and enabling entrepreneurs themselves to find seed funding for their ideas. French agencies like the OIF and the Agence Française pour le Développement (AFD) have undeniably had a critical role in developing tech hubs and tech competitions in francophone Africa over the last few years, but the entrepreneurs themselves have had to find their own seed funding, either from personal income or from crowd-sourcing, which has widely limited the impact of these initiatives on start-up creation.
It is to plug this gap that new investment funds sponsored by I&P are now opening in francophone Africa, with a funding strategy that should be crucial for tech startups. One of those is Teranga Capital, co-founded by Olivier Furdelle in Senegal in 2016. He explains that ‘the financing amounts are lower (€75K-€300K) than the private equity players usual thresholds and the criteria slightly different in order to support entrepreneurs who are at an earlier stage of their start-up, i.e., who have at least started selling a viable product or service and performed their proof-of-concept on a small scale, even if their company is not yet registered.’ Further upstream in the entrepreneurship process, a seed funding and acceleration program between I&P and USAID will soon provide 0% loans of €10K to €25K to entrepreneurs who have not yet reached a commercialisation stage, and who need seed funding for the concept phase of their idea.
But diversifying seed funding is not the only key to the development of tech innovation in sub-Saharan francophone countries. Another challenge is communication, not only between tech hubs within the same country (a certain rivalry between tech hubs seems to impede collaboration, with many not aware of or not working with other hubs in their town), but also among hubs across sub-Saharan Africa. Marc Lepage explains: ‘What is needed is support around networking and collaboration between hubs and development organisations within a single country and beyond, in order to share not only information but also innovation practices, along a South to South axis, rather than solely North-South.’
The role of the diaspora, alluded to earlier, is often seen as a key ingredient for fostering further tech innovation in the region, and again there seems to be a difference between anglophone and francophone sub-Saharan African diasporas. While we have met with large anglophone diaspora organisations like UK-based Afford, we were told by Togo-born Claude Grunitzky that his attempts at creating a francophone equivalent (Welcoming Diasporas) had been very difficult. Many entrepreneurs have had to find seed funding in Europe or the U.S. in order to start their company in Africa, and diaspora engagement with their African community varies enormously from one country to another within francophone Africa. The Senegalese diaspora for instance seems particularly active when it comes to creating tech innovation, and this could be one of the many factors that have helped the country become a pioneer of tech innovation in the region.
While ‘re-pats’ may be one way of increasing tech entrepreneurship, their dominance in the tech sector may also be a sign of dysfunction in how teams and pitches are recognized as investor-ready, or socially beneficial. When, early in our study, we first noticed the high numbers of ‘re-pat’ founders in the African tech sector, we concluded ‘re-pats’ were especially well-primed to combine locally and globally circulating forms of knowledge. Success rates in attracting funding and media attention enjoyed by ‘re-pats’ and expats, however, do not necessarily translate into success in establishing a grassroots social tech. Our report details a mismatch between local environments and what may be considered social tech by wealthy, outside organizations that fund and make awards. For example, some technologies recognized by those outside sub-Saharan Africa as social techs actually serve only a small elite and do not contribute to widespread social development — we call these ‘bourgeois-apps’. It’s not always easy for an outside funder or evaluator to notice how niche a tech might be, and in fact ‘re-pats’ and expats are often the ones making these applications. Part of the reason for this mismatch between an idea and a successful social tech, as some of our interviewees explained, is that the ‘re-pats’ typically need long periods of adjustment and ‘re-learning’ in order to operate in local business environments; another is that ‘re-pats’ (though not all) tend to come from high-opportunity backgrounds that do not always leave them well-placed to develop social techs with ‘base of the pyramid’ benefits. Similarly, an excellent recent report by Village Capital, ‘Breaking the Pattern,’ details how implicit bias is driving capitalization toward local ‘re-pats’ and Western expats, causing investors to overlook talent born, raised, and educated in Africa, because ‘re-pats’ and their ideas are more likely to be ‘legible’ to them. As former hub-worker in East Africa put it, Africans from the diaspora are ‘automatically placed higher in the pecking order.’ A former regulator, also in East Africa, sees part of the solution to this issue in encouraging more local flows of investment; he told us: ‘investment in Africa needs to be decolonized.’
Returning diaspora contribute greatly to their countries of origin and have a valuable role as ‘bridge’ people, but support for these entrepreneurs should not be at the expense of great local teams, who tend to have less access to global capital flows.