“A wave of foreign-owned start-ups is driving an African tech revolution and prompting fears of digital recolonisation.”
These were the opening words of an article that appeared in the Financial Times Weekend. It highlighted a phenomenon of foreign tech companies that are dressed in African robes to attract investment directed to African tech startups.
The author argues that this development has raised concern among African tech leaders that local tech start-ups are missing out on funding opportunities to foreign-owned tech start-ups. The author highlights the so-called first African unicorn Jumia, as a case in point, since this company has foreign ownership and executives.
While this is a challenge that is worthy of attention, is it really a form of recolonisation of the continent? To some extent, it is. However, the continent has a far bigger challenge of recolonisation that is brought about by technology in the form of global tech companies that operate in Africa.
To understand this you have to look at the following scenarios. The first scenario relates to the recolonisation of Africa’s transport systems by Uber. On December 29, 2017, ahead of New Year, Uber released the following statement:
“People around the world will rely on Uber to get to and from their New Year’s Eve festivities so they don’t need to get behind the wheel. Even on one of our busiest nights of the year, anyone, anywhere should be able to push a button and get a ride within minutes.
“Given we’re expecting millions of rides to occur on just this one night, fares will likely be higher than usual. We expect demand to be highest from midnight to 3am local time. With upfront fares, there are no surprises. We show you the price before you request your ride so you know how much you’ll pay. And when fares are much higher, you’ll be asked to confirm the higher fare before request.”
Users of Uber will know this as surge pricing, which gets activated whenever there’s high demand at a specific area.
Basically, Uber charges higher prices whenever there’s high demand in a specific area. Uber once activated surge price during a time of crisis in Sydney, Australia.
Due to a hostage crisis, there was a gridlock, which led to high demand for more transport.
What this illustrates is that Uber, a company based in California, US, can influence prices anywhere, including within the continent, without even consulting with local transport authorities whenever it feels the need.
Uber can choose to make transport either disappear or available. The local national transport department would have no control over the transport provisions.
This is just one example that a global tech company can usurp power from local powers whilst at the same time providing services that are considered to be adding value to society.
Another example is the imminent cryptocurrency, Libra, backed by Facebook and other powerful technology companies. If the Libra becomes a reality, it could disrupt financial systems, especially in the African continent. Emerging countries are the main target of the planned cryptocurrency by Facebook and partners.
If people suddenly decide to use the Facebook-backed cryptocurrency for transactions online, what will this mean for African currencies online?
These two scenarios illustrate a picture that could emerge if Africa adopts foreign-owned technology fully in the name of progress.
Slowly the continent will be ceding control to foreign tech companies to regulate prices and many other key activities that were traditionally the domain of governments.
In the short run what everyone will see is progress and modernisation, but in the long run it’s a loss of power.
In the absence of technology platforms and systems within Africa, it makes sense to adopt already existing technology to modernise the continent. This, however, should be implemented in parallel with the development of local technology platforms and systems to replace in the long run platforms and systems that are adopted from elsewhere.
In addition to the implementation of foreign owned platforms regulatory systems have to be strong to prevent abuse.
Ideally as Africa adopts these technologies there should be arrangements in place to ensure that local tech start-ups develop similar technologies to ensure local control and presence. This is important to avoid a situation of dependency that may arise in the future.
As Africa embraces concepts such as smart cities and 5G, one of the most important assets to protect is local data. Local leaders should do everything in their power not to give away the African data.
Failure to protect data will lead to a situation where African behaviour patterns such as buying, traffic patterns and others will be controlled by foreign elements to the detriment of local businesses and institutions.
There’s little that can be done to prevent the current wave of foreign-owned start-ups driving the African technology revolution.
Entities such as Jumia add value to local eco-systems and they also have some form of local ownership (eg MTN is a shareholder in Jumia).
Local regulators should ensure that the ownership of e-commerce data emanating from companies such as Jumia resides within the continent and it’s regulated locally.
The risk of the African continent being re-colonised is real and requires serious attention by entities such as the African Union.
There’s now a need for a continental body to be set up to safeguard the sovereignty of the continent from surveillance capitalists and new colonisers enabled by technology.
Wesley Diphoko is the editor-in-chief of The Infonomist. He also serves as the chairperson of the IEEE Open Data Initiative. @WesleyDiphoko
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