By Gerald Maithya, General Manager, Microsoft Africa Transformation Office

Africa is often hailed as the birthplace of some of the world’s most exciting tech startups. From Cape to Cairo, small businesses across the continent have become catalysts for change, helping to drive economic prosperity and leaving their mark on local society. In fact, it’s predicted that Africa’s digital economy, fueled by hundreds of active tech hubs, could contribute nearly $180 billion to the region’s growth by the mid-decade.

Gerald Maithya, General Manager, Microsoft Africa Transformation Office –

Having produced several industry shakers in the fintech space, it’s perhaps not surprising that the continent has become a very attractive option for startup investment. According to BCG, the rate of growth in the number of African startups receiving financial backing between 2015 and 2022 was nearly six times faster than the global average. And during the first nine months of 2023 alone, these tech ventures raised around $1.4 billion.

With SMEs already accounting for up to 90 percent of businesses in Sub-Saharan Africa, much focus is placed on supporting this vital sector of the economy to reach the levels of success we’ve come to associate with Africa’s tenacious startup culture.

The question is – how do we empower the small business down the road to rise to the ranks of a Flutterwave in Nigeria or M-KOPA in Kenya?

The cloud effect

Much of the answer lies with providing these enterprises with the technology they need to drive operational efficiencies and scale their operations. Cloud technology, in the form of Microsoft Azure for example, has played an important part over the years in supporting Flutterwave’s core operations. Now as the company seeks to build on its success it is again looking to the expansion power of the cloud, building its next generation platform on Azure so that it can process high volume payments at scale, while also ensuring a seamless and secure payment experience for its clients.

Kenyan startup, M-KOPA, recently raised $250 million in debt equity. The company, which provides digital financial services to underbanked consumers, also relies heavily on the computing capacity of the cloud. In fact, its ability to process 500 payments per minute makes it possible for the startup to provide 3 million people across Africa with access to essential services such as solar power systems, digital loans, health insurance and smartphones.

Beyond fintech, small businesses are having a transformative impact on other key sectors such as healthcare. And as with Flutterwave and M-KOPA, many of these enterprises have something important in common – the backing of powerful technology.

In South Africa, Omnisient, is helping to elevate crucial decision-making across healthcare systems through a recent partnership with Altron HealthTech. The startup has created a platform that facilitates data collaboration across records and datasets and can securely match anonymised patient information in a safe environment for analysis. This allows Altron’s healthcare partners more insight into disease patterns and can improve treatments and medication efficacy. In the long term, Altron HealthTech hopes to use this information to support the healthcare industry in determining where new clinics, pharmacies and hospitals need to be built.

Another startup leaving its mark in the healthcare space, Zen Dawa, is helping to reimagine pharmaceutical operations across both rural and urban areas of East Africa by creating online access to pharmaceutical offerings as well as financing solutions for small businesses and pharmacy shops. By making use of Microsoft’s robust AI platform built on Azure, the startup is helping to contribute positively to the availability of essential medicines across East Africa.

There are still many questions to be answered, however, when it comes to drawing a larger number of the continent’s SMEs into the digital economy. Africa is still behind other regions in the world when it comes to digital infrastructure coverage, access, and quality. We are also still battling a shortage of skills and inadequate regulatory policy environments. In fact, with just 22 percent of the population online, Sub-Saharan Africa is still the world’s least connected region.

Supercharging Africa’s dynamic startup ecosystem

Addressing these issues will rely in no small part on the development of strategic alliances across both public and private sectors. These collaborations are pivotal to the development of comprehensive solutions to the multi-faceted challenges faced by small businesses in Africa. The FGN-ALAT digital Skillnovation Programme is a great example of this. A partnership between the Federal Government of Nigeria, Wema Bank, Get Funded Africa and Microsoft, the programme aims to train and equip one million micro, small and medium enterprises (MSMEs) across the country by the end of June 2024. Already 350, 000 MSMEs have been impacted.

Beyond skills, these businesses require business mentorship and access to market and finance opportunities – through effective collaboration the initiative aims to address all these needs in a holistic manner, facilitating opportunities, for example, to receive debt financing, equity investment and grants.

And by tapping into the distribution networks of multi-national corporations, the opportunity for strategic alliances to reach vast numbers of SMEs across the continent is significant. A recent partnership between Orange and Microsoft aims to accelerate the digitisation of small businesses in Africa by leveraging the telco’s formidable network to provide SMEs with access to Microsoft solutions such as Microsoft 365, Copilot, Azure, and Dynamics 365.

Similarly, the FAST Accelerator programme, which was launched together by Flapmax and Microsoft, helps startups scale rapidly and access new growth opportunities by bringing together cutting-edge technologies and business development strategies. Accelerators such as these with vast resources at their disposal are experiencing considerable success in helping startups like Zen Dawa to scale. In fact, with the support of the programme, the company now plans to dramatically extend the number of pharmacies it services from 520 to 10,000 by the end of the year.

The more Africa can produce successful collaborations such as these, the more we’ll start to see a greater number of small businesses emerge as powerful economic contributors. These strategic partnerships hold the key to unlocking immense potential across sectors, empowering entrepreneurial ventures to drive new digital solutions to long-standing challenges and creating a ripple effect that reverberates throughout the continent

Nigeria is eager to deepen its links with Sweden in order to grow its digital economy. Dr. Bosun Tijani, Nigeria’s Minister of Communications, Innovation, and Digital Economy, recently returned from a tour of Sweden.

The main meeting in Stockholm was with the Minister of International Development Cooperation and Foreign Trade, with additional meetings with the private sector.

Tijani stated that Nigeria’s position as Sub-Saharan Africa’s second largest trading partner influenced efforts to strengthen ICT ties.

The Nigerian minister stated that Sweden has the world’s second highest concentration of unicorns (after the United States) and a rich history of innovation.

“So, there is a lot of opportunity for collaboration and support for our initiatives in innovation, research, connectivity and digital technology as we work to accelerate the growth of Nigeria’s digital economy,” Tijani said.

The present administration of president Bola Tinubu, which has been in power since 2023, has developed a strategic plan outlining a vision for Nigeria that leverages the transformative power of digital technology and innovation to diversify its economy.

Mrs. Jane Egerton-Idehen, managing director, Nigerian Satellite Communications Limited (NIGCOMSAT), has said that the time has come to unlock Nigeria’s true potential, by embracing digital transformation and fostering a culture of innovation as a way to further enhance other sectors like Financial and Insurance (Financial Institutions); Trade; Agriculture (Crop production); Manufacturing (Food, Beverage & Tobacco); Construction; and Real Estate, among others.

She said that over-reliance on the oil sector has created a vulnerable economy in Nigeria.

Egerton-Idehen said this in Nsukka on Saturday while delivering the 20th Herbert Macaulay Memorial Lecture themed, “Harnessing Practical Engineering Solutions for Sustainable Economic Development” held at the Princess Alexandra Auditorium Hall, University of Nigeria Nsukka (UNN).

Egerton-Idehen who spoke on the topic “Championing Innovation: Digital Transformation and Economic Diversification in Nigeria,” said that Nigeria has heavily relied on oil production for many years which has not augured well for the country’s economy.

She said that digital transformation is the process of using digital technologies like Robotics, Mobile Internet, Artificial Internet, to radically transform existing traditional and non-digital business processes and services.

According to her “The largest contributor to the nation’s GDP post-1970s was crude oil.  With the oil boom in 1973-74,  it was in the double digits at its highest; it was 40% of GDP until  post-2010 when sectors like Agriculture and ICT started to redistribute that balance.

“Currently, oil contribution to GDP has returned to a single digit — pre-1970 figures, it sits at 6% of GDP today. The oil sector still provides for 95% of Nigeria’s foreign exchange earnings and 80% of its budgetary revenues.

“Nigeria, as we know, is a nation brimming with talent and potential, stands at a crossroads. While blessed with abundant natural resources, particularly oil, our economy remained heavily reliant on a single sector for over five decades.

“The price per barrel of oil needed for Nigeria to balance our budgets is– $139, Saudi Arabia $83.8, and UAE $67 (Kullab & Abdul-Zahra, 2020). Current global conditions make this untenable. Oil prices have crashed due to the COVID-19 pandemic, among other reasons (Alia Alzubair, 2021),” she said.

NIGCOMSAT Boss said further that the vulnerability to fluctuating oil prices exposes Nigeria to external shocks and hinders sustainable growth.

“There are many ways we can frame our road to diversification and non-dependence in the oil sector.

“With our experience with ICT, we can safely assume we could reform, and impact various sectors driving economic growth through digital transformation.

“This could be done by addressing the challenges and harnessing the opportunities, Nigeria can leverage digital transformation as a powerful tool for economic diversification, job creation, and shared prosperity.

In a remark, Prof Charles Igwe, vice-chancellor of UNN said that was one of the first Nigerian nationalists and his opposition to many colonial policies paved the way for the Independence of Nigeria

“Together with Nnamdi Azikiwe he co-founded the National Council of Nigeria and the Cameroon (NCNC) and became its president.

The VC noted that the Faculty of Engineering initiated the biennial lecture series in order to achieve the following goals; Highlight the faces of a man who has been described as the father of Nigerian Nationalism, Encourage present da engineers, surveyors, architects, and other professional to learn from his professional lifestyles and make every effort to leave good footprints on the sand of time.

Other targets of the HMML series are; To map out strategies and mobilize resources to improve the teaching, learning, and research environment within the Faculty of Engineering and the university at large,, and to identify major National issues of engineering importance, and through the learned discourse proffer engineering solutions to them.

“The theme of this HMML, ‘ Harnessing Practical Engineering Solutions doe Sustainable Economic Development’ is very apt for Nigeria and the world over where sustainability is the current jingle for every developmental solution, and I am happy that very distinguished professionals have gathered here for the discourse,” he said.

Igwe challenged the Dean of the Faculty of Engineering and other staff of the faculty to proffer immediate solutions to the energy crisis in the University and its environs.

Also in a remark, Prof. Emenike Ejiogu, dean, Faculty of Engineering, UNN said that the HMML series is one of the longest-running academic lecture series in any Nigeria university, noting that the faculty had instituted the lecture series in honour of Herbert Heelas Macaulay.

“The Faculty of Engineering Board resolved on October 5, 1978, to establish a Memorial Lecture series to be known as HMML, to honour Macaulay; the father of Nigerian nationalism, who trained and practiced as an engineer, architect, and surveyor.

“The first lecture was held in 1980 and has since continued every two years with many distinguished lecturers doing justice to the selected theme that the faculty board carefully selected according to the needs of time.

“This year’s (20th edition) HMML lecturer, Mrs. Egerton-Idehen is the first ever female to feature as an HMML lecturer, and she has chosen a very timely and appealing title for her lecture,” he said.

Ejiogu, who is also director, Africa Centre of Excellence for Sustainable Power and Energy Development (ACE-SPED) UNN, commended Prof. Igwe, UNN- VC and his management team for their support and encouragement in all the endeavours of the faculty.

He also commended other lead paper presenters, relevant stakeholders and the general public who attended and contributed the the success of the 20th HMML.

The occasion was chaired by Prof. Paul Eke, a professor of Digital Technology and System Engineering, Royal Academy of Engineering, University of Leeds, United Kingdom.

The highlights of the 20th HMML include; Gown Meets Town, a Technical Exhibition of practical projects of staff and students of the faculty of Engineering and interested private and public sector companies and organizations, with products and services relevant to sustainable economic growth, Technical Symposium and Panel Discussion, Alumni Homecoming Events, Unveiling and Handover of Agbebi Alumni Class of ’85 Building, among others.