ICT Africa Main News

Digital Local Content in Africa is all the Rage but Platforms Remain Global

14 January, 2014

Source: ICT Africa

 
Kihara Kimachia

Introduction
Over the last decade policy makers, educational institutions and private firms across the African continent have placed great emphasis on the development of local digital content. Following the massive uptake of voice services, telecommunications providers began looking to data as a means of capturing more sales. Data services could not take off without a corresponding increase in local digital content.

Local content comprises information, music and images developed by people and organizations that are native to an area. The strategies that were put in place to increase local content have been very successful. One of the most successful strategies has been the development of local mobile application stores where users can download ringtones, music, wallpaper and view other types of digital content. There has also been an explosion of local blogs and websites that have proved hugely popular with locals.
The success of the local content strategy is evident in The Web Index 2013 Report conducted by the World Wide Web Foundation. Amongst emerging market countries, South Africa achieved an overall fourth place among countries with rich local content online. Amongst developing countries, Kenya, Morocco and Ghana were ranked third, fourth and fifth respectively.
Clearly, local digital content is proving to be a major success on the continent. The only downside is that while local content grows, the platforms are mainly foreign. A quick examination of some of the content platforms reveals that the owner's or majority owners are not native to Africa. The following are only a few typical examples.

Ecommerce
Though there are many successful locally owned ecommerce companies such as South Africa's Bid or Buy, the ecommerce space is currently dominated by foreign players. For example, Germany's Rocket Internet own Jumia, one of the largest ecommerce websites operating in Nigeria, Kenya, Ivory Coast, Egypt and Morocco. They also own Zando of South Africa, an up and coming ecommerce clothing store. Many Groupon clones are also owned by US & European companies; for example, Kenya's Rupu is owned by Ringier of Switzerland

Mobile Money
Kenya's Safaricom pioneered mobile money in the world. However, the company does not own the hugely popular M-Pesa service. The platform is owned by UK's Vodafone PLC., which also has a 40% stake in Safaricom. Safaricom pays a hefty license fee to use the service. The story is replicated across much of Africa, where the majority of other mobile money services are owned by foreign network operators such as Orange, Essar and Airtel.

Social Media
Lastly, we all know that Facebook has millions of users across Africa as does Google, YouTube, Twitter and LinkedIn. But, obviously these platforms are not owned by Africans even though they generate lots of local content.
The real question at the end of the day is whether this is good or bad for Africa. The fact is, market forces determine business success. It just so happens that despite the massive surge in local digital content on the content, the majority of platforms that enjoy the highest traffic and usage are owned by International companies. There is also a major interest in the African telecommunications sector from foreign players such as Rocket Internet who are well known for their policy of creating companies that behave like 'operational ants' to replicate proven success in other markets.

What African policy makers should do is carry out public education and awareness campaigns to get the general public more involved in the local telecommunication sector. Local African investors are more interested in traditional industries. Spurring interest in emerging telecoms could mobilize the capital needed to ensure local ownership of content platforms. Indeed, the future of local digital content platforms in Africa is promising; there are many untapped opportunities.


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