Meet Africa's off-grid entrepreneurs

Solar power, mobile money, even drones - Africa's entrepreneurs don't lack creative ways to circumvent patchy infrastructure. But without proper investment even the best bootstrapping can only go so far.

by Rachel Savage
Last Updated: 12 Jul 2016

In Kangemi, a slum in the fast-growing Kenyan capital Nairobi, Margaret Aoko, expounds the virtues of her new solar power system. 'At night the lights light up my produce so people can see it from afar,' the 49-year-old mother of six says, as she sells tomatoes, leafy greens and secondhand blankets to passers-by on the rutted dirt street.

That is no small thing. Before acquiring the system from Kenyan company M-KOPA with a 3,500-shilling (£24) deposit a few months ago, Aoko would close her stall at 7pm, having made about 1,000 shillings that day. Now by staying open for just three more hours at night, she can take home as much as 3,000. That's more than enough to cover the 100-200 shillings she sends via mobile money each day to pay off M-KOPA ('kopa' means 'to borrow' in Swahili).

A single LED lightbulb, powered by M-KOPA solar technology, illuminates a book for people in Ndela village, Machakos, Kenya 

An hour's drive south of Rwanda's capital Kigali, the inhabitants of the hillside village of Rurama tell similar stories. There's the shopkeeper who can cover the cost of his gadgets and then some by charging mobiles for 100 francs (9p) a pop, the bicycle repairman who can now work at night. The pay-as-you-go solar power start-ups mushrooming across East Africa clearly don't want for satisfied customers to show off to journalists.

M-KOPA, which claims to have more than 50% of the market in the region, expects to double in size by 2018. Mobisol, the German outfit that supplied Rurama, is planning to grow from 45,000 to 100,000 households across Tanzania, Rwanda and Kenya by the end of the year. The boom is being hailed as a classic example of African 'leapfrogging', skipping the need for infrastructure - a reliable mains electricity grid in this case - in the same way that mobiles obviated the need to lay landlines, and mobile money has circumvented banks. But just as the 'Africa Rising' narrative has been skewered by the commodities crash, will leapfrogging prove to be just another cliche bandied about by westerners overkeen to label a whole continent?

You can't talk about off-grid innovation in Africa without mentioning M-Pesa ('pesa' means 'money' in Swahili). The ubiquitous mobile money service from Safaricom, Vodafone's Kenya subsidiary, has spawned plenty of hyperbole, as well as copycats. M-Pesa is big business in Kenya: in 2014, 58% of adults had an active mobile money account, the vast majority with Safaricom. Some $50m flows through it ever day.

But M-Pesa is old news - it was launched back in 2007 after all. 'I wouldn't go trumpeting M-Pesa all over the place, because it's so much part of our day-to-day life,' says Josiah Mugambi, the executive director of Nairobi's iHub, a tech community, co-working space and incubator. (M-Pesa is so everyday that I used it to bail out my boyfriend at immigration, when he forgot cash for his visa on arrival in Kenya.)

Safaricom, now East Africa's largest company, has been slow to allow M-Pesa to be leveraged by others - it only opened up its platform in September 2015. Still, M-Pesa and its imitators have facilitated other innovations. In Kenya alone, Safaricom's M-Shwari loans service has 3.9 million customers and sports betting on phones is booming, not to mention M-KOPA. But some in the local tech scene want nothing more than to move on. 'The more we talk about M-Pesa and feature phones, the more it holds back African innovation,' argues Mbwana Alliy, the managing partner of Savannah Fund, an early-stage pan-African investment firm. 'In Silicon Valley do you see a poster of Bill Gates holding up a floppy disk?'

Kenyans transfer money using M-Pesa banking at a store in Nairobi 

For Alliy, smartphones are the future. He wants to talk about the continent's first 'unicorn', Africa Internet Group, which adapts models found elsewhere rather than 'leapfrogging': for example, Jumia, an Amazon-alike, active in eight countries; Hellofood, a restaurant delivery service; and Easy Taxi, an Uber-wannabe. Or Sendy, a Kenyan upstart described as 'Uber for packages not people'. But all the bottom-up innovations in the world can't fix some pretty fundamental issues - they only get around them.

For example, the stratospheric growth in East Asia has been driven by low-cost manufacturing of everything from car parts to smartphones. But since the 1950s, sub-Saharan Africa's share of world exports has slowly fallen further below 5%. Manufacturing's contribution to Africa's economy actually fell, from 12% in 1980 to 11% in 2013 and the paucity of traditional infrastructure is a big part of the reason why. Sub-Saharan Africa has 13% of the world's population, but 48% of those without electricity, according to McKinsey. And while M-KOPA and its competitors can light up the rural poor, they can't produce the power needed to fuel factories.

Rubbish infrastructure is also a major contributor to low levels of intra-regional trade, as well as a massive brake on agricultural productivity: as much as half of produce rots in the field or on the way to market because warehouses are lacking and roads are a mess of potholes.

Another crop of off-grid entrepreneurs thinks they can get around this by using drones. Jonathan Ledgard, a novelist and former Africa editor at The Economist imagines unmanned craft shepherding loads of up to 10kg between urban areas that are currently badly connected, taking off and landing from 'droneports'. Pie-in-the-sky, one might think. But Rwanda's government has said it's on board and Ledgard, whose firm Red Line was recently spun out of Swiss university EFPL, hopes to start testing his craft in-country by the end of 2016. A more specific use for the technology is envisioned by Zipline, which will start testing drones designed to ferry blood for health emergencies in Rwanda in August.

'In remote areas, or areas that are hard to reach, there could be a use-case [for drones],' says Mugambi. 'But the question is whether that's a shortor a long-term plan. Because once infrastructure gets developed - and I think both Tanzania, Kenya, Rwanda are really pushing the infrastructure agenda very aggressively - at some point it might become a technology that is no longer as useful.'

Proponents of drones, on the other hand, argue that roads are so expensive to build and maintain that there will be plenty for unmanned craft to do for years to come. They don't, however, deny that Africa needs a decent road network - just as M-KOPA and their ilk admit it needs functioning electricity grids. Innovation can help the continent bootstrap its way around some longstanding bottlenecks, and even get ahead of developed countries that still rely on 20th century landline and power networks. But long-term sustainable growth also requires a dose of good old-fashioned industrialisation.



With more than 350,000 households, M-KOPA is by far the brightest star in a growing firmament of pay-as-you-go solar energy start-ups. For a deposit of $35, customers get an 8 watt system with three lights, a radio and the ability to charge mobiles, with which they pay off the equivalent of 50 US cents a day for a year.

When Jesse Moore and ex-M-Pesa exec Nick Hughes quit their jobs in 2010, they wanted to tap into mobile money to create a company to, as CEO Moore says, 'on the one hand vastly improve people's lives, and on the other hand create a scalable and profitable business.' With banker Chad Larson on board too, they realised they could undercut what the millions of Kenyans not connected to the grid spent on kerosene.

Although 75% of its customers are in Kenya, it has expanded to Tanzania and Uganda and licensed its technology in Ghana. And, half of the 100,000 households that have paid off their first loan have upgraded to stoves, smartphones and TVs.


'We literally look like Uber, but we're moving packages instead of people,' says COO Malaika Judd. Sendy was founded by Meshack Alloys and two colleagues, after they developed a package-tracking system for a bus company and realised there was demand for 'last mile' delivery. Alloys saw a need for bodas (motorcycle taxis) to be vetted too.

Since April 2014, it has facilitated 30,000 deliveries, and the 60 drivers on its platform are doing more than 200 a day. Companies such as law firms, restaurants and ecommerce make up 75% of its business. The Nairobi start-up is expanding to Kisumu and Mombasa, where it hopes to deliver packages carried by buses across the country to their final destination.

Photo credits: Alamy (main picture), Getty Images


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