The following tools have been chosen based on their versatility in enabling a wide variety of applications across regions and industries.
As any economy goes through different stages of growth (refer to Rostow’s Stages of Growth) certain industries will be more important than others in enabling the most social and economic development. The following industries have been chosen due to their importance in enabling the the region to achieve.
Based on the constraint mapping of the system under analysis, we can create a toolkit of technologies available at our disposal. Network speed, mobile device density, API access and much more all shape the tools we have at our disposal.
After the dynamics of the market have been mapped and a toolbox of available technologies identified, we can move on to conducting market research and isolating potential business models. The Adjacent Possible provides our north star.
After a business model and solution approach has been identified we then facilitate access, if needed, to key networks in developed markets for the exchange of knowledge services, technology solutions and mentorship.
Our Approach to Region selection:
A variety of factors are converging to expose the SEA Region (Kenya, Tanzania, Ethiopia, Uganda and Rwanda) to tremendous growth opportunities in the decades to come.
Law, policy, governance and public transparency have continued to evolve towards enabling a modern economy. In most regions of East Africa taxation powers have been devolved from central governments, regional political relationships have developed inter-regional cooperation has progressed.
East Africa comprises of some of Africa’s most buoyant economies. E&Y, in its 2017 report, Connectivity Redefined, predicts that Kenya, Tanzania, Uganda and Ethiopia will all grow at an annual rate of more than 6% for the next 10 years. FDI into these hub economies is also predicted to climb with China and Britain leading the charge.
Eastern Africa had an estimated population of 260 million in 2000. According to the UN, this is projected to reach 890 million by 2050, with an average growth rate of 2.5% per annum. By 2035 alone, East Africa is set to have one of the largest working-age populations anywhere in the world — larger than China or India.
Mobile technology has had a truly transformative social and economic effect on people’s lives across Africa. The first revolution enabled by the mobile phone was a communications revolution. As the next half a billion Africans join the internet we will witness the start of a second revolution, the data revolution.
Kenya has and continues to play a pivotal role for the development of the broader East African region. Challenges such as poverty, inequality, governance, climate change, low investment and low firm productivity will be major hurdles for Kenya and the broader region for the years to come. Its growing youthful population, dynamic private sector, skilled workforce, improved infrastructure development, political reforms, and strategic geography offer much reason for a positive outlook.
Dar es Salaam & Mwanza
Tanzanian Growth is projected to remain robust at 6.9% in 2019, representing one of the best performances in East Africa. This being said, uncertainty in the business environment paired with stalling private-sector credit growth, could hinder private-sector investment. That being said, the government has made efforts to reduce inefficient spending, including the reduction of public-sector payroll as well as increased development spending. The government has also taken steps to improve tax revenue by driving out corruption and taking on tax evasion.
With approximately 102 million people as of 2016, Ethiopia is the second most populous nation in Africa after Nigeria, and one of its fastest growing economies. Ethiopia’s location gives it strategic dominance as a jumping off point in the Horn of Africa, close to the Middle East and it’s markets. Sustaining economic growth will require increasing competitiveness through further development of the private sector. The government has taken steps to expand the role of the private sector through foreign investment and the development of industrial parks. Ethiopia’s government aims to have the country reach lower-middle-income status by 2025.
Future growth in Uganda is expected to be driven mainly by public infrastructure investment; recovery in manufacturing and construction; and improvements in the services sector, particularly financial and banking, trade, transport, and information and communication technology services. Major tailwinds for the 2018 economic outlook include increased agricultural production due to better weather conditions; higher foreign direct investment (FDI). Major risks include low commodity prices, appreciation of the U.S. dollar, tightening of global financing conditions that could discourage FDI and adverse environmental shocks.
Agriculture remains an important contributor to growth; industry’s contribution is expected to increase along with developments in industrialization efforts. Three factors are likely to influence the economic outlook. First, the recovery in commodity prices and global demand is expected to increase export revenues and contribute to a buildup in official reserves. Second, ongoing investment in fertilizer, improved seeds, and irrigation, as well as higher prices for coffee and tea, are expected to boost food and export crops. Third, the Made in Rwanda campaign and public infrastructure investment are projected to boost growth in industry.
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SEA is an L3C that builds industry-specific social enterprise accelerators to scale the impact of innovative market-based solutions and generate deal flow for impact-oriented investors.
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