Apple makes huge new investments in Africa

Written by By Medea Benjamin, CNN You can add Apple to the list of companies making big investments in African digital technology. Apple announced last week it had formed a strategic alliance with Kenyan…

Apple makes huge new investments in Africa

Written by By Medea Benjamin, CNN

You can add Apple to the list of companies making big investments in African digital technology.

Apple announced last week it had formed a strategic alliance with Kenyan telecommunications firm Safaricom, founding owner of M-Pesa. The partnership will increase its investment in African startups to an additional $500 million.

Apple will provide free, cloud services to Kenyan startups, while Safaricom will host Apple’s tech and applications store in Kenya. The move is part of Apple’s $1 billion investment and a partnership with the African Development Bank to help create 1 million jobs across the continent.

“This is the largest investment that has ever been made in Africa as far as supporting startups is concerned,” said Cyril Ramaphosa, president of the African Development Bank, to CNN. The AU bank has invested a total of $1.2 billion in ventures on the continent.

“This is the first time that an outlay that large has been made and by companies of the stature of Apple and Google,” Ramaphosa added.

‘Vital role’ for Africa

Justin Danhof, the senior director of the Heritage Foundation’s Center for Trade and Investment, told CNN the new investment in African tech can help build “regional ecosystems.”

“So you have people putting together investor conferences — such as the TechCrunch Africa conference, which is taking place in Johannesburg later this month — the idea being that you have people in the tech space on the ground in Africa, but you also have links back with Silicon Valley, and those people are coming back and talking to investors,” he said.

“The role of the US and other investors is to bring more people on board, saying ‘You’re doing all these things, but what else can you do for us that will help add value to what we’re doing?’”

Danhof says there is a big opportunity in helping African startups.

“I think that there’s a big opportunity to help African startups that have already started but also to help African startups who are starting and might be considered immature,” he said.

“Some of them have actually grown to a scale that some larger US or European companies might find attractive — but they just haven’t been encouraged or given advice or money by larger, larger companies.”

‘We love to disrupt’

Ramaphosa agrees, adding “You can’t take the US as one model; you have to use what you think is fit for Africa, what works in your country, and that’s what we’re trying to do.”

Danhof points out that Africa has many initiatives that help build tech startups, but smaller efforts can often fall through the cracks.

“A lot of initiatives exist — we have plans, we have Y-Combinator coming to Ghana, for example, later this month,” he said. “But in some cases, even if they were appropriate or good — whether it’s in terms of the technology, the venture capital, the international investment — the money just can’t get there.”

“What we’re seeing is an increase in that gap, and that’s something that needs to be attended to.”

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‘A massive blow’ to German diplomacy

At a trade and investment conference this year in Berlin, a group of investors, entrepreneurs and government officials pledged $3 billion to invest in African tech companies.

Carlos Moneo, global managing director of venture firm Lakestar, was in Berlin this week to discuss how money can be used to help African tech companies thrive. He says that the total package of global investments currently invested in African tech companies is a bit under $500 million.

Lakestar is an African-based company that brings together investors and start-ups in the tech and financial sectors. It has partnered with the tech hub, African Digital Fund, as well as five multinational companies — Volkswagen, Unilever, MetLife, Delta Airlines and Bank of America — to work together.

Moneo says that he was “very surprised and impressed” by Apple’s partnership with Africa. He says it’s an example of “a company taking a massive step into this market.”

“It’s a very bold step — not just by Apple, but by any investor,” he said. “They were all acutely aware that how important this is to us — and it should be a massive blow to German diplomacy.”

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