It is estimated that by 2050, Africa’s population would have reached almost 2.5 billion. Within the continent’s many countries, the majority of these populations are likely to be concentrated within the business-friendly urban centres – cities.
As Africa enters a technology revolution, particularly within services, the pace of urbanisation will only increase, and the ever-pressing issue of mobility in Africa will increase with it.
With more people comes more road users and a greater need for speedy and efficient means of transportation. And with them comes consumerism and the need for more FMCG goods, to serve their needs, but getting these products to the cities is just as difficult as navigating around them.
Africa is estimated to now be home to 8 of the 15 fastest-growing economies in the world. However, poor infrastructure is one of the biggest barriers to economic growth, and many of those barriers exist at the basic level of adequate roads and ports. In 2014, only a quarter of African road network was paved, and in 2020, poor roads, rail and port facilities continue to delay the social and economic transformation of African societies.
The urban centres have not enjoyed enough infrastructural upgrades to accommodate the influx of people and their need for goods. Some foreign and home-grown tech solutions in the form of ride-hailing, car-sharing, and vehicles-on-demand came to address these very big problems. They are infiltrating the mobility sector, spurring its evolution and addressing the needs that arise as a consequence of rapid urbanisation.
Although Uber dominates the global ride-hailing market since it entered the continent in 2013, the latter half of the previous decade saw the rise of home-grown car-sharing start-ups such as Jekalo and Gozem, making car ownership and cars per capita in Africa amongst the lowest in the world.
However, it was not long before Estonia-based Bolt (formerly Taxify) took the lead in Africa’s ride-hailing market. Its rebranding in 2019 came as a means of signalling their broader focus on covering transport beyond car-sharing.
Where congested roads are the reality in the majority of urban centres, Bolt quickly pivoted to include bike-hailing as part of its offering, firstly in East Africa – a strategic investment to achieve its goal of dominating the African market by entering an additionally prolific means of transportation.
However, it is not the only one to move beyond cars in the transport sector. Lagos witnessed the two-week trial of UberBOAT in October 2019, and while not much more has been seen on this front, there is no doubt that the competition for ride-hailing in Africa is far from over.
Like Bolt, many companies have chosen to combine long-standing transport solutions with tech, with a rise in start-ups focused on Africa’s ride-sharing on two wheels. Max and Gokada are just two mobility challengers within the bike-hailing market, and there are likely to be more to come.
Investors have recognised that having more cars on already poor roads proves a less efficient means of improving transport and have poured funds into navigating city traffic by bike. Yet, regulatory issues have arisen at the same pace as these start-ups, affecting the impact of these solutions.
Notable examples include the ban on motorcycles in Addis Ababa announced in July 2019 by the city Mayor, Takele Uma, citing concerns around the involvement of these vehicles in violent crimes, as well as, Lagos state government’s ban on the activities of commercial motorcycle, effective from February 1st 2020, which will have a significant impact on these start-ups, their contractors who rely on their vehicles and riders as their primary source of income, and of course, commuters.
These solutions have also been leveraged to improve logistics and provide urban populations and businesses with the goods and services required to help their economies function and grow. Companies such as Kobo360 and Lori Systems, winners of the Apps Africa Best Enterprise Solution 2018 and the Apps Africa Best Mobility Solution Award 2019 respectively are providing solutions to inefficient supply chain systems in order for Agriculture and e-Commerce businesses to scale. Both Lori Systems and Kobo360 have expanded across the continent at breakneck speed.
Speaking with Kagure Wamunyu, CEO, African Region at Kobo360, ahead of the Africa Tech Summit, she says, “Using technology, we are providing an efficient solution for all the key elements in the supply chain, while ensuring reliability, transparency and cost savings.”
Swvl, Kobo360 and Lori Systems collectively raised $102 million in 2019, hardly an insignificant number, even if it isn’t fintech. And with the news of East African logistics company, Sendy raising $20 million, 2020 will undoubtedly be another big year for logistics. Where people are looking to inject speed in congested cities, and efficiency into supply chains that are disjointed and opaque, start-ups are providing solutions that help businesses beyond themselves.
Progress in the mobility sector will not only improve transport but access to goods, services, education, employment and overall economic growth. We can expect to see more investment – in terms of infrastructure and technology – into the mobility space, because Africa and Africans, need to move. At scale.
According to McKinsey, the future of eCommerce is huge with the market predicted to be worth $75 billion by 2025. These predictions are contingent on a number of other supporting factors, one being improvements in mobility and delivery infrastructure, resulting in a blurring of boundaries between logistics, mobility and e-commerce.
With the implementation of AfCFTA and the lowering of many customs barriers in Africa on the horizon, we can also expect more demand within the mobility sector. This almost guarantees that there will be more challengers arriving on the tech scene, while many of the current players expand into new cities and countries. These solutions are not only more efficient but greener, safer and more sustainable, and governments will have to take more action in providing the physical and legal infrastructure to support and regulate these innovators.