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Regulatory Sandboxes in Africa

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Regulatory Sandboxes in Africa

By: Leah Ngari

In a rapidly evolving world, regulatory bodies often have trouble keeping up with the pace of business and technology innovation – especially when it comes to fintech. To allow for innovation while protecting potential customers, governments across the globe – and across Africa – have designed “regulatory sandboxes.” Read on to learn more about regulatory sandboxes and find out about the regulatory sandbox program in seven African countries. 

What is a Regulatory Sandbox?

The financial products and services sector is highly regulated almost everywhere in the world, because governments want to make sure that their citizens’ money is safe and protected. But although financial regulation is critical to protecting customers, it can also hamper innovation by raising the barriers to entry into the sector so high that they keep new players out. 

A regulatory sandbox is a controlled environment that allows entrepreneurs, regulators, and other players in the fintech industry to test out new financial products or services without being too constrained by inappropriate regulations. Since its inception in the United Kingdom, the regulatory sandbox has spread all over the world, with Asia and the Pacific regions taking the lead.

Number of Sandboxes by Worldbank Regions

Number of Sandboxes by Worldbank Regions. Image from the Worldbank Group

Why are Regulatory Sandboxes Important? 

The Worldbank Group has identified key areas that regulatory sandboxes can assist in:

  1. Facilitate partnerships between fintech startups and already existing traditional financial companies. For instance, regulatory sandboxes enable the banking sector to find ways to incorporate blockchain technologies into their model without breaking rules that should not necessarily apply in this instance.  
  2. Encourage innovation by creating a platform for firms to be innovative in the fintech world without cumbersome regulations stifling their creativity. 
  3. Inform regulators and keep them up to date on innovative solutions and technologies. Regulatory sandboxes increase interaction between regulators and innovative firms while enabling the regulators to make form informed choices, creating more inclusive regulation. Regulatory sandboxes provide an evidence-based approach to regulation.
  4. Protect consumer rights in a fast-changing world. Consumers’ rights remain protected in a regulatory sandbox framework, since regulators keep a watchful eye on the process, conducting rigorous testing to ensure that products launched into the market are consumer-friendly and beneficial.
  5. Enable market growth by facilitating the introduction of new solutions. With rigorous testing, fintech firms get to identify and develop new opportunities, new market segments to sell a product or service to.

African Countries with Regulatory Sandboxes


1. Sierra Leone

Sierra Leone’s Sandbox Regulatory Framework was launched in 2018. The process was started by the Bank of Sierra Leone with the help of the Financial Sector Deepening Africa (FSDA) and the United Nations Capital Development Fund (UNCDF), as part of the country’s Fintech Initiative. To be eligible to participate in Sierra Leone’s regulatory sandbox, the company must be registered with Sierra Leone, and a Sierra Leonean citizen needs to own at least 10% of the firm. The regulatory sandbox is limited to fintech companies, and has a focus on financial inclusion in the solutions they admit into the program.

2. Kenya

Kenya’s regulatory sandbox is under the Capital Markets Authority of Kenya (CMA). It was approved in March 2019 when the CMA started to accept applications for admissions into the regulatory sandbox. Interested companies or individuals are expected to apply to be considered, following a list of requirements outlined in the Regulatory Sandbox Policy Guidance Note. The document outlines the steps needed to apply for the regulatory sandboxes and the eligibility criteria used. For instance, it is only open for companies incorporated in Kenya or those licensed by as securities market regulator in an equivalent jurisdiction

Once admitted, the company gets a 12-month period to run tests on the product or service, sending interim reports on the progress to the CMA. After the 12-month period, the company may either be granted permission to operate fully in the market or be denied permission based on the findings from their testing period. Before applying for the sandbox, the companies will need to have developed the idea to the level of operational testing according to the former CMA Chief Executive, Mr. Paul Muthaura. The CMA is currently accepting applications to the regulatory sandbox. Currently, at least 4 fintech companies that were admitted into the regulatory sandbox of Kenya.

3. Rwanda

Rwanda’s government initiative to promote digital financial services led to its adoption of the regulatory sandbox in 2018. Since then, it has embarked on creating guidelines for the regulatory sandbox under the Rwanda Utilities Regulatory Authority (RURA), which are still at the draft stage. The first company to be granted the regulatory sandbox license was the Riha Payment System, a firm that received 6-month approval to test its mobile wallet solution in the Rwandan market.

A company or individual that wishes to apply for this regulatory sandbox needs to have a ground-breaking innovation which is new, or products or services significantly different from products which comply with all relevant regulatory requirements

Rwanda is also clear on the kind of products or services that would be allowed under these regulations, as the product or service has to be new to the Rwandan market and commercially unavailable in other markets. Academics and researchers who want to test out new technologies may also apply for the regulatory sandbox according to the draft guidelines.

4. Mauritius

In Mauritius, companies apply for a Regulatory Sandbox License, giving them permission to conduct business where there is no legal framework guiding the activities to be conducted. This License is provided by the Economic Development Board to eligible companies that are willing to invest in innovative projects. Mauritius permits both fin-tech and non-fintech companies to apply for the licenses, providing guidelines for each category. Fintech projects are chosen by the National Regulatory Sandbox Committee, which consists of members of the EDB and the Financial Services Commission (FSC). Licenses in non-fintech are issued by the Board of Investment under the EDB.

Mauritius provides a great example of the impact of regulatory sandboxes on regulators in the area of Peer to Peer (P2P) lending. P2P lending startup Fundkiss wanted to launch a P2P lending service in Mauritius, but there was no legal framework allowing such services, so the company worked with regulators to draft P2P rules. Today, however, P2P companies have graduated from the regulatory sandbox license to more specific Peer to Peer lending regulations. The Mauritian regulatory body has shown great progress in the regulatory environment allowing for innovation and learning from it. 

5. Mozambique

Mozambique is still in its infancy stage when it comes to fintech solutions. In 2018, the Central Bank of Mozambique together with the Financial Sector Deepening Mozambique created the country’s regulatory sandbox. The regulatory sandbox is under the Financial Inclusion Strategy that focuses on achieving financial inclusion in Mozambique. The regulatory sandbox took on the approach of an accelerator, admitting startups to try their ideas in a regulated environment. Some startups they picked include:

  • Quickepaye, which provides an online payment aggregator solution, allowing people to pay different bills online.
  • Mukuru, a South African remittance company that was permitted to try out their solution in Mozambique. Mukuru enables people to send and receive money within Africa and in some parts of Asia through their platform.

Both companies and others in the regulatory sandbox have now been granted the go-ahead to operate in Mozambique. Mukuru currently has a branch in Maputo, Mozambique.

5. Ghana

The Bank of Ghana in collaboration with Emtech Service LLC recently launched a regulatory sandbox pilot program. In a press release dated February 2021, the Bank of Ghana announced the launch of its pilot program, mentioning the industries they would focus on. The program is geared towards financial service providers, with preference given to blockchain technology solutions, electronic KYC, remittances and crowdfunding. The regulatory sandbox will be committed to addressing the needs of the unbanked and underserved persons and businesses.

6. Nigeria

The Central Bank of Nigeria released Nigeria’s regulatory sandbox framework in January 2021. It targets fintech and telecom solutions and will start to approve solution providers who apply for it on a cohort by cohort basis. The framework includes requirements, eligibility criteria and length of time, as well as other guidelines.

Fintech Opportunities in Africa 

Regulatory sandboxes have been able to bridge the gap between the private sector and regulators, enabling an environment where they work together for the development of the country. The growth of regulatory sandboxes across Africa is a testament to the work being done by governments to encourage new technology development on the continent and remove barriers to entry for fintech entrepreneurs. 

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Driving Business in Africa Virtual Event – The Power of Energy

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Driving Business in Africa Virtual Event – The Power of Energy

March 24, 2021

Online Event

Empower Africa hosted a virtual Event entitled “Driving Business in Africa Virtual Event – The Power of Energy”.  Below are the recordings from the event.

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Israel – Africa: Extraordinary Women, Extraordinary Entrepreneurs Virtual Event

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Israel - Africa: Extraordinary Women, Extraordinary Entrepreneurs

March 22, 2021

Online Event

As we marked International Women’s Day and Women’s History Month, Empower Africa hosted a virtual event entitled “Israel – Africa: Extraordinary Women, Extraordinary Entrepreneurs”. On this event we highlighted inspiring women entrepreneurs. View the sessions below.

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Agriculture in Africa – A Land of Opportunities

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Agriculture in Africa – The Land of Opportunities

March 16, 2021

Online Event

Empower Africa hosted a virtual Event entitled “Agriculture in Africa – the Land of Opportunities”.  The event delved into the value-based business practices underlying sustainable and robust agriculture development in Africa. Below are the recordings from the event.

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Why you should invest in Aquaculture in West Africa

artisanal floating aquaculture cages located in Kolda region, on the Casamance river, southern Senegal, West Africa

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Why You Should Invest in Aquaculture in West Africa 

By: Shira Petrack

Estimated Reading Time: 4 minutes 

Aquaculture in West Africa can increase food production, preserve the marine ecosystem, and restore wildlife populations. 

What is Aquaculture?

Think of aquaculture as agriculture is for water-based organisms: “Agri” comes from the Latin word “ager,” which means field, and “aqua” is the Latin word for water. More technically, aquaculture refers to the breeding, rearing, and harvesting of fish and other organisms in three types of water environments – freshwater, brackish water, and saltwater. Aquaculture can involve big cages in existing bodies of fresh or saltwater and land-based tanks that rely on water filtration and recirculation systems. 

Sustainable aquaculture practices can increase the global supply of fish, shellfish, seaweeds, algae, sea vegetables, and fish eggs while preserving marine diversity. 

Why invest in Aquaculture? 

The expanding global population brings with it a growing appetite for animal protein, which could strain our planet’s already weakened ecosystems. According to the FAO, global per capita fish consumption increased 3.1% every year from 1961 to 2017, almost doubling the population growth rate of 1.6%. Since 2013, fish production from aquaculture has outpaced capture fish production – some experts believe that by 2030, almost ⅔ of all seafood produced for human consumption will come from aquaculture. Investing in aquaculture is the only way to obtain more seafood for human consumption without contributing to overfishing or ecological destruction. 

In many ways, farming fish is much more environmentally friendly than raising land animals such as cows, chickens, or pigs. Fish is the most efficient animal protein to produce in terms of feed to pound ratio: – it takes only around one pound of feed to produce one pound of fish. In contrast, it takes almost two pounds of feed to make one pound of chicken, nearly three pounds of feed for one pound of pork, and close to seven pounds of feed for one pound of beef. Meeting the increased demand for animal protein through fish rather than land animals can free up hundreds of millions of hectares of grazing land globally. 

And while some aquaculture methods create pollution and weaken wild fish stocks, aquaculture done right can help replenish our lakes and oceans. Since the 70s, unsustainable fishing practices have lead to the decline of global fish stocks. Sustainable aquaculture farms can also cultivate complementary species of marine animals and plants to increase profits while maintaining viable self-cleaning ecosystems.

Why West Africa? 

Currently, Fisheries in the West African Marine Ecoregion (WAMER) generate around $400 million every year. A large portion of this income goes to foreign corporations who engage in destructive and unsustainable fishing practices that drain the region’s natural fish populations. Most fish populations in West Africa are already fully or overexploited, putting coastal communities’ livelihoods and food security at risk and inhibiting sustainable and scalable economic growth. The recent expansion of fishmeal and fish oil factories in the area is putting even more pressure on the already depleted waters. 

Aquaculture was first introduced in Africa in the 1950s, but has yet to produce meaningful food quantities on the continent. Currently, most of the fish harvested by European or Asian commercial operations get shipped abroad: In 2018, aquaculture accounted for less than 10% of the region’s seafood consumption. The lack of trained aquaculture fish farmers, stunted fish seed, poor aquatic health management, and high post-harvest losses due to underdeveloped cold-chain infrastructure have kept the sector from achieving its potential.  

At the same time, food insecurity remains a daily reality for many West Africans. Investments in sustainable aquaculture in West Africa could allow local communities to establish economically and ecologically viable fisheries that produce food and income. With the right technologies and know-how, West African fish farmers can produce enough seafood to feed their communities and export the surplus abroad. 

Small Scale Aquaculture in West Africa Can be Profitable

Aquaculture does not need to be conducted on a massive scale to be profitable. Perhaps surprisingly, research shows that small reservoirs in West Africa tend to be more productive than larger ones. Investing in building locally owned and/or managed aquaculture production operations 

Companies such as SkyFox Ltd have had success empowering locals to become aquaculture fish farmers. SkyFox helps fish farmers build artificial ponds that serve as the heart of an integrated aquaculture and crop-production solution. Once the fish farms are up and running, SkyFox connects the fish farmers with fish distributors to sell their products quickly and reduce post-harvest losses. 

Israeli company Palgey Maim has worked in Nigeria to build a fish production operation on an island in the middle of a lake. The fish farm draws the water from the surrounding lake, uses it to feel the fish pond, and treats it before pumping it back into the lake.  

How to Invest in Aquaculture in West Africa 

Empower Africa Agriculture Consulting Services can help you bring your aquaculture expertise to West African farmers and communities. Whether you specialize in monocultures, polycultures, onshore operations, open net systems, or aquaculture support activities such as fish distribution and processing, you can help develop sustainable aquaculture in West Africa. 

Contact us to for help in finding the right partners and optimizing your business model to increase income, profits, and food security in West Africa. 

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Hillel’s Tech Corner: Empower Africa

Israeli firm launches business network in Rwanda:

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Tel Aviv, Israel – OCTOBER 29, 2020:

A team of entrepreneurs and business people under Israel based Empower Africa this week launched its business network platform in Kigali.

The aim, they say, is to collaborate with their Rwandan counterparts in different business sectors to drive economic growth and transformation in Africa.

Empower Africa, founded by Ezi Rapaport, the son of Israel-based businessman Martin Rapaport, facilitates investment and trade in Africa.

“I thank the government of Rwanda for keeping the country open for business by allowing people to visit the country,” Caleb Zipperstein, one of the members said during a business networking event in Kigali.

Zipperstein described Empower Africa as a “trusted business community that seeks to collaborate with Rwandans and Africans across the continent” to forge partnerships for business.

At glance, the organization announced it was partnering with the Israel Embassy in Rwanda to launch an innovation hub.

“The innovation hub will bring together Israel and Rwandan entrepreneurs to build lasting companies with innovative solutions that will help the rest of the world,” Zipperstein noted.

Israel is globally renowned as being the “start-up nation” and is the world leader for number of start-ups per capita.

The country has at least 6,000 active startups and an economy dominated by industrial high-tech and entrepreneurship, according to Deloitte, a global accounting firm.

The world’s leading multinational companies have all chosen Israel: Microsoft, Motorola, Google, Apple, Facebook, Berkshire-Hathaway, Intel, HP, Siemens, GE, IBM, Philips, Lucent, Cisco, Applied Materials, IBM, J&J, and Toshiba are just some of the names in a long list of over 200 multinationals who realized that Israel is their ideal investment opportunity.

Many multinational corporations such as Tata, Kodak, and Citi Bank have established innovation centers in Israel.

Ron Adam, Israel Ambassador in Rwanda said they want to bring their experience to Rwanda. “Very soon we are going to open an innovation hub. The main idea is to bring Israel entrepreneurs and companies to do a proof of concept.”

Adam highlighted that the ultimate goal is to do business and empower local innovators, insisting that Rwanda is a good place to do business.

He however emphasised the need to let people fail if the country wants to create a pool innovative minds.

“There is a need to let people dare, let them fail. Don’t ask them to do something in one year, and if they don’t achieve it you think they are doomed,” he argued.

That is exactly how Israel was able to become a base for disruptive innovations, according to the ambassador.

“The vision (in Rwanda) is already there but we should let people try their hands and think outside the box. That’s a foundation of innovation,” he noted.

Rwanda is already home to Israel companies such as Motorola,

Businessman Emery Rubagenga believes partnerships with countries like Israel are key to driving business sector in Rwanda.

“Strategic partnerships are key, I believe and a country like Israel is unbelievably a role model when it comes to innovation,” he said during the event.

Rubagenga emphasised that Rwanda has an opportunity to work with Israel because the two have a lot in common.

“We have a lot in common – the history and philosophy, which is the entrepreneurial mindset,” he noted.

When President Paul Kagame visited Israel in July 2017 he invited Israeli investors and firms looking to enter the Rwandan market, saying the country was ripe for investments.

Media Contact:
info@empowerafrica.com

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Israeli firm launches business network in Rwanda

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Israeli firm launches business network in Rwanda:

Tel Aviv, Israel – OCTOBER 29, 2020:

A team of entrepreneurs and business people under Israel based Empower Africa this week launched its business network platform in Kigali.

The aim, they say, is to collaborate with their Rwandan counterparts in different business sectors to drive economic growth and transformation in Africa.

Empower Africa, founded by Ezi Rapaport, the son of Israel-based businessman Martin Rapaport, facilitates investment and trade in Africa.

“I thank the government of Rwanda for keeping the country open for business by allowing people to visit the country,” Caleb Zipperstein, one of the members said during a business networking event in Kigali.

Zipperstein described Empower Africa as a “trusted business community that seeks to collaborate with Rwandans and Africans across the continent” to forge partnerships for business.

At glance, the organization announced it was partnering with the Israel Embassy in Rwanda to launch an innovation hub.

“The innovation hub will bring together Israel and Rwandan entrepreneurs to build lasting companies with innovative solutions that will help the rest of the world,” Zipperstein noted.

Israel is globally renowned as being the “start-up nation” and is the world leader for number of start-ups per capita.

The country has at least 6,000 active startups and an economy dominated by industrial high-tech and entrepreneurship, according to Deloitte, a global accounting firm.

The world’s leading multinational companies have all chosen Israel: Microsoft, Motorola, Google, Apple, Facebook, Berkshire-Hathaway, Intel, HP, Siemens, GE, IBM, Philips, Lucent, Cisco, Applied Materials, IBM, J&J, and Toshiba are just some of the names in a long list of over 200 multinationals who realized that Israel is their ideal investment opportunity.

Many multinational corporations such as Tata, Kodak, and Citi Bank have established innovation centers in Israel.

Ron Adam, Israel Ambassador in Rwanda said they want to bring their experience to Rwanda. “Very soon we are going to open an innovation hub. The main idea is to bring Israel entrepreneurs and companies to do a proof of concept.”

Adam highlighted that the ultimate goal is to do business and empower local innovators, insisting that Rwanda is a good place to do business.

He however emphasised the need to let people fail if the country wants to create a pool innovative minds.

“There is a need to let people dare, let them fail. Don’t ask them to do something in one year, and if they don’t achieve it you think they are doomed,” he argued.

That is exactly how Israel was able to become a base for disruptive innovations, according to the ambassador.

“The vision (in Rwanda) is already there but we should let people try their hands and think outside the box. That’s a foundation of innovation,” he noted.

Rwanda is already home to Israel companies such as Motorola,

Businessman Emery Rubagenga believes partnerships with countries like Israel are key to driving business sector in Rwanda.

“Strategic partnerships are key, I believe and a country like Israel is unbelievably a role model when it comes to innovation,” he said during the event.

Rubagenga emphasised that Rwanda has an opportunity to work with Israel because the two have a lot in common.

“We have a lot in common – the history and philosophy, which is the entrepreneurial mindset,” he noted.

When President Paul Kagame visited Israel in July 2017 he invited Israeli investors and firms looking to enter the Rwandan market, saying the country was ripe for investments.

Media Contact:
info@empowerafrica.com

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Public Private Partnerships Driving Cold Chain Innovation for COVID Vaccine Transport in Africa

African woman giving man a vaccine

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Public Private Partnerships Driving Cold Chain Innovation for COVID Vaccine Transport in Africa

By: Leah Ngari 

Estimated Reading Time: 3 minutes 

According to the World Health Organization, Africa is far from ready for the continent’s largest immunization drive. Data collected by the WHO on immunization readiness from 40 countries revealed only a 33% readiness to roll out the vaccines, a figure that is well below the recommended 80%. In many of the continent’s countries, the complex task of acquiring, distributing, and administering the vaccines is made more difficult by the lack of infrastructure, including electricity and good road networks.

Despite increasing urbanization, more than half the population on the continent lives in rural areas. Governments alone do not have the tools or resources needed to transport, store, or track the vaccines during their journey to remote villages and once they arrive at off-grid clinics. Getting the currently available COVID vaccines to Africa’s rural populations will require cooperation between the public and private sectors.

Ideal Transportation of the Vaccine

Most currently available vaccines require maintaining a cold chain during transportation and storage. The Pfitzer vaccine needs to be stored at -70°C, while the Moderna Vaccine needs to be stored at -20 °C. Regular refrigerators, however, do not typically cool below 2°C. The two vaccines would be viable for a much shorter time at that temperature, which risks causing massive wastage from the lack of proper infrastructure to keep them viable enough time until they reach their destination. 

infographic showing the transport of vaccines

What’s working for the continent?

While the Covid vaccine rollout has highlighted the need for effective cold-chain infrastructure on the continent, establishing cold storage and transport solutions across the continent will have a lasting positive impact on food security, farmer income, and public health beyond the current crisis

Below are some of the private-public collaborations working on mapping out and implementing cold-chain logistics in the upcoming vaccination drive:

The Africa Center of Excellence for Sustainable Cooling and Cold chain (ACES)

Operating out of the University of Rwanda, the ACES is a new project to establish and maintain a suitable cold-chain that will link the continent’s logistics providers and farmers with experts and investors. ACES aims to minimize post-harvest food loss and medicine wastage on the continent, improve urban diets, and increase food exports. Researchers are currently identifying Rwanda and Africa’s cold needs to understand how to design the most efficient cold chain solutions.

Arktek Cold Storage Device

The current pandemic is not the first time the continent required cold storage for a vaccine. During the 2014-2016 Ebola outbreak, a vaccine developed by Merck also needed to be stored at around -70°C. The Arktek Cold Storage Device was introduced to Sierra Leone in 2014 and helped transport vaccines that immunized hundreds of thousands of Africans. 

Global Good, now part of the Bill & Melinda Gates Foundation, developed the device in partnership with Acuma, a Chinese refrigeration company. The device acts like a super-thermos that can maintain temperatures of up to -80°C without using any batteries, electricity, or solar panels. Arktek’s devices are small enough to transport easily and strong enough to withstand harsh transit conditions, making them ideal for transporting vaccines to hard-to-reach places on vehicles, motorbikes, and boats. Countries could use the device to deliver Covid vaccines to people in remote areas without equipped hospitals. 

Use of Solar Technology for Transportation

Electricity on the continent is not widespread, but sunlight in most Sub-Saharan African countries is abundant and cheap. As a result, public bodies and startups have started working together to develop a solar-powered refrigeration device to keep the vaccines cold during storage and transport.

PEG Africa, a for-profit solar energy company operating in West Africa, builds solar-powered off-grid solutions for the rural West African market. Some of its products include and pay-as-you-go solar-powered freezers for fishermen and women and solar-powered water pumps for small-holder farmers. Now, the company is collaborating with Power Africa, a public-private partnership facilitated by USAID, to provide solar-powered systems to off-grid clinics in Africa

Another company driving cold-storage innovation on the continent is Gricd, a Nigerian startup that has designed solar-powered smart cold boxes. Gricd’s goal is to minimize waste of food, medicine, and medical supplies such as blood and plasma and solve the “last mile” problem in rural and remote areas. Since Covid started, the company has been helping transport Coronavirus test samples from remote locations, and its cold boxes are in the process of acquiring PQS certification from the WHO

Private-public partnerships driving innovation in cold-chain infrastructure  

Private-public partnerships are leading the way for cold-chain innovation on the continent. These types of partnerships will grow as African countries continue their race against time to deliver vaccines to their populations. The cold storage solutions designed for Covid vaccine transport will continue to serve the continent long after the pandemic is managed. 

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The Financial Times has released its list of the top 20 fastest growing companies in Africa for 2024.
MTN Rwanda is taking a groundbreaking step towards environmental responsibility with the launch of the nation’s first-ever paper-based, biodegradable SIM cards, dubbed “bioSIMs.”
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Posted on Leave a comment

How this Entrepreneur Left the US and Returned to Rwanda for the Business Opportunities: The Story of ARED Founder Henri Nyakarundi

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How this Entrepreneur Returned to Rwanda for the Business Opportunities: The Story of ARED Founder Henri Nyakarundi

Estimated reading time: 10 minutes

Henri Nyakarundi was born in Rwanda, grew up in Burundi, and moved to the United States at nineteen to study computer science. After spending over a decade in Atlanta and founding several businesses in the States, Henri went back to Rwanda on vacation and felt the pull to come back home. Following several years of researching and working on his idea, Henri moved to Rwanda. He founded ARED, a company that provides green solutions to expand digital access and electricity connectivity in Africa and now operates in four countries. 

Empower Africa’s Editor Shira Petrack sat down with Henri to hear his story. 

What made you decide to leave the United States for Rwanda? 

I was getting tired of living in the States, and I knew that there is a certain quality of life that you can only get in Africa. As an entrepreneur, I believe that there are more business opportunities in Africa, because there is so much to be done here. I saw that Africa was changing, and I wanted to come back and be a part of it. 

How did you come up with the idea for ARED? 

Once I decided to return to Rwanda, I spent a year researching the market and deciding what sector I wanted to enter.

Initially, the idea of ARED was to develop a product that can provide phone charging solutions using renewable solar energy. Once I got started, I quickly realized that business in Africa is different than business in the States. In the United States, you can build a sustainable business by providing one or two services because the purchasing power there is much higher, so you can have higher margins. 

I wanted to cater to low-income people. I realized that to build a sustainable business catering to the base, I would have to make a multi-service model that would create several revenue streams from those multiple services to compensate for the low margin.

As a result, we shifted our project from a charging kiosk to a smart kiosk. We had a vision for a one-stop shop that would allow people to charge their phones while also giving them access to off-line digital storage capacity, some Android apps, games, and surveys by connecting to the kiosk server through Wi-Fi. 

The technology took us five years to develop, and we are the first company in Africa to have built this technology.  

What problem are you solving? 

There are two issues with digital access in Africa. First, the cost of the internet in Africa is very expensive. Seventy percent of the population is still not connected. And most people are at the low end of the spectrum and have extremely basic smartphones with very low internal memory and processing power. And then, of course, you have the energy problem – a lot of people don’t have the electricity to charge their phones at home. You cannot talk about access to digital connectivity without talking about the lack of energy access in those communities. 

How does the technology work? 

It’s called Edge Technology, but I don’t want to be too technical. To put it simply – the internet is just a highway between a bunch of servers where various applications and websites are hosted. The internet transfers the applications and websites from the servers to the end-user. If you bring those servers closer to the user, you can minimize or eliminate the cost of internet access. That’s really what the idea is. Our servers don’t replace the internet, but they do provide some basic functions and digital applications. By bringing part of the internet closer to the user, we can allow more people to participate in the digital revolution.

What is your business model?

Initially, we tried to control the whole value chain, but we quickly realized it would be impossible for us to be profitable under that model. Instead, we decided to focus and specialize on one aspect of the value chain and find partners or customers that can implement our technology and deal with the rest of the value chain. We now work according to a B2B model, where we sell our technology to businesses and NGOs that handle the technology’s implementation in the field. We focus on technology development and knowledge transfer to the clients. 

We had already pivoted when Covid happened, but Covid strengthened the fact that we made the right decision. Because if we had kept the old model, Covid would have killed our business

You now operate in four different countries. What were some challenges you encountered in expanding your business outside Rwanda? 

The challenges are genuine. You’re dealing with different cultures and different markets. You’re dealing with different levels of economic development and different tax regimes. We tried to manufacture in Africa. We found out that it’s not only more expensive to manufacture in Africa, but it’s also more expensive to ship from Rwanda to a neighboring country than it is to ship from Asia to Africa. 

There is also the challenge of margins. You’re dealing with low incomes, and therefore with low margins, in all those markets. So it’s essential to minimize your footprint.

Another thing learned is that focusing on the technology itself is not enough. You need to build a very innovative business model, and that business model needs to be adapted to every new country. That adds another layer of challenges. 

And then you need to find money. Investors still don’t see the value in African technology companies unless it’s FinTech. FinTech now is booming, but every other aspect of the tech industry, like health, connectivity, and smart city technology, are not getting enough investment. 

But I love challenges. I mean, that’s really what drives me.

Do you have plans to expand beyond Africa to other developing economies? 

We are in talks with a company that reached out to us to license our technology for the Philippines, but to be honest with you – that’s not really my focus. My focus is Africa and solving the problems here on the continent. 

What is your vision for yourself and for Africa for the next 20 years? 

I think Africa’s biggest opportunities will be in the tech sector, but agribusiness also has huge potential and is massively underrated. Over the next twenty years, global warming will add a new layer of challenges in the food sector and the water sector, and finding technology to adapt to those challenges will be the next biggest opportunity. 

Over the next five to ten years, I would like to finalize the ARED journey and sell the company. My next journey will be in the agribusiness sector. We still import so much food from outside the continent. I’m not in agribusiness now, but when I look at the data I know that’s the sector I want to enter next. 

I don’t want to develop a new product again like I did with ARED. It just takes too long and is too complex. My next company will be adapting existing technology for the African Market. There’s so much technology out there that’s solving most of the problems that we encounter, but a lot of it is too expensive or intricate to implement in Africa. I would focus on adapting those existing technologies so that they could be incorporated into the African ecosystem. Technology solutions in Africa need to be affordable, and they need to be very easy to fix locally because of the poor infrastructure. 

How do you explain just the state of the agriculture sector in Africa today? Why do you think that there aren’t more international partnerships?

There are a lot of reasons. Often, big corporations or international organizations think they know better, so they don’t necessarily look for partners beyond the government. Government bodies are not necessarily the best partners to implement something. They’re a good partner as an entry point, but they’re not a good partner for implementation. Government officials don’t understand the day-to-day business aspect. So that’s the first gap – international companies and organizations are not looking for partners in the local private sector.  

The second reason is that most of the existing solutions are very expensive, so they’re not adapted to Africa’s market. When you talk about a solution, you need to recover your investment. And in Africa, you need low-cost, low-tech solutions that are robust and adapted to the market.

Unfortunately, so many agtech solutions that could solve many problems in Africa are very high-tech and very expensive. And a lot of the components that make those technologies expensive are irrelevant to the African market. I mean, do you really need, in Africa, your technology to be controlled from the cloud and all? No, you don’t. 

There is also a problem of listening. For example, Google spent hundreds and hundreds of millions of dollars on a project to increase last mile connectivity in Africa, and after a decade, it failed. I can guarantee you that if they had started with a different approach – had they taken time to understand the ecosystem and look for local partners and worked on their product development with those local partners – things would have been different. 

Another example is in irrigation – irrigation systems are still extremely uncommon in Africa. I was looking at solutions that many African countries are looking at, and most of the solutions are designed for big farmers. But big farmers make up less than 10% of the farming industry in the region, and most farmers who need irrigation are small-holder farmers. And there are quite a few examples like that.

So, there’s a disconnect between the offering, the need, and what is available to implement the solution. A lot of international organizations think they know best. When those things change, you’ll see a much better ecosystem in Africa. 

How should international companies who want to enter the African market look for local partners? 

There are thousands and thousands of innovators in every kind of sector now in Africa. With digital tools such as LinkedIn, it’s not that hard to find somebody in a specific space that has proven themselves to a certain degree. The only thing the international company will still have to do is a little due diligence like they need to do before choosing any business partner. There are a lot of innovators on the ground. All they need is some access to funding or some access to expertise to improve on the technology. Finding the right partner is not that hard. It’s just a matter of will and of thinking that it’s important. 

What are some of the biggest misperceptions around doing business in Africa?

First, as I said, there is a big misperception that it is always better to deal with the government. Big organizations like to deal with governments, but if they really want to solve a problem – they will need to deal with the private sector. 

This is not to say that the government is always a bad starting point – we’re talking about 50 plus countries in Africa, so every government is different, and some governments are better than others. Unfortunately, many organizations focus on winning contracts or obtaining grants rather than solving problems. If organizations really want to solve problems, they should find somebody who’s solving part of that problem already, and plug into that ecosystem to support them in scaling up. 

Companies also do not need to go full force right away. Instead, they should start with a pilot project, conduct initial market tests, and then, when they reach a certain scale, they can go to the government for support. But we need to reverse the process. 

Another problem of working exclusively with government bodies is that many government officials will put their friends and family into their projects, even if they do not have any experience. This is not always the case, but corruption is real in Africa, at least in some countries. So the government really might not be the best partner in the beginning. 

If it’s a good government, it might be the best partner to scale up, but if you’re dealing with a highly corrupt government, I wouldn’t deal with them at all. I’d just deal with the private sector.

You know, governments worldwide are not great at business. They’re good at certain things, but government is just not the way if you want to solve a problem quickly and efficiently. International companies and organizations need to realize that they will not succeed in Africa without working with local partners and local innovators. It’s just not going to work.

I really believe that solving Africa’s problems is not that complex. The problem is the will. There are so many innovators with fantastic technology that can solve many problems, and all they need is funding and support. It’s just that simple.

Foreign investors and international organizations also need to stop having a biased view of African entrepreneurs. There’s excellent entrepreneurship here, and we need to be treated like any entrepreneur from anywhere else. 

I’ve done business in the States – it’s highly risky! But investors like to focus on the opportunity and growth potential when it comes to American startups and on the risk when it comes to African startups. There’s an inherent risk in startups everywhere, and there is also a risk in Africa. 

But international investors use risk to devalue our companies and our capacity to solve problems, and I take issue with that. 

I’ve spoken with dozens and dozens of investors, and I had one investor ask me how he could be sure that I would not spend the investment on something else. Is he asking the same question when he invests in startups in his own country? 

What do you think could be done on a regional level to support startups and develop the private sector? 

Most of the big African banks do not have investment funds. How can you build an ecosystem like that? And there are no grant programs in Africa that I know of that are 100% financed by African government. All the grant programs that governments in Africa support are subsidized by European or American credits. And when you have a partial grant, then the decision of how to allocate the funds will be made in London or Europe or America.

I think our African leaders could do much more. They could tell the big organizations that if they want to work in Africa, they need to work with a local startup to implement their solution. Supporting African innovators should be central to the government’s economic development strategy.

I was in Ethiopia not long ago, before Covid, and I saw how China is dominating that economy. It’s crazy. And they bring their own solutions and their own technology. Until we own our technology, we’re going to keep being customers of the rest of the world. No country has been able to develop without developing its own technology. It’s just not possible. 

Are there any parting thoughts you would like to share?  

I’m positive. I wouldn’t be back home if I wasn’t positive. But I also didn’t say it was going to be easy. I like challenges. That’s what keeps me going every day. If it was easy, it wouldn’t be exciting. It’s hard. It’s definitely hard. 

I’m extremely optimistic. Things are changing. It’s just not changing fast enough. But a lot of things are moving on the right track. More governments across Africa are focusing more on partnerships among Africans and not just building partnerships with the US or the European Union. I see a lot more conversation within and between countries in Africa.

On the infrastructure side, Rwanda has done a tremendous job. If not for RwandAir, I wouldn’t be able to travel to West Africa. That’s a game changer. On the visa side, I can travel now to most of the African countries without a visa. That’s amazing. Oh my God, it saved me a lot of time and energy.

In most African countries now, you can register a business online. In terms of connectivity, I can connect with pretty much anybody, anywhere in Africa, without having to go to them and without knowing someone who knows someone. That’s also a game-changer. 

Fundamentally, things here will accelerate when our mindset changes, and we realize that we need to look inward and not outward for our development.

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