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Building for Africa (draft)

II: Market Characteristics

Beyond people and relationships that are highlighted in the section above, the different cultures and economic realities have shaped a set of trends and characteristics. These are realities that have forged unique market dynamics and ways of operating that have interesting responses and approaches by the population.

7. [!] Gaping holes in infrastructure


[coming soon...]

8. Low tech, but very savvy


while penetration is low for what would typically classify as a smartphone (see section below), there are , a continent with a population of 1.3 billion - i.e. roughly half of Africans own a mobile phone. Mobile coverage is close to
even in rural areas - but often only 2G. Mobile money is very widely adopted, mostly used via *gasp* USSD. (Insert momo stat) Everyone and their ‘gogo’ used a phone daily to make payments, connect and shop.
What this changes: you need to build for mobile first, and many people hardly ever use a browser. (At least not knowingly) starting an action from WhatsApp or Facebook messenger is far more native to the user than a Google search or opening a browser and typing a URL SMS notifications for key actions are often expected and can build a lot of trust. Lastly, there will not be a central entry point to your services. Multiple interfaces across multiple channels is to be expected and modularizing your services is a must. Beware fancy JavaScript libraries that aren’t wildly backwards compatible as a meaningful proportion of customers may be on devices from 5+ years ago.

9. Data is expensive. 


While data costs are coming down all over the continent, they remain due to the smaller values purchased relative to the first world. The average airtime spend in Africa is around $11 for 1 GB of data. Swaziland tops the list with an average spend of over $21 per GB of data, while Egyptians are only spending just over $1 for the same amount. In relation to salaries or earnings, data still remains a significant portion of someone’s monthly income in many African nations.
What it means: Users regularly run out of data and purchase very small (a few dollars) of airtime or data at a time. Most is run on pay-as-you-go and contract penetration is limited. A very common reason to get your app deleted is if you “steal” data - aka a background update or high data use - because if you’re micromanaging your data, you’ll know when a chuck disappears. Many keep their phones off or in airplane mode to prevent this. Often users will flat-out delete an app to stop this and rather download it when they need it again. Adding a PWA or saving a website to your homepage is another common tactic. Be sure to communicate well about data use to set expectations - and definitely build your apps to be conscious of it.

10. Diverse languages and huge literacy barriers


There are over each with many dialects spoken across Africa’s 52 countries, Nigeria alone accounts for over 520 of them. Literacy is generally good in urban areas, it falls off quickly outside that. General literacy levels are well below international averages. (Source)
What it changes: While English is pervasive (or French or Arabic depending on the region), you cannot expect it to be your customer's first language. Customers often navigate by icons or menu patterns (which works well for USSD) so they need to be obvious and not change much. A friend of mine helped build a pregnancy advice platform in rural Nigeria via USSD where the information was delivered as dialect-specific voice recordings via automated callbacks. (Link) You need to really understand your customers before designing a solution.

11. [!] Low % formally banked



[coming soon...]

12. High inflation

While this is a weird one to have on the list, inflation in African markets is significantly higher than in other international markets and this can affect a business in unusual ways. While they are often above double digits normally, they can also spike unpredictably, as happened in , the 3rd worst on the continent. “Yesterday's prices are definitely not today's prices” as in 2022 food prices increasing by in Nigeria. While Foreign exchange plays a role in this, there are many other contributing political or economic factors to consider as well.
What it changes: The impact of this is felt in a number of ways, from salaries and financing to actual business models. When your teams’ cost of living is increasing by upwards of 10% then your salary bill growing at a similar rate is just holding steady. Building that into your cash flow is often overlooked and not insignificant. Another place where this catches businesses out is in lending and loan books. Inflation can cause havoc on repayments over longer periods as the repayments are worth relatively less over time. Lending in local currency for a USD loan book is fraught with uncontrollable risk - where a double-digit currency devaluation could completely erase all returns. I’ve also seen inflation leveraged for a profit with Buy Now, Pay Later products where customers paying a product off over 6 months will save money by locking in a fixed amount that has a decreasing value in relative terms. Thinking about the potential impact of double-digit value changes across your product and business is a must for identifying safeguards.

13. [!] Fiefdoms & gatekeepers

[coming soon...]

14. [!] Unreliable infrastructure


[coming soon...]

15. [!] Small fragmented markets (forced to expand or diversify fast) 



[coming soon...]
16. [!] Difficulty with identity 


[coming soon...]

17. [!] Money moves really fast.


[coming soon...]

18. [!] Physical advertising is huge


[coming soon...]



(c) Roger Norton 2024
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