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M-Pesa’s African moment

M-Pesa, the mobile money system that is the pride and anchor of Kenya’s homegrown technology community, has had plenty of hype and excitement since it launched in 2007.

But in the last fortnight there have been two key M-Pesa news developments which have been covered by the media without the usual fanfare.

The first piece of news is that Kenya’s regulators have convinced local mobile money competitors to enable interoperability. So, for example, this allows Safaricom customers to use M-Pesa to send money to an Airtel Money customer, which currently isn’t possible. To be clear, Safaricom has built a strong enough dominance in the market (around 70% market share) that this might have little impact on the Kenyan market for the foreseeable future.

But things start to get more interesting when you consider mobile money is still at a very early stage in many other African markets and even beyond the continent.

Then a few days later came the news UK’s Vodafone Group had transferred a 35% stake in Safaricom to its South African subsidiary, Vodacom in a $2.6 billion.The news rightly grabbed plenty of financial news headlines but not as many in terms of its operational impact.

Now that more of Safaricom’s ownership structure is consolidated with a South African holder, it appears there will be more focus on a pan-African strategy, particularly through its M-Pesa crown jewel. Safaricom and Vodacom made no secret of their ambitions to explore this option. Vodacom has tried unsuccessfully in the past with M-Pesa in South Africa, but that doesn’t mean the mobile money platform couldn’t work in many other promising African markets, especially if Vodacom works closer with Safaricom.

In fact, when you join the dots on both pieces of news, you can envision how a rising tide will lift all boats in a genuinely competitive pan-African mobile money landscape that involves major players like MTN Mobile Money, Orange Money and Airtel Money among others. The hype about M-Pesa has been great, but even Safaricom’s own chief executive Bob Collymore has described its technology as “clumsy”. This could all change on a continent-wide scale—and not just for M-Pesa.

It will take time—years, not months—but interoperability, pan-African competition and open markets will drive several African tech sectors and local companies to take an unassailable and sustainable global lead in mobile money.

Yinka Adegoke, Quartz Africa editor

Stories from this week

Nigeria is on the edge. Despite inching towards growth, Nigeria’s economy remains mired in recession for the fifth consecutive quarter. The reality of a dire economy is made worse by mounting political tensions fueled by rumors of a military coup plot even as president Buhari is absent on his second indefinite medical vacation in London.

History is made, but so is a scandal, at WHO. In a historic election, Dr. Tedros Adhanom Ghebreyesus, a former Ethiopian health minister, emerged as the first African director-general at the World Health Organization. But Ghebreyesus takes office under the cloud of a growing scandal after an investigation revealed the United Nations agency spent more on travel than it did on tackling AIDS and malaria.

The dead DRC opposition leader that’s larger than life. Despite passing away on Feb. 1, the shadow of DR Congo’s longtime opposition leader Etienne Tshisekedi, looms over the nation’s politics. Fearing Tshisekedi’s funeral may become a mass demonstration against president Joseph Kabila, authorities have refused to let his body be repatriated from Belgium, reports Lynsey Chutel.

Why do we celebrate Africa Day? Each year on May 25, the continent celebrates Africa Day. But like many other holidays, the point and history of the Africa Day celebration seems lost on many with the African Union failing to achieve its goal of free movement on the continent.

Zambia is thinking of building a new capital. Zambia’s government is considering moving its capital from the well-known metropolis of Lusaka to a lesser known rural district of Ngabwe. Its sole advantage today might be that it’s located in the center of the country. Lusaka, like many other African cities has struggled to keep up with its own rapid urbanization.

CHART OF THE WEEK

More people fled conflict in DR Congo than in Syria and Iraq last year. In 2016, around 922,000 people—the highest number of displaced people due to conflict recorded globally—fled their homes in DR Congo. Much of the displacement in DR Congo is linked to the country’s political instability, writes Yomi Kazeem.

Other Things We Liked

The shadow war America is waging in Africa. There are now more US special operations personnel devoted to Africa than anywhere else except the Middle East, writes Nick Turse in Vice News. In response to terror attacks in sub-Saharan Africa, which have skyrocketed in the past decade, US personnel operations in Africa now include “advise and assist” counter-terrorism raids and training of local allies.

The paradox of the “Fela!” musical in Lagos. For much of his life, through his music, the legendary Fela Anikulapo Kuti was a fierce critic of Nigeria’s government and elite deriding corruption and inequality in the country. But at a recent stripped-down version of a Broadway show celebrating Fela’s life and music in Lagos, much of audience was made up of some of those same elite, Siobhán O’Grady writes in LA Times.

Kenya’s upcoming elections are proving the perfect cover for violent pastoral clashes. With drought forcing thousands of nomadic herders to invade wildlife reserves and private farms mostly owned by white ranchers, tensions are brewing in Central Kenya, Abigail Higgins writes in Foreign Policy. Kenya’s government’s lack of urgency to quell the crisis suggests it’s concerned about optics given the country’s elections in August.

Keep an eye on

Kenya’s Uhuru Kenyatta to launch new Chinese-funded rail (May 31). President Uhuru Kenyatta is set to launch the Mombasa-Nairobi Standard Gauge Railway (SGR) line next week. Having backed the project heavily, senior officials from the Chinese government are expected to be in attendance at the launch ceremony.

South Africa to release unemployment data (Jun. 1). Amid growing political and economic tensions, Africa’s most advanced economy will release its latest unemployment data next week. In the last quarter of 2016, Statistics SA put the figure at 26.5%. the new data could be a litmus test for president Jacob Zuma’s already embattled presidency.

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