Africa's energy suppliers of the future will be more integrated and offer a diverse range of services. Strive Masiyiwa, chairman and founder of telecoms firm Econet, explains
As an entrepreneur my philosophy is about reaching out to meet the needs of the people by asking: what do people need and how can we respond to those needs? More than ever, people in Africa need energy. At Econet, we have set out on a journey of innovation and experimentation to meet those energy needs. What we have discovered on that journey is that the old rules don't apply anymore. The new economy, that exists today, requires a new energy economy and therefore a new approach to providing that energy.
The new economy in Africa is more global-investment holding firm Tencent is the most valuable company in Africa, and it's from China. The new economy is more mobile, due to the rise of apps such as M-PESA and Ecocash. In Kenya, for example, more than 60% of people use their mobile phones for financial transactions. And the new economy is focused on a new type of client which is looking to combine its energy needs with other services and a new type of marketplace, where a wireless internet provider can also supply clean energy and a smart building.
Our journey has also led us to discover that out of crisis comes opportunity. Africa faces many challenges, and the continent is not always unified in tackling those challenges. Econet has had much experience in providing solutions to those challenges. The company was created in Burundi, after the civil war, to allow foreign investment to find its way to those that needed it most. When we decided to expand this business opportunity in Zimbabwe, we realised that the poor no longer had access to small denominations of money. Ecocash could be the solution. Ecocash mobile money transfer service is currently used by over 6.8m Zimbabweans with over $23bn worth of transfers transacted over the past five years.
Business needs to be principled. The Pope told all of us gathered at the Vatican: "Seek ever more creative ways to transform our institutions and economic structures so that they may be able to respond to the needs of our day and be in service of the human person, especially those marginalised and discarded." We need to remember that we are not just selling electrons, but meeting the needs of our people. With all this in mind, we created Distributed Power Africa (DPA). Africa has an energy crisis, people's needs are not being met, and we have a duty to solve the problem. Our solution will look to use our pan-African history as a trusted provider of wireless, fiber optic and money services to provide energy to the mid-sized market that powers the African economy-schools, clinics, businesses and others struggling to serve their communities.
By providing a full service-installation, maintenance and ownership- we will help to provide a much-needed source of reliable energy, at a stable and competitive price for at least 10 years. Furthermore, due to the strength of our business we will cover the upfront cost of the hardware and software so that there are no upfront costs, or risks, for the customer. This innovation will make energy more accessible for all. Due to innovative energy monitoring systems, DPA will be able to go further and ensure that efficiency is built into the system by providing energy efficiency technologies. This will help to avoid energy waste, and manage the costs for the consumer. We will be able to work with our existing clients and we will initially do this in 10 African countries.
But we cannot do it alone. Competition is good, but it has to be bolstered by cooperation. Two-thirds of sub-Saharan African economies are growing faster than the global average, and three African countries are among the world's top 10 fastest growing economies. These leading economies and their neighbours will be able to build more profitable energy markets if they cooperate across their borders. Innovative energy products and services should be able to move beyond borders to the people that need them and this requires leadership at every level. Econet is therefore looking to government, regulators and business to all partner together to ensure that we create a healthy market for innovative energy services across Africa so that we can bring essential life changing services to millions of people.
This article appears in the annual issue of World Energy Focus, the magazine of the World Energy Council, with content produced by Petroleum Economist. For more information and to read the annual in full, visit worldenergy.org.