Look before you leap

CAN entrepreneurs make up for a lack of roads? In Rwanda, where most of the population live in cut-off villages, the government wants to skip straight to drones. Encouraged by Paul Kagame, the president and a darling of the development industry (if not of human-rights activists), some of Silicon Valley’s most prominent venture-capital firms, including Sequoia Capital and the investment arm of Google’s parent company, Alphabet, have bet that tiny, unmanned aircraft carrying medical supplies can simply hop over the rolling green hills and the mud tracks that barely connect people now.

It is the latest example of what businesspeople working across Africa call “leapfrogging”. Usually married to an almost evangelical belief in the power of startups, this is the notion that, having failed to adopt now-outdated technology, Africa can simply jump straight over it and go right to the latest thing. Just as drones can make up for poor roads, the theory goes, mobile phones can overcome a lack of well-functioning banks, portable solar panels can stand in for missing power stations and free learning apps can substitute for patchy education.

There is a compelling precedent. Fifteen years ago, only a tiny fraction of Africans had access to phones of any kind. Getting a landline installed meant waiting years. Then mobile telephony exploded. In some African countries, such as Uganda, the number of mobile phones came to surpass the total number of landlines in less time than the old state monopoly would take to install a single connection in your house (typically two years or more). When a telecoms mast goes up, other new businesses follow. Young men start selling airtime; farmers find new markets.

Now the hope is that drones could take over from mobile phones as the way to transform Africa. The project under way in Rwanda is courtesy of a startup based in Silicon Valley called Zipline. Its idea is to use small, fixed-wing drones to drop off packets of blood with parachutes from Rwanda’s five blood banks to hospitals and health-care centres, under a contract with the government. A lot of women die in childbirth because they cannot get blood quickly enough.

But the hype about machines saving African lives ought to elicit caution. No one can say how many people will benefit from Zipline, which has yet to begin operating, or whether there will be sufficient profits to continue over the long term. Another project is the world’s very first “drone port”, designed for Rwanda by Foster + Partners, a fancy British firm of architects that wants every small town in Africa to have its own drone port by 2030. Yet its Rwandan project won’t be completed for another four years. A separate initiative, in Malawi, to transport blood samples for HIV tests, received money from UNICEF, a branch of the UN, and testing is under way. The project is pricey—at $7,000 a drone. Paying drivers on motorbikes would be cheaper.

Such caveats hardly dampen the mood at business conferences in Africa, where you find hundreds of investors gushing about their plans to help the poor with new technology and make big profits while doing it. “Within the next few years you’ll really see leapfrogging taking off,” says Ashish Thakkar, a British-born, Ugandan businessman whose Mara Group, a business-services firm, is setting up tech businesses across the continent. Perhaps, but tech booms based on leapfrogging have been wrongly anticipated in the past. Americans who turn up in Nairobi and Dar es Salaam with millions of dollars hoping to buy startups that have risen as part of the so-called “Silicon Savannah”, an east African cluster, for example, frequently leave empty-handed because there isn’t all that much to buy.

African tech types often think they can quickly copy rich-country products and sell them to the urban middle class. But then they discover that there is no getting around complex tax laws, a dearth of engineers and fragmented markets. The Western investors who back them have even less grasp of just how dysfunctional basic infrastructure can be, notes Ory Okolloh, a Kenyan investor and a political activist. All the evidence suggests that technology firms are no better at leapfrogging such hurdles than, say, a carmaker. The only part of the continent with a mature tech scene is South Africa: a country which also has good roads, reliable power and plenty of well-educated graduates.

Mr Kagame himself has admitted that leapfrogging has limits. Drones can transport blood, but they can’t transport doctors, who need roads. Solar panels will help people light their homes without burning kerosene, but they will not replace the functioning grid that manufacturers need. Nor will clever technology firms do away with the need for well-drafted regulation and the rule of law.

Mind the gaps

A few tech firms are pulling off impressive feats. M-Kopa, a Kenyan company backed by the Gates Foundation, has sold some 375,000 solar panels on credit, using mobile money to collect payments and to monitor the creditworthiness of borrowers. But it has had to build an entire network of old-fashioned marketers going from door to door. Jumia, a Nigerian e-commerce firm, built separate logistics systems in seven different countries. In other words, to make the most of digital opportunities these firms had to construct their own basic physical infrastructure.

Wander the streets of any big African city and it soon becomes clear that a lack of enterprise is hardly the problem. In Nairobi’s biggest slum, Kibera, the narrow dirt streets bustle with businesses charging phones from generators; running tiny cinemas showing Premier League football on satellite TVs; and selling solar panels. What you won’t find are clean toilets, potable water or anyone earning much over a few dollars a day. The main leapfrogging that takes place is over the open sewers. That is not something you can fix with a mobile-phone app.