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Entrepreneurs lead the charge for a more connected Africa

As the African Union gears up to launch a visa-free passport for the continent in 2020, African entrepreneurs are connecting the country ahead of schedule.

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In the satirical novel In the United States of Africa, the French-speaking, Djiboutian author Abdourahman A. Waberi depicts an alternative reality in which a unified African continent has colonized the world.

The 2006 novel opens in a globe where a prosperous Eritrea is the nexus of “sound business sense” and “the virtues of parliamentary democracy,” where the largest tech projects are financed in the Keren valley, and the global stock exchange takes place on Lumumba Street, named after the Congolese independence leader Patrice Lumumba.

In this imaginary world, diplomatic disputes are settled in the Gambian capital city of Banjul, and the flow of capital between Eritrea and its neighbors is “dizzying.”

Evident in Waberi’s imagined Africa is the emphasis on dynamic intra-continental mobility  — mobility that in reality, is inhibited by numerous barriers, among them political and administrative.

In an effort to break down those barriers, the African Union (AU), a continental coalition founded nearly two decades ago, announced a plan to launch the African Union passport to the general public in 2020.

It was officially launched at the AU Summit in 2016,  and administered to African Ministers of Foreign Affairs and representatives of the AU who are based out of the AU’s headquarters in Addis Ababa, Ethiopia.

While news of the passport is still on hold and representatives of the African Union did not respond to The Sociable’s request for comment, the impact that pan-African collaboration will have on technological and entrepreneurial developments is already evident.

In November last year, the Nigerian digital payments firm Interswitch was named Africa’s most valuable fintech business, with a valuation of $1 billion. Interswitch began to draw the attention of investors like Visa when they began to expand their market beyond Nigeria and into Uganda, Gambia and Kenya. Now, Interswitch sells its products in 23 African countries.

Success stories similar to that of Interswitch seem to be following the transcontinental trend of valuable VCs, but the one persistent challenge is that these VC hubs tend to be located, quite literally, across the continent.

According to Tech Crunch data, the top three VC markets in Africa are located in Kenya, on the east coast of the continent, and whose VC market is valued at $348 million; Nigeria, which is located in West Africa and is worth $306 million; and South Africa, which is worth $250 million.

Between these countries, a visa is sometimes needed for travel, which can cost up to $125 for a single entry.

Barring distance and flight costs, the Henley Passport Index ranks which countries’ passports have the most mobility in global travel, based on the number of countries they have access to without a visa. On the index of 107 countries, Kenya ranks 72nd, Nigeria ranks 92nd, and South Africa ranks 56th.

It comes as no surprise, then, that what makes these countries entrepreneurial hubs — geographically isolated though they are — is their inter-dependence on outside markets.

Most representative of this pan-African strategy is M-Pesa, the Kenya-based mobile payment platform that was launched in 2007.

According to the World Bank’s Global Findex Database, Africa houses the largest underbanked population in the world. But since 2014, M-Pesa and other mobile payment platforms like PalmPay have doubled the percentage of mobile money account users to over 20 percent.

“Opportunities abound to increase account ownership: up to 95 million unbanked adults in the region receive cash payments for agricultural products, and roughly 65 million save using semi formal methods,” reads a World Bank press release entitled “Financial Inclusion on the Rise, But Gaps Remain, Global Findex Database Shows.”

By taking on such a large structural problem, M-Pesa has paved the way for other African mobile banking platforms like Opay and PalmPay, which both received over $40 million in seed funding respectively in 2019.

It’s common knowledge for many African leaders and entrepreneurs alike that free visa travel within the continent would accelerate the continent’s exponential growth..

“Rwanda is ready for the AU Passport issuance. Other countries will also be working towards implementation of this decision. The free movement of people in Africa will spur our economic growth,” Rwanda’s Foreign Affairs Minister Louise Mushikiwabo said in a 2016 press conference.

But, as the bureaucracy of 55 countries continues to churn, the entrepreneurs of the continent seem to be the ones taking Waberi’s dream of a united Africa and making it into a reality with more connectivity between nations.

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Jordan Jones
Jordan T. Jones is a writer and social media editor who lives in Medellin, Colombia. He is interested in the diverse ways that society creates and responds to culture. The Atlanta-native is a Fulbright scholar, former associate editor at The Atlantic, and amateur salsa dancer.