- Africa is in the midst of a trade war that could affect its future, and experts are now warning that the ongoing feud between the world’s largest economies could affect the continent’s digital transformation.
- For a region that has relied heavily on Beijing and Washington for both financial assistance and aiding in technology change, it is equally logical to look west or east for assistance.
Africa is in the middle of a trade war that could affect its future, and experts are now warning that the ongoing feud between the world’s largest economies could affect the continent’s digital transformation.
For a region that has relied heavily on Beijing and Washington for both financial assistance and aiding in technology change, it is equally logical to look west or east for assistance.
Peter Mwencha, executive director of the International Society of Kenya, says Africa’s over-reliance on both nations for imports has led to the resulting juggernaut.
“Africans are consumers of technology from these tech giants, so they have found themselves in a difficult position. There is a total lack of technological creativity that can shake the world, and choosing China or the US is a swamp,” he says .
He adds that Africa is currently in a dilemma as technopolitical tensions between the two economies could create political risks that could affect economic benefits.
Stefan Dercon, Professor of Economic Policy at Oxford University, says the most unfortunate outcome would be if Africa had to choose between China and the US in the short term.
“There is a conflict of values, and Britain and Europe as a whole are affected, too,” he says.
The Kenyan co-founder and CEO of Toronto-based startup HealthBank Odero Otieno told Business Daily that there is no doubt that the technology trade war between the US and China will affect Africa, a continent of more than 1.3 billion people remains at the end of the global supply chain.
“That leaves Africa the main frontline for the escalating trade wars between the US and China. Amid this war, the global influence of China-based tech companies like Tik Tok grows and outperforms America’s Facebook as the most downloaded non-company in the world. Gaming app” he explains.
The app, which quickly garnered more than 2 billion users worldwide, including Africa, was banned in the US and large US companies like Microsoft and Oracle have bid to buy their US operations.
“If an African country goes to China for help, the United States will refuse it. If you are for America, the Chinese will not approve your loans as quickly as they did before,” said Boniface Mutunga, an expert on international trade and finance.
What worries many Africans, however, is the fate of Huawei smartphone users after the US banned the phone maker from using the world’s dominant Android operating system (OS).
“This is all to the detriment of the US because they have imposed restrictions on Huawei because it developed its own operating system – Harmony – to retain users. African users can continue to use the devices,” said Prof. Bitange Ndemo of the School of Business observed at the University of Nairobi.
However, the Harmony operating system currently only has 96,000 apps compared to the more than 700,000 available for download on Android from the Google Play Store.
After the ban, Huawei outperformed Samsung and became the best-selling smartphone in the world in the second quarter of 2020 with a market share of 20 percent. While Apple had a 14 percent market share, other Chinese brands like Xiaomi, Oppo, and Vivo also had a sizable share.
The US, which has continually accused China of spying on its devices, algorithms and codes, gets a small share of the African market, while China ships most of the electronic devices used.
“That’s because Chinese products are cheaper than those from the US. African countries are still low-income economies, so few people can afford the iPhone 11 Pro compared to the Huawei Y6,” says Mutunga.
He adds that Africa’s fondness for the open source Android system could result in lower sales of Huawei smartphones on the continent, but notes that the other brands that Africans find pocket-friendly are also from China.
Huawei, whose 5G technology has been banned in the UK due to pressure from the US, has the largest share of 5G networks in the world, according to the mobile recharge service Ding. Over 150 base stations are delivered.
In June last year, the company won 50 commercial 5G contracts for 30 countries and expanded its network to other Asian countries and the euro zone.
“China has raised the bar for measuring global dominance. It is installing 5G in several countries to consolidate its leadership and performance through fast internet connection and a robust internet of things system. This is the new global power,” notes Mr Mutunga.
US President Donald Trump once said at the tech marathon between the two nations that he wanted to see 6G in his country.
“I want 5G and even 6G technology in the US as soon as possible. It is far more powerful, faster and smarter than the current standard. American companies need to step up or lag behind. There are none.” Reason why we should stay behind, “announced Trump in a tweet on February 21, 2019.
Huawei is also competing with Google to develop Kenya’s technical talent.
The Chinese company recently launched the seventh cohort in its Seeds for the Future program, training 60 Kenyan university students in technologies such as 5G, big data and cloud computing.
But Google outperformed Huawei in the training industry, granting Sh100 million in 2018 to train 100,000 farmers in the country. Working with the government of Mombasa County, Google has trained 5,000 young people in digital skills as part of its “Grow with Google” program.
Dr. Mwenja assumes, however, that China understood the African psyche better than the USA. That’s why companies like Safaricom are using Huawei devices for their Wi-Fi installations to prepare for the 5G launch.
“The US approach to Africa is too commercial, too capitalist. Their products like iPhones are conditional. The Chinese knew what the Africans wanted, they embedded development in their policy of technical dominance,” he explains.
To counter the sanctions in the US and the decline in Chinese exports to Europe, manufacturers from Beijing have flooded African markets with cheaper products than local African companies can profitably do.
“This is mainly because these African companies do not have the large economies of scale that are synonymous with their Chinese counterparts, which is driving Africa further down the supply chain,” notes Otieno.
As Africa builds its big data ecosystem, China’s tendency to use sophisticated technology to listen to people’s lives is pushing the continent away from the devices of the world’s most populous nation and citing privacy concerns.
In 2018, for example, Beijing had to reject reports that it had spied on and overheard the negotiations of the African Union in Addis Ababa by creating a “back door” for more than five years to suck confidential data from the servers!
Many media reports found that technicians peaked in data usage between midnight and 2 a.m. every evening in January 2017, even though the building was empty. Investigations revealed that the union’s confidential data had been copied to servers in Shanghai.
China, which has funded numerous development projects in Africa, is in the same boat as the US – via Google and Facebook, in terms of violating data laws, as both use Africa’s underdeveloped big data sector.
This further underscores the lack of innovation in the technology industry in Africa that can drive companies to compete in the global data economy.
According to Prof. Dercon, the most constructive answer for Africa would be to regulate the governance of these technologies so that they do not depend on the competing models of the two superpowers.
“Even in Africa, data cannot remain an unregulated space. Given the uncertainties and lack of transparency in governing technology, this could force Afican governments to take cybersecurity and the need to understand it and invest in it more seriously, ”he notes.
Dr. Mwenja notes that data as the “new oil” has sparked a silent war between China and the US over who controls Africa’s data.
“Here African nations have to unite and create a data law to protect their citizens, otherwise the two countries will continue to collect valuable data at the expense of the continent,” warns the expert.
With technology precedes regulation, the continent needs to step up its efforts to create global solutions as regulating a technology you do not own or about which you have little understanding has proven a difficult task for African governments.
Prof. Ndemo’s worldview is that Africa’s vulnerability to technical manipulation lies in its disjointed progress in the fourth industrial revolution and that time is running out for the unification of all 55 nations.
“These nations are fighting for monopoly and have so much behavioral data collected that they can predict how, why, when and what Africa wants,” he says.
He calls for the creation of a digital single market for Africa so that the 1.3 billion citizens in the global digital economy can negotiate.
“We cannot compete as independent nations, we have to unite so that the world can listen to us when we have a problem.”
In the meantime, Africa’s leading economies such as Nigeria, South Africa and Kenya can benefit from this trade war if they help Africa increase support for local businesses and startups, particularly in the technology sector, through grants, subsidies and building state-funded technology hubs.
“Kenya and Nigeria have talented young entrepreneurs and engineers. When you combine this with the fact that the African continent is endowed with some of the most important minerals in the world, there is no reason at all why these countries still fail to make basic things like smartphones and Laptops or even cars, “says Otieno.