Why Africa need not fear Artificial Intelligence and here’s how it can use Fintech to own the fourth industrial revolution

Nairobi City skyline.
  • The World Economic Forum forecasts a net loss of over 5 million jobs in 15 major developed and emerging economies to Artificial Intelligence worldwide by 2020.
  • Aarti Shah, former head of government relations at Thomson Reuters and a fintech expert, says carpentry and all manner of informal jobs in Kenya as we know it today will soon be phased out and done by robots.
  • Shah says fintech for production will change the game and it is up to African countries to adapt or die.

A drive along Nairobi’s Ngong road and one would be met with endless informal timber yards filled with skilled carpenters who keep churning out beautiful furniture of all manner to the delight of commuters who normally admire them from afar whenever they get caught up in Nairobi’s mad traffic jams.

In less than 15 years, however, that sight may cease to exist as we know it and with it thousands of job opportunities, thanks to technology and, more specifically, artificial intelligence powered by fintech.

Aarti Shah, former head of government relations at Thomson Reuters and a fintech expert, says carpentry and all manner of informal jobs in Kenya as we know it today will soon be phased out and done by robots.

Quoting an Overseas Development Institute report which states that by 2034 it will be cheaper for robots in the US to manufacture furniture than carpenters along Ngong Road, Shah, who is also a consultant at The Cobalt Partners, a business and technology advisory firm, said African policymakers have their work cut out and need to adapt accordingly.

 “I don’t believe policymakers are radical enough in their thinking of how fintech can change the game and how to take advantage of the so many opportunities coming our way through fintech. But also, if we are not careful, by 2034, it will be cheaper for robots to manufacture furniture in the US than it will be on Ngong Road by Kenyans,” Shah said during a policy breakfast meeting organised by Strathmore Business School and Business Advocacy Fund (BAF) to discuss 'Blockchain technology and its impact on Kenya's Economy'.

The breakfast meeting was attended by among others Professor Bitange Ndemo, a member of the National Taskforce on Distributed Ledgers and Artificial Intelligence, who was one of the guest speakers and a host of journalists and delegates.

For far too long, African economies have been as basic as it can get and have become comfortable with exporting raw materials to China and the west only to import the same albeit now processed.

Shah says fintech for production will change the game and it is up to for African countries to adapt or die. Survival for the fittest has never been more relevant than it will be in the next decade.

The World Economic Forum forecasts a net loss of over 5 million jobs in 15 major developed and emerging economies to Artificial Intelligence worldwide by 2020.

One of the many reasons for this is the cost of finance and so what can we do about it? One thing is if we don’t increase funding into research and development our productivity will remain low and our products will become irrelevant," said Shah.

The Kenyan government is among the few countries in the continent which now wants to allocate at least 2% of GDP to research and development (R&D) under the auspices of Vision 2030.

South Korea is the world's leading spender on R&D as a percentage of gross domestic product (GDP). In pure dollar terms, however, the United States is consistently the largest spender on R&D, followed by China and then Japan.

Allocating funds for R&D is, however, easier said than done, R&D is, by its very nature, risky. Traditionally it has relied on grants – often from governments, domestic or foreign, something, Shah pointed out, makes it bureaucratic, characterised by laborious proposals and door-stop monitoring and evaluation (M&E) reports.

So how can fintech make it real-time, or at least more dynamic?

Shah says African governments need a regulatory environment in which financial institutions make it easier for small and medium enterprises (SMEs), the engines of the economy, to access affordable, appropriate products.

With all the data and technology that we have flying around, financial institutions should be offering cheaper, relevant cashflow-based products to SMEs that are producing useful, durable, recyclable stuff – or value,” said Shah.

While the rest of the world is thrilled about the prospects of artificial intelligence (AI) and the endless opportunities that come with it, the cradle of mankind dreads the thought of it and is fighting a losing battle to cling to a redundant technology overtaken by time.

It’s not all gloom and doom though and Africa need not dread the age of robotics and automation, in fact, fintech may be the silver bullet that will finally usher 'Mama Africa' into the 21st century and finally catch up with the rest of the world.

It wouldn’t hurt for African governments for a start to fully understand the advantages and consequences of AI disruption in Africa, and then deliberately respond to AI integration.

There is quite a debate going on globally about this because globally governments have woken up to the fact that a lot of e-commerce is happening and hang on who is getting the taxes? I think Kenyan policymakers need to be at the global table discussing this because e-commerce is global,” said Shah.

Resources are always scarce and even more acute in many African countries but Shah says African governments can source for funds through tried and tested method such as taxation.

My recommendation is tax what you want less of, that is what tax should be about so if you want to tax carbon emission, great if want to stop taxing internet usage great because you want to encourage internet usage,”

By all accounts, it is easier and cheaper to roll out Artificial Intelligence in Africa than in the west, the continent too is blessed with qualities that are the envy of other worlds.

Africa has the youngest population on the planet which is increasingly becoming tech-savvy by the day. Through smart and extensive skills-lead education approach from primary school through university, the African population can be empowered to take on the world.

Take, for example, Roy Allela, a 25-year-old Kenyan who has invented a smart glove that converts sign language movements into audio speech.

More than 30 million people around the globe have speech impairments and must rely on sign language, which poses a language barrier when seeking to communicate with non-sign language users.

Were it not AI there is no way the smart glove would have seen the light of the day and the invention effectively debunks the myth that Africa does not have the intellectual capacity to innovate and lead the fourth industrial revolution from the front.

Even more interesting about Africa is the fact that the continent is like an open canvas ready to be transformed into a masterpiece.

In Africa, there are no obsolete structures that have to be brought down first before one can begin putting up compatible ones.

The barrier in seeking new knowledge sometimes lays in the old knowledge getting in the way of the new one just like Niël Groenewald (NG), the head winemaker at Distell, Africa’s leading wine producer and marketer, since December 2017 aptly put it when we met during a wine tasting event.

“It is sometimes easier to train people who have had no prior knowledge of wine than to train people who have been taught about wine the wrong way, you need to retrain them and it’s not easy,”

It is, therefore, cheaper and far quicker for companies in Africa to adopt smart technologies and create innovations than they can afford to in any other corner of the world.

The good news is that some African governments are starting to wake up to the fact that fintech is the future and have since taken bold steps to seize it.

Take Rwanda for example which, in 2016, signed a deal with Zipline, a drone delivery service that delivers medicine and blood to otherwise difficult-to-reach areas and has put every Rwandan within 30 minutes of life-saving medical supplies.

Keeping in mind that most patients in Africa die as a result of lack of timely access to medical care such as blood and even simple things like a first aid kit, the entry of drones in the medical field is nothing short of revolutionary.

Sub-Saharan Africa successfully harnesses new technologies and creates an emerging vibrant middle class. Right here in Ghana, is Farmerline, an innovative agritech company. It is not only happening in Ghana, and it is not only happening in agriculture. Look for instance at Zipline in Rwanda, which uses drones to deliver blood and medical supplies to remote health facilities,” said Mrs. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), while speaking at the IMF-organised Conference on “The Future of Work in Sub-Saharan Africa” in Accra, Ghana in 2018.

Moreover, rather than displacing employees, machines can actually empower low-skilled workers and equip them to take on more-complex responsibilities. This, in turn, can help meet an urgent need for countries lacking widespread access to education and skills training.

The mining industry will be completely unrecognized as we know it within the next decade.

Mines will within the next five to seven years replace humans with robots, virtual models and sensors, according to Anglo American Plc.

This would not only make the industry efficient and more productive but even more important is it will reduce if not completely eradicate human casualties whenever mines collapse.

The idea of no go-slows and industrial strikes is also very appealing to mining companies, to say the least.

Africa needs in the words of Polish-born scientist and the first woman to be awarded a Nobel Prize, and the only human at that to win two Nobel prizes in two different sciences, Marie Curie, internalize that; “Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less,”

It is high time Africans re-watch Black Panther, which has been nominated by the way for Best Picture of Year at Oscar nominations making it the first superhero film to be nominated for such an award in Hollywood’s cinema history, but only this time watch it more like a documentary of possible factual phenomenal in Africa than another superhero movie.

Africa needs to believe Black Panther paints a far more accurate picture of the continent than ‘the gods must be crazy’.

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