>> From the Library of Congress in Washington D.C.
[ Pause ]
>> East Reading Room and Division I'm Mary-Jane Deeb,
Chief of the Division and I'm delighted to see you.
Our division holds programs regularly organized
from our three different sections.
So we have the African section which is hosting the program today,
we have the Hebraic section and the Near East section,
and the three sections have collections in this division as well
as in other parts of the library.
We have specialists with the knowledge of the languages.
We have readers and patrons who come from our 77 countries
to this reading room and we're always delighted
to have researchers, patrons, and visiting guests join us on programs
to inform us about what is happening in those countries.
We like to share not only our analogue collections,
our digital collections, but also we like to share with you the people
who visit us and who talk about the work they're doing,
the research they're doing and their knowledge of the countries
that we're covering and it is- - we're delighted today
to have Mr. Kwabena Addo who will be talking about a region of the world
that he knows very well and he's been working on for a number
of years, and he will be shedding light on a topic
that we don't often discuss in- -
with respect to the countries of this division.
But I don't want to reveal too much before Eve Ferguson,
our East Africa Reference Librarian who invited Mr. Addo
to join us will be making the introductions and so again,
thank you and Eve will take on- - take over.

>> Thank you.
Good afternoon and welcome to the African sections program.
The Impact of Mobile Technology and Telephony on job and wealth creation
in East Africa, a lesson for the rest of Africa you'll see
that the title up there is a little bit different.
Please be informed that this program is being Webcast for later viewing
on the LOC website and also on the AMED webpage.
So often when we pick up our cellphones we do it as a convenience
and an extension of the luxuries that we're privy to.
Rarely do we think about what mobile technology means
for developing nations especially those where land lines
and available phone service is not a given.
Today, we'll hear something on that topic along
with other important information about how these things that we take
for granted serve a vital role elsewhere especially in Africa.
We are fortunate to have our speaker today, Mr. James Kwabena Addo
with us not only because we narrowly averted a shutdown,
but because he currently resides in Cape Town, South Africa and is
in Washington for a short time.
James Addo is an experienced investment banker with a specialty
in private equity and venture capital opportunities.
He has a multiyear experience in establishing
and managing development finance programs
in six sub-Saharan African countries where his focus is financials,
infrastructure and technology with an increasing emphasis
on renewable energy in technology driven resource transactions.
He currently manages his own private equity advisory firm focusing
on early stage venture acquisition and expansion financing for frontier
in emerging market clients.
He previously served as group CEO of Securities Africa Limited and prior
to that he was a portfolio manager of Finch African Fund.
He has also worked in Nigeria, Namibia, Uganda, Liberia,
Zambia and Angola as country Director in Regional Trade
and Investment Adviser
for the United States African Development Foundation better known
as USADF where he established the first country representative offices
in Trade Investment Programs.
James Addo received his BA from Dartmouth College
and he received his MBA from the Frank Zarb School
of Business Hofstra University in New York.
Please help me welcome, J. Kwabena Addo.
Thank you.   [ Applause ]

>> Thank you very much Eve, thank you Maryann.
When I was first asked to present on this my initial take was to reflect
on really the impact of mobile technology on all of Africa
and the challenge that I had was to draw the experience of East Africa,
[pause] thank you- - to you know, to draw lessons from that
and see how inapplicable they were to West Africa
to Western Southern Africa and Northern Africa.
It turns out that I didn't have much, you know I didn't have far
to go simply because, you know, embedded in our culture, I'm,
you know, Ghanaian by birth.
We've had financial systems from, you know, from they were from things
like susu, savings pools, how we trade you know with each other,
barter trade and so converting that sort of cultural technology
and overlaying it with, you know with any sort of new technology
that actually expedites it all, you know makes it an easier process,
didn't seem so challenging and I hope that you share that you know
with me as I walk through this presentation today.
Okay. I just wanna share a few facts with you about the space.

There're about 2 billion telephone users outside of the US and Europe,
and out of that about 700 million are in Africa
and one study actually shows that the more cellphones you put
in the hands of Africans, the higher their economic growth is.
In fact, one study went as far as to, you know to quantify
that at 1.2 percentage points of GDP growth.
This is supported by a growth rate in the penetration rate for Africa
in cellphones of 35 percent over the past 10 years.
This is the average and also the, you know the fact
that over the past 8 years we've seen six landing points
for fiber optics in Africa with 2 remaining
from I think the West inside of Africa.
I'll share, you know, more about that.
The road infrastructure, I've seen
about 30 billion dollars in investments.
It's grown about three times over the past 10 years.
By 3, I'm referring to main roads, highways, even some feeder roads
and I think you know, you know the urban networks have also
been improved.
I think the very last point in an access, one could toy would,
you know, with that number a bit but over the past 10 years its averaged
between 30 and 40 percent.
During the years of 2001 to 2003 was when it saw its highest growth rate.
It's about 52 percent.
Okay. Perhaps, we should define mobile money, mobile banking
with just the primary use of mobile telephony in Africa today.
It's defined as a tool that allows individuals
to make financial transactions using the cellphones
and the history has been that in Japan, I think the- -
Japan had a there's a name for it, years ago they came
up with the first mobile telephony but it was, you know,
it was sort of an early version of a web-based program
and it was limited primarily to the, you know, middle to upper class.
And it was you know much high value transactions.
Over the years, Vodafone of the UK
which owns a significant share holding
and a company called Safaricom in East Africa proposed that they would
like to set this up, a mobile payment system,
you know, for Africa SMS-based.
So, they brought in the British Development agency, DFID,
to provide grants to deliver a pilot.
And in 2007, Safaricom launched its first mass market money transfer
by text service they called it M-Pesa, which is a Swahili term.
M for mobile and you know, Pesa which is the Swahili term for money.
It's also grown rapidly because it was initially targeted
at the bottom of the pyramid.
It enabled people to engage in paying for taxi rides, paying for,
you know, you know even making payments as little
as 1.2 dollars you know, a dollar 20 bucks.
M-Pesa now is in the hands of about 14 million people out of a market
of about 17.2 million Kenyans.
Now, what M-Pesa has done for the region East Africa is
that it's enabled significant amounts of people
who hitherto had no access to any form of accessing, you know,
easy money, moving money across, making payments,
or even getting basic information on crops.
And today, it accounts for roughly about 70 percent
of all the financial transactions outside of banks.
In East Africa, Kenya, this is as of 2009 ending, only 19 percent
of the population was actually banked and M-Pesa picked
up the 70 percent of the read portion there which you know
in Kenya you know was quite as significant event
because suddenly you have people who even though they didn't have access
to bank accounts they could actually transact and do business, you know.
Commerce took all the volatility of the velocity of, you know,
money you know went through the roof.
Again, here you know you see an illustration of really
where M-Pesa took off between September of 09 and September
of 2010 to show a significant boost in the impact, based on, you know,
on M-Pesa and I think , actually this is more the subscription
of cellphones, but M-Pesa accounts for 70 percent of this.
Okay. So between you know within a year you have roughly
about 36 percent jobs in use.
It's gotten so popular, it's ahm- -it has a high usage
than these financial data cards that I use, you know,
that are issued by local banks.
In fact, you know, roughly more than twice as of September of last year
and it is projected to grow by about 3 times
that in the next couple of years.
In fact, it is envisioned to grow to 3 perc- - ahm two thirds, I'm sorry.
Three times the size of issued financial cards by the year 2014.
The key players in the mobile market tree today.
Safaricom which represents the incubus
of all mobile banking globally actually,
maintains a very dominant position in East Africa.
They, you know, are being pursued by the likes of MTN which is one
of the largest mobile companies in Africa today, who you know - -
they have come up with this thing called mobile money and they're
in the process of rolling it out over, you know, the next two years
across all their markets.
Obopay which is used by Citibank here, but it's US based
out of California and they're- - and they're currently rolling
out in Nigeria, obviously in the US and in the India markets.

The impact of all these and I guess maybe I should just, you know,
walk through this a bit because there're two sides of this.
First, very, very specific to the country and the region,
you know the obvious gains you know to individuals and businesses just
in terms of the time it takes them to get things done
and we make insist from all over in and out of the region.
And then the, the sheer empowerment of, you know of the bottom
of the pyramid crowd who typically have no access to credit, you know,
any form of financing that actually gives them a significant, you know,
tool with which to you know, to become relevant
and the 4 th pillar point which is very near and dear
to me is the empowerment of women.
Being Ghanaian, when I was being, you know, brought up it was very,
very powerful, you know, evident to me,
the impact of our mothers in our families.
I think without a mothers frankly, you know,
most of us wouldn't have gone to where we are today you know
to be very honest, you know, we tend to fight with them, you know,
a lot as we grow but deep down we know that they have been the rock,
they have been the engines that have gotten us here.
So, when I see, you know, you know having bred that, you know,
the impact and seen actually of what mobile banking does for women
and their, you know, and their small businesses
and also the security that it gives them.
You know, that was, you know, really very touching for me.
It also improves foreign direct investment simply
because the more you see, you know the velocity of money you know
from a foreign investor perspective it becomes easier
to make certain predictions with respect to the investments.
Micro and small enterprises also have, you know have access
to these [stammers] types of services through the M-Pesa.
Because M-Pesa is not just for, you know, individuals.
You can actually sign up as a small business.
There is the, you know the increase commerce that you know
that occurs between, and you know within came members of East Africa
as really what has, I think,
to my mind made it probably the most receptive environment
to private equity today simply because business have,
you know have better control over the cash flows,
they've better controls over the payment systems,
the cost of doing business making payments is actually much,
much lower.
And of course the last impact which is very near and dear
to all of us is job creation.
I think my last tour with ADF was in Liberia where we were charged
with stabilizing a post conflict environment and one
of the key objectives of the program was to create as many jobs
as you know possible, because you know- -you know,
the most secure an ex-fighter is with respect to his source
of income, you know, that its likely it is that they will go back
to what they were doing prior to the peace agreement.
So you know it's a very critical piece and the fact that the mobile,
you know, payment system is a huge driver of job, you know creation.


We will look at more at the broader aspects of it,
you know across the continent.
I think, you know, the first point which obviously we know
from the emergence and success of microfinance is
that there's a huge base that has very little access
to financial services and mobile banking provides this.
And I think, you know for this 690, you know, 600 million people
on who can actually have access to this will,
you know will make a it a lot of sense - -
I'm a little thirsty, sorry.   [ Pause ]

>> Nice glass.
The typical market segment that mobile,
you know mobile banking makes the most impact
on typically earns less than 9,000 bucks a year.
This number sounds odd and a bit high and the reason it is,
is because I have taken, you know, a broad sort of a broad stroke
across most markets inclusive of markets like in Namibia and Botswana
and those countries you know tend to skew up the curve a bit,
but broadly you know it's about 9,000 across the continent.
Banking, you know, mobile telephony also creates as I think,
I spoke about this already, you know significant economic growth,
as well as commerce, jobs.
I spoke about the velocity of money and it encourages non-cash payments
which promotes the safety, personal safety as well
as the safety of transactions.
I'm gonna cover today where you know Africa is,
because really now I've given you in a nutshell a quick- - no, no,
not a nutshell what mobile banking has done
for East Africa and the effects it has.
I'm gonna try and stretch that across the continent
because I feel that, you know, as a continent you know several
of the practices in Africa are roughly the same.
When you take the migration from Nilo-Saharan back in, you know,
can't remember which century it was, Eastern Nigeria were they migrated
and actually broke down into 22 different groups, the Bantu tribes.
The practices that they picked up from West Africa,
you know roughly it's the same and having lived in those,
you know in all those countries there is you know
that certain ways that, you know you have picked for instance meat
across African is roughly the same.
In deep darkest West Africa, anum [phonetic] which is meat is the same
as nyama in I'm sorry in West Africa is the same as nyama
in East Africa and South Africa.
The foods are, you know, roughly the same.
In West Africa you have Jeloff which is a mixture of rice
and sauces and stuff like that.
When you head all the way out East they have dishes
which you know are very,
very similar in taste and, you know texture.
And then, things like the morning diet you know it's typically
porraige, you know, very starchy that's remained consistent,
you know throughout.
And so this you know these practices, you know were also,
you know mimicked on the commerce side where you know a lot
of countries engaged in susu- - ah cultures engaged in susu practices
where because there were on banks
in those days they save among themselves.
You know, they picked an elder, and they saved and you know,
depending on who's turn it was, you know, they drew down on it.
I think, susu existed way before Grameen Bank came.
Grameen Bank, when you really study the revenue model it is based on,
you know, on the susu model except that, you know it's more formalized
and you know and there're lot more I guess internal controls.
And so these things actually existed.
Let's look at the, you know, the current infrastructure, okay.
We've seen a 3 fold increase in roads and the like.
We've seen 6 new landing points for fabric cables.
We've seen improved internet access
and the mobile networks are also very vastly improved.
Here's a schematic of where we are in terms of the fiber
and you see East Africa where they have the ease system that's
landed already.
South Africa has got its own, all along the coast of Western
and Northern Africa all the way into the Mediterranean.
They've all had new landing points.
So, in terms of bandwidth that infrastructure,
you know is in place already.
This is as recent as 25th of March of this year.
I think I went back, I'm sorry.   Okay, yeah.

As I spoke about, you know African is an endowed with a preexisting,
you know, culture of financial bookkeeping and susu.
We, you know, we've engaged in barter trade already.
We have credit systems already in place during the back, you know,
the old days through, you know borrowing and lending of livestock.
And all this happened without the benefit of, you know, bank accounts.
So I guess my point really is with all this in place,
brining in technology that makes it a lot easier and I spoke to,
you know, I was speaking to you know the head
of the library about this earlier.   It allows the continent

to take what's called a telescopic lead, okay.
We don't have to go through the same learning process
and the growing pains as others have.
It's a lot easier to learn from what you know from previous experience
and actually pick and choose what's relevant to our environment.
And in this particular case, I think with the,
you know with the existence of infrastructure and the preexistence
of our cultures which you know,
which already recognize credit systems, and cash, you know
and barter trade brining in mobile telephony will create a much more
rapid, in my view transformation of economies.
Create more jobs, grow the GDP, empower you know the poor,
and in the end actually make our financial you know systems a whole
lot bigger and better.   And that's it.

Thank you.   [ Applause ]

>> Okay.   >> Questions?

>> We can open it up to questions
and Mary Jane gets the first question.
>> Thank you very much.
This is a very exciting subject so I would like to include
in here you're grouping about the subject.
I wanted to ask you did you in your frequency samples,
you talked about women and telephony.
>> Yeah.   >> And can you elaborate?

Give us examples of how that has helped women, specifically.
>> Of course, of course.
You know we can go down to sort of the cooperative level, okay.
And I know in Namibia where I spent time, we have illustration

where we had retired women,
grandmothers who ADF had actually funded to engage
and this is a serious matter, engage in brick making, okay.
Not brick as in a small brick but block making.
There was something wrong with that picture because you had, you know,
much older women doing this.
I was, you know, we went through the whole process of, you know,
changing that, you know bringing in younger people
but I went back a few years, oh actually a few months ago,
November of last year and what I [stummers] discovered was
that the advent of mobile phones had actually allowed them
to now not just produce bricks through their younger sort of team
but actually get a sense of what the, you know,
because Namibia is going through a building boom.
What they would get for their bricks you know based on the bidding
that went on between contractors and you know
in the northern part of Namibia.
For those who don't know Namibia very well it's divided
into - - -divided into 2.
There is the part above this imaginary red line which has,
you know, the northern part which has malaria they say
and the cattle is bad, its sick [inaudible]
but it also houses the majority of you know, of Namibians there.
And in the past 5 years it's experienced a boom in construction
and the like because all of a sudden,
you know the red line doesn't exist anymore and so
because the boom occurred so suddenly the indigenous went out,
you know, really quick to actually you know take advantage of it.
And so what, you know, what my successor at, you know,
at ADF you know they've been engaged
in was they basically helped these groups that we funded before
through what we know, we have what's called a reinvestment grant
where each investment we make has
to pay back some funds you know into a local pool.
They've used these funds to help these groups now actually,
take on technologies that you know,
that make their projects more viable without, you know,
ADF obligating more funds.
And what I saw with these group was that they, you know,
they use they have a significant use of mobile technology
to actually get [stummers] information.
And so that's one example, in terms of Kenya and this, you know,
I find out through my research.
You have you know market women who basically sell in town
and for them having to carry money home in cash after their sales is,
you know, is a major issue.
Kenya has about 19,000 agents, M-Pesa agents and they're you know,
they're all stationed in you know places that make sense
for you know, for the market people.
So, you get a case where you have a group you know market women
who have a credit card, you know, with an agent.
So paying them cash directly, you actually pay, you know to the agent
and they get, you know, a credit on their phones.
It's a whole lot easier because then they would just you know carry their
electronic money on their phones.
And I think, you know that improves the safety issues for them, I think.
You know, it also gives them a sense of accumulating funds somewhere
without you know having to- - because you know like, I mean,
if they're anything like me if I have cash on me
and a demand hits you, you know you're spending you know.
We're all very human in that sense
and so it gives them a much greater sense of you know,
financial security with respect to planning and you know,
just [inaudible] so those will be, you know,
2 examples that I can give I hope they're adequate.
Yeah.   >> I have a comment.

You talked about susu.   >> Yeah.

>> Well its thriving in the United States.
A lot of [inaudible] because of susu.
Latin Americans, [inaudible], Indian [inaudible] susu.
>> That's right.
>> So not just the African [inaudible]
>> Oh, I agree with that actually.   Actually, you're right but you know,

all the groups you mentioned actually are not real
Americans [laughs].
>> No they're not, but since that everybody thinks
of susu they're probably aiming to get a large sum
of money and start a business.
There's a lot of Africans trying to get started.
>> Absolutely, absolutely.   [ Inaudible Remark ]

>> Yeah, that's susu list- - [laughs]
>> I'm sorry?   Susu?

[ Laughter ]
>> Susu is a system of pulling money among,
along either you know cultural lines,
friendship lines, or just business lines.
Historically it's been along cultural lines, you know people
who know each other or are from the same ethnic group et cetera.
You know, families.
You know sometimes they pool money as a way to ensure
that where you know, which ever part you know part
of there circle is most needy or has the most potential
to generate money you know to actually support them.

>> S-u-s-u [inaudible].   >> Yes. S-u-s-u.

That's what they are.   It's quite common actually.

It's quite common globally.   Yes.

[ Inaudible Question ]   >> I'm sorry?

[ Inaudible ]   >> Foundation.

>> [Inaudible] cellphone industry?
>> We have done projects that cover- - we have,
we've actually done grants in I think Zambia and Tanzania
that have - - yes Tanzania and Zimbabwe, sorry.
You know, before its sanctions that dealt with paprika, okay.
And the eternality from the investments were, you know were put
into a, into a cellphone you know cellphone use, cellphone pooling,
prices, you know pricing.   Also in- -was it Liberia or Nigeria?

One of the countries that I was in we brought in a milling plant
for them, you know, to mill a grain and part of the budgeting looked
at how they could actually discover pricing and we toyed with the idea
of you know cellphones, but you know I left before it was implemented.
[ Inaudible Question ]   >> I'm sorry.

[ Inaudible ]
>> Typically they all have cellphones already
because you know I mean you can get a cellphone now for the equivalent
of about, you know, 10 bucks.
And in a lot of cases in the really rural areas you can buy them
on credit, you know and just pay as you go.
You know, yes.
>> You talked about infrastructure and [inaudible] finances.
>> Yeah.
>> It's more of an international aspect,
which could probably the internet
or global [inaudible] last mile aspects.
>> Very good.
>> Where ever rural areas they have cellphones, in all [inaudible]
but they have time to get there,
questionable is how long should battery
or satellite or what [inaudible].
>> Okay up so about 3 years ago most I think countries were using V-sat
which is very expensive, it's very short aperture technology
and you know with the onset of fiber wave,
a lot of you know countries have actually built their own networks
and internally these cellphone companies have also invested in it
because for them it made sense to put down that kind of, you know,
capital cost and just you know get their money through the use.
They lease it out to big companies, you know, mining firms.
You know like I said a lot of it was also driven by,
you know by the big resource firms there.
You know, they were prepared to actually pay
for this, you know for this.
They're the kind of contracts that they would sign
with a mobile firm would justify
than laying internal fiber last mile, okay.
Then the 3rd aspect of the solution has been microwave as the backup
so there's significant connectivity you know there's lot of,
you know coverage.
Kenya for instance, so far it covers 97.3 percent
of the country, which is huge.
DRC there's a, they have what's called a WiFi, sorry WiMAX.
Yeah, they have WiMAX E I think which the most,
you know it's the technology before LTE
which is being deployed there now between Bas-Congo, Kinshasa
and the Lubumbashi, you know where the mines are.
So there's a lot going on.   Angola, now -- Angola is providing,

Angola and Zambia you know are providing DRC, you know parts
of the DRC with fiber access well there's it has been built out.
Angola has a huge pipe, you know, a huge fibro pipeline in country.
Zambia has you know has it also and so what, you know,
the DRC did was they paid them
about 30 million bucks to be connected well.
While they're internal sort of network was being built.
There's quite a bit you know, going on in this phase.
>> When you use the technology of V-Sat,
do you use satellite navigation?   >> Yes.

>> Does the fiber provide [inaudible] broadband
[simultaneous talking].
>>Yes fibro provides you with more consistency you know, with V-Sat,
this very expensive one and two you're relying
on you know wholesale producers and their pricing changes in every now
and then and also it's not very consistent.
If its, you know, if it's Z-band you know you get weather issues,
you know.   So it was much, much easier

to just get something you know on the ground.
You know, which gave you a huge bandwidth, you know.
Yes.   [ Inaudible Question ]

>> A very good question.
Because right now the bank of, the bank of Kenya, the Central Bank
of Kenya is coming up with legislation to regulate the M-Pesa.
And so this has been, you know, business- -
what the cellphone companies are doing is they, you know,
they merely partnering now with banks just to take away that risk.
So Safaricom has now partnered
with Kenya's largest micro finance bank, Equity Bank.
Okay, so that takes away, you know, their regulatory headache, okay.
And that's what's happening now and MTN is looking
at doing the same thing with Standard Bank and you know, Obopay,
they're already with Citibank.
So you know, I mean the businesses are anticipating you know the risks
to this huge sort of opportunity.   [ Inaudible Remark ]

>> Well, okay see.
With, you know with M-Pesa you can have a saver's account
without a bank because you have all of these you know agents
and then you have this phone.
There is an, you know there's a built in,
you know interest payment system that you know that they have.
First you know the agent gets a fee and within you know,
Safaricom cannot take deposits
because you know it's not a bank, right?
But the agents, they can create a virtual savings, you know,
a savings account for you and they have little systems
where people actually create their own markets
where you know they have, you know,
their own cost of capital and the like.
So you know that's already happening.
I think that's what has gotten the Bank of Kenya very concerned
because you have non-bank guys actually you know,
taking the deposit and I think that's hurting them a bit.
Yeah.
>> So going forward, could we assume that banks will find
to study the growth of mobile technology because it does
in some way compete with their business?
>> Good question.
Since the crisis to, you know, oil crisis.
You know the buzzle 2, buzzle 3,
now there's you know there's a commitment
to all banks just focusing on banking only.
So as a bank you can't own brokerage anymore,
you can't go into insurance,
you know there's a clear move you know to that.
Even in the U.S. now actually this is being discussed.
In the U.K. they just you know, they just announced
that as a bank you clearly have you know separate these two,
you know these 2 things.
You can't own a brokerage business and put you know,
retail money at risk anymore.   So that's all changing.

Nigeria has far been the most [inaudible] where Sansusi has said,
unless it's pure banking, get out of it.
So he, you know, there's been sort of a complete disintegration,
you know from the wholesale banks now.
So the point really is that a bank cannot get into the, you know,
mobile business that's out, okay.
However, a bank can partner and have the transfer portion outsourced
to them.
That's where, you know they can make money.
Okay. It serves 2 purposes.
One, you know, the bank makes money and 2, the mobile guy gets rid
of the headache from the Central Bank, you know.
>> And just to kind of extend that question, what is
[ inaudible ]
you talk about China is in a lot of us you know
about what's going on now   [ inaudible ]

to and all aspects of African business.
Do you see emergence of China coming into make a profit
or take advantage of mobile technology?
>> China mobile which a lot of us fear is you know, owned by you know
by the government you know but the Chinese government.
They have their own mobile technology.
You also remember you know China's mobile market is --
is the biggest in the world and for them I think going into the,
you know the external markers now outside of the U.S.
and Europe is probably you know not a major priority.
I mean, I haven't seen any real Chinese accusations
of African entities yet, okay.
I've seen Indian and not African but you know,
okay simply because they're penetration rates is about you know,
40 percent and still growing.
It's growing at a huge cliff and so there's significant growth there
and so my personal assessment is
that I don't see it you know it as a threat.
I don't see Chinese investment into African telecoms as a major threat.
I think the UK and the Americans have a huge hold on that
and that's not gonna away anytime soon.
'Cause you know if [stummers] you look
at it unless the Chinese capital markets become the dominant you
know, capital market.
Most telecom companies like to raise money and you go
to the most liquid market, you know, possible.
There's the US, UK, and everywhere else, so unless that happens,
what's the real use in having a Chinese shareholder
as an African you know telecom.
That's really sort of you know, yeah.
Okay. Yes?
>> [Inaudible] and also do you have any numbers on platforms?
I mean [inaudible] do you have any numbers on that
or do you have a sense of [inaudible] computer web platforms?
>> Right, right.
iPads you know -- you speaking to platforms not hardware, right?
>> Yeah, like operating system like [simultaneous talking].
>> Okay, okay.   Got it. Got it.


The way the sale industry operates in Africa typically you buy,
you know most people buy their phones unlocked, completely new
and so you know whichever phone, you know the kind
of phone will determine what kind of service is on it.
You know Apple is about 16 percent of the market so if you,
if you're buying you know an iPad or you know or an iPhone you can
or you're getting android as the I guess the majority on you know
in the market simply because most people aren't buying you know Apple,
you know Apples.
We've had, we're having this discussed with respect
to the you know, the platform and the application also I think,
the understanding in the you know the market's perception is
that you know Africa will probably move beyond apps simply because,
you know for all the hoopla is it's actually a passing issue.
I mean it'll pass you know reasonably quickly I mean.
There about you know there about half a million apps out there.
There's no way you or I can actually go through a 10th of them.
So, I mean you know in all for all intents and purposes,
it'll pass soon, you know, as a fad.
If you core apps you know will remain, weather, news maybe,
you know, Reuters, you know, Bloomberg IM,
but everything else you know will pass
and the you know the markets bet is that, that you know this whole phase
with apps, you know we wont' see it in Africa
because it's really superfluous.   We wanna you know, we want a phone

that has this very stable you know operating system
that can do transactions you know, pay bills, receive money,
you know check the weather, horoscopes,
soccer, big those basics.   So you know I mean it's kinda

like you know the smart phone thing may miss Africa.
Of course there's an elite 7 percent of you know of Africans
who always buy these things.
And so you know, there's a market for that.
Yeah.
>> Really I have a question about, if you may or may not be able
to speak to it but because a continent has benefitted
from fiberoptic technology, what does that mean
for Indian Ocean islands?
I know for instance in- - > Good question.
>> Madagascar it's financial spirit
like making transactions has been very tenuous because they have
to make cash transactions
and you know there's high chances somebody will get robbed
of their money after they finish selling their zebra or whatever.
>> Right.
>> So how does that affect the outline forces of Africa
that may not be service effective?   >> Actually, there are.

You know because Mauritius, Madagascar and Seychelles have,
you know, have a unique function in Africa.
They serve as the intermediary financial centers.
Mauritius is a huge financial center.
You know, I mean as a PE guy, we set up SPV's in Mauritius
because special purpose vehicles because you know,
Mauritius they have laws which you know,
they have what you call IP agreements,
investor operation agreements with most Africans countries
which make a lot of sense in that as an investor,
even if I was a Ghanaian investing in Ghana,
I would go through Mauritius, why?
Because, I wanna take advantage of the agreements.
By virtue of the fact that they have very robust financial systems,
they have these, you know,
these agreements they have become a part of it.
So if you look at this map for instance,
Madagascar is you know connected, you know just on GP.
Mauritius is Seychelles' and you know they're all there.
So, I mean they are not out of it at all.
You know, prior to the big bandwidth coming in they had V-Sat.
They've always been very [inaudible] to the continent, you know.
Also Africa has a huge Indian population.
Okay, they do all their banking out of Mauritius.
So it's a very important place for them.
Madagascar is as you know is the world capital for vanilla.
So you know there's still quite a bit of [inaudible]
and Seychelles you know is the tourist spot
for the Brad Pitts of [inaudible] [laughs].

Yes.   >> Yes?

>> And so clearing up on this, how much business is to be done
on this phone with outside groups let say in India or in Asia or any
of these or in other places.   >> Okay.

>> Are this going to be done internally, within the countries- -
>> Actually, no.
>> Or are they used internationally as well?
>> For trade international I'm not so sure if they're there yet because
in national trade because it's faceless.
You may need you know need a trust institution like a bank.
But Western Union so the remittance trade
that runs 63 billion dollar remittance trade, a good portion
of this is done on phones now.
You know which is another reason why, you know,
the banks are now inclined to regulate
because you know you don't know where the funds are coming from
or where they're going anymore.
And so yes, so a good you know between 10
and 20 billion dollars a year is done on phones now.
You know in the Eastern and in fact in Nigeria also now.
It's quite a big business.   Yes.

>> In fact I've got a question about governments and their support
of this because well we know get a lot
of small pirates use mobile technology
to move their money once they received their ransom money
and be able to move around the country so are there efforts,
I mean on most governments in support
of increased cellphone technology
or are they also seeing some of the caveats?
>> Most comments are in support of increased regulation
of cellphone banking, okay.   And you know as I said earlier this,

this smarter market leaders are taking the step already
and just partner on a bank so that you know,
there's some regulated transparency.   You know in terms of the wires.

You only, the only question mark is the Western Union side.
But I think Western Union is still regulated here
that you know it'll be easy to actually trace where,
you know, funds are going.   Yeah. Yes.

I'm sorry.
>> You talked about the banking regulation,
[inaudible] infrastructure need to go externally?
Is there any government regulation going


>> I'm sorry, you're question is?
>> Are [inaudible] infrastructure needing
to go externally [inaudible] interest?
Is there any type of regulation that is being enforced
by the African government [inaudible]?
>> Well ICC, I mean that's regulated
by the international telecommunications union, ITTU.
So you know they have their own set of rules and regs also
within every country the National Communications Commission you know
agency has to agree and contribute to the you know
and I assume you are speaking to this fiber network outside.
[ Inaudible Remark ]
>> I guess I don't understand the question
when you say external what do you mean?
>> Well primarily your mobile phones, your fiberoptics
and also this is kind of [inaudible].
>> Okay.   [ Inaudible Remark ]

>> Okay, okay good.
With respect to cellphones the physical,
you know item that's an import.
There you know there're already existing rules around that import
and technology that you know duties around that
so that's you know that's well taken care of.
With the fiber that is a joint effort the governments, you know,
no government in the world will allow a foreign entity
to come in and just plug in.
It has be coordinated, there has to be you know landing point,
termination, equipment, you know the whole works.
You know the national telecommunications guys you know
have to be involved.
So it's a whole process and so it's although,
I think its manufactured outside you know the handsets form part
of the international trade value chain you know
in any way sort of this supply chain.
And the fiber that's clearly based on you know, bilateral and you know-
- you know most lateral arrangements.
So you know there's this built in you know,
regulation already it's not- - yeah.   >> Any other questions?

Okay if there're no further questions I'd like to thank you
for coming and thank our speaker for coming and spending his time
and sharing his knowledge with us.   And we look forward to seeing you

at the next African Middle Eastern Innovation program
which I believe is, tomorrow.   [ Laughter ]

>> So please help me thank Mr. J. Kwabena Addo for his presentation.
Thank you.   >> Thank you.

[ Applause ]   [ Silence ]

>> This has been a presentation of the Library of Congress.