By Paul Ndiho
Internet penetration is growing in many parts of Africa. Although the economy is struggling in Zimbabwe, tech entrepreneurs say investors are jumping in to lay the foundation for what experts say is an untapped market opportunity in the region.
When webdev – a Zimbabwean it startup opened here just over 10 years ago, its founders never expected things would go well as they have. Hyper-inflation in Zimbabwe was at an all-time high and the international monetary fund estimated that it peaked at 500 billion percent in December 2008.
But perhaps one can argue that webdev was at the right place, at the right time and it developed into a successful technology solutions business just as Zimbabwe was emerging from an economic crisis.
Today the organization is one of the leading it firms in the country. Webdev runs four businesses – Zimbabwe’s first online payment solution – pay now, custom software development, web hosting and their most profitable venture is an online classifieds platform. Vusi Ndebele is one of the company’s directors.
“Our target market is very much dependent on which of the businesses we are talking about, we have our largest public facing business which is the classifieds business. It’s a double-sided business model, so our aim as classifieds.co.zw is to provide a platform whereby consumers and businesses can search for products and services that they need or want on the internet.”
The value of business generated online in Zimbabwe is worth over 500 million U.S. Dollars annually as internet penetration grows, buoyed by mobile phone penetration, which is around 40 percent, according to technology commentator, Techzim.
The revenue comes from social network advertising, e-commerce, online ventures led by Zimbabweans in the diaspora and foreign entrepreneurs.
Markets like Nigeria, South Africa and Kenya lead the way in tech business growth in Africa. But for webdev, their focus is on tapping new streams of revenue in places like Zambia and Botswana where they can grow and improve the customer experience.
“We enjoyed a lot of success when the economy could sustain the development of such big solutions. As the economic activity has kind of faulted in Zimbabwe, we are seeing less of those big projects coming to us for custom software development,”
Independent economists say less than 20 percent of Zimbabwe’s residents are in formal employment and economic growth is flat lining due to shortages of electricity and capital. For many citizens, the only options for survival are petty trading or chancing it as an illegal worker in neighboring South Africa. Forced to play catch up on development issues, many engineers hope Africa can jump to the front of the technology revolution. Internet analyst Limbikani Makani says the time to invest in Zimbabwe’s tech startups is now.
“I think it’s a good opportunity now, I think for people that come in now into Zimbabwe and invest into startups are able to invest into startups at a learning phase, but also at a very low cost phase,” he added.
Ndebele says the tech market will benefit from a concentration of skills and resources on particular needs in the market.
“As technology providers, I believe that we can do better and i think where we are right now although we have a bright future with a lot of the young entrepreneurs that are coming into the space; we still have the issue of specialization in Zimbabwe. Everybody is a generalist because we have needed to survive tough economic times,”
Zimbabwe is currently rolling out its fiber cable, which is primarily allowing residents of the capital, Harare, an opportunity to connect to the internet. But, the economic conditions in the country mean that the profits from internet businesses are not likely to reach the masses for years.
By Paul Ndiho