This article was first published in the November 2015 international edition of Accounting and Business magazine.

A new wave of innovative solutions is emerging across Africa. These innovations are making people’s lives better and moving the continent forward. They are driven by megatrends, impacting businesses, the economy and individuals alike, while playing a key role in Africa’s growth and development.

This new wave of innovative solutions did not just happen by accident; the continent took many baby steps before it eventually gained its rhythm. A combination of ingenious improvisation and the myriad challenges bedevilling the continent has brought about these innovative solutions.

The African Union is an organisation that aims to accelerate and promote cooperation among African countries. It also sees innovation as a key tool for the future advancement of the continent. Its initiative, Agenda 2063, aims to help Africa to turn its opportunities into strengths. One of the major areas the initiative aims to explore is the use of innovation as a major driver and enabler in achieving the development goals of African countries.

The e-wallet in Nigeria

This is a story of how the Nigerian government used technology to clean up an agricultural sector that was hampered by corruption, inefficiency and red tape. Before the introduction of the e-wallet system, Nigerian farmers couldn’t buy fertilisers (plant nutrients) directly from producers; the government procured the fertilisers and sold them to distributors at subsidised prices with the expectation that the subsidies would be passed on to the farmers. Sadly, the distributors and unscrupulous middlemen engaged in profiteering to the detriment of the farmers.

The Nigerian government was able to curb and control this sector through the innovative efforts of its then minister of agriculture, Akinwumi Adesina. He developed the Growth Enhancement Support Scheme, otherwise known as the e-wallet system. This system allows farmers to access fertiliser subsidies directly by using their mobile phones. It completely cuts out middlemen and distributors – farmers simply use their mobile phones to trade and conduct transactions at the touch of a button.

This simple and innovative solution is reinvigorating Nigeria’s agricultural sector, and Nigerians can once again look forward to a return to the heady days of the 1960s, when the country was one of Africa’s agricultural powerhouses and enjoyed fine prospects. Innovative solutions like the e-wallet system that cut costs and boost productivity are particularly welcome in agriculture because the sector is so critical to the growth of Africa’s most populous country.

According to World Bank data, agriculture accounts for 21% of Nigeria’s GDP; and, according to the National Bureau of Statistics, the sector is the country’s largest employer of labour.

M-Pesa in Kenya

M-Pesa is similar to the e-wallet system in Nigeria, but came into existence much earlier. The similarity lies in the use of mobile phone technology for financial transactions. M-Pesa uses mobile phone platforms as a money transfer and microfinancing tool. The concept started in Kenya and has since been adopted in other countries including Afghanistan, India, South Africa and Romania, making it an African success story.

M-Pesa lets users pay, receive and transfer money via a mobile phone. Its popularity skyrocketed as mobile phones became ubiquitous and permeated the hinterland. Users sign up to M-Pesa by initially depositing cash with one of the agents for Kenyan mobile phone network Safaricom, who are spread across the country. With money in their account, users can then transfer funds, pay bills and conduct many financial transactions on their phones.

M-Pesa is so successful because it has many factors in its favour. For example, users don’t incur the exorbitant money transfer charges made by conventional banks, and it is simple and convenient to use. Although it attracted some hostility from conventional banks, which argued that this kind of non-branch banking added to financial instability within the system, it has gone from strength to strength.

Waste in West Africa

Nigeria’s Lagos State contains the country’s biggest urban area – the mega city of Lagos, with a population of over 17 million people. It has ageing infrastructure and faces a major challenge in the area of waste management. Given its very high population density and decaying infrastructure, the state is facing an urban waste crisis.

The government agency responsible for dealing with the problem is Lagos Waste Management Authority (LAWMA). In September 2014, it predicted that the per capita solid waste generated every day in Lagos State will increase from 0.5kg to 0.7kg in the next five years, further exacerbating the strain on the system.

Private companies are getting involved. A start-up company called Wecyclers has developed a solution that lets low-income communities capture value from their waste through recycling. Its business model is to incentivise people in such communities to recycle their waste. The company has gained lots of traction within a very short period, winning a Sustainia award in 2014 for empowering local communities to make money from unmanaged waste polluting their environment.

It’s an example of how innovation can be born out of a desperate need to solve an underlying problem.

Continental gift

The raison d’être of the African Innovation Foundation (AIF) is to encourage African-led solutions and to increase the prosperity of Africans. AIF helps catalyse innovation and wants to see the emergence of needs-based innovation on the continent. AIF awards US$150,000 in prizes. Its 2015 prize for the innovation with the highest social impact went to Lesley Erica Scott of South Africa. She invented the Smartspot TBcheck, which examines the accuracy of machines used to detect tuberculosis. This invention is helping in the treatment of this killer disease.

Many African governments also see innovation as a tool to solve social problems and accelerate development. The African Innovation Outlook II report, from the New Partnership for Africa’s Development, reveals that they now see innovation as a driver of long-term growth, competitiveness and better quality of life.

Private sector companies are also contributing to innovation in Africa. Emerging Crowd is a UK-based crowdfunding company that encourages investment in emerging economies.

Creating, not copying

The future will be very exciting for Africa and Africans, and many businesses will start feeling the impact of innovation. Companies that invest in innovation will use it as a strategic tool for gaining market share and building sustainable profitable businesses.

Technology will also continue to have a big impact on innovation in this millennium. It will open up the African continent to the world and further expose its citizens to vistas they never knew existed. The future holds a lot of promise for Africa, and technology will be the bridge between Africa and the rest of the world.

Rather than copying innovations from other parts of the world and adapting them to local needs, Africans can become pathfinders coming up with ground-breaking innovations that will be exported to the rest of the world. This is already happening in trickles, as can be seen in the case of M-Pesa, but it is bound to gain critical mass as access to technology improves.

Innovation will create a domino effect that will impact all sectors of the continent’s economy. Current realities dictate the drivers that will shape innovation in Africa in the next 50 years. Such drivers include technological advances, the growth of more startups and the need to solve local problems.

Investors now see Africa as the next great growth region of the world. In Goldman Sachs’ 2007 research paper Beyond the BRICs: A Look at the ‘Next 11’ Nigeria was identified as one of the 11 countries with a high potential of becoming one of the biggest economies this century.

The hope is that Africa’s brightest minds will continue to build on the successes of M-Pesa and the e-wallet system and come up with disruptive innovations that will shake the world.

Kayode Yusuf ACCA, finance professional and journalist