Africa

In the vast landscape of global innovation and entrepreneurship, Africa's startup ecosystem emerged as a beacon of promise and potential. Over the past decade, the African continent witnessed an electrifying surge in entrepreneurial dynamism. This has created a vibrant mix of innovation-driven companies that have captivated investors, markets, and the world's attention. The future, it seemed, was brighter than ever for African startups.   In the golden years that preceded 2023, the African startup scene experienced what can only be described as a "hot rise." From bustling tech hubs in Nairobi and Lagos to pioneering ventures in Cairo and Johannesburg, the continent’s economic landscape underwent a transformative shift. Investors from around the world were pouring capital into African startups, fueling their growth and igniting the flames of innovation.   However, as 2023 arrived, a new dawn broke. The African startup ecosystem found itself caught in the midst of a chilling and unexpected reality—a funding freeze that would send shockwaves across the continent.   The Hot Rise of African Startups (2019-2022) The Rise Begins (2019) Over the past few years, the African startup ecosystem experienced an impressive and hot rise. In 2019, African tech startups reached a significant milestone, raising a remarkable $2.02 billion in equity funding. This represents a staggering 74% year-on-year growth. Resilience Amidst Challenges (2020) In 2020, despite the impact of COVID-19, there were 359 equity rounds, which is a 44% increase from the previous year. These rounds amassed a total of $1.43 billion in venture capital funding. Although this marked a 29% decrease from the previous year, it's noteworthy that the context of the pandemic affected the average ticket size, slashing it by 60%. Extraordinary Surge (2021) In 2021, African startups secured an impressive $4.3 billion through over 818 deals, averaging $1 million every 2 hours. This is 2.5 times more than the previous year's total. Additionally, there were 12 'mega deals' of $100 million or more, totaling $1.9 billion. OPay's $400 million investment was the largest of these deals. As a result, 5 unicorns emerged in a single year. Sustaining Momentum (2022) African startups secured $5 billion in funding through over 1,000 deals in 2022, with 1,000 unique investors participating. Africa was the only region to experience positive year-on-year growth in startup funding, with a 5% increase. In contrast, other regions saw a significant decline in funding. Europe experienced a -17% drop, North America -37%, Asia Pacific -39%, and Latin America a sharp -62% decrease. Global Recognition and Investor Diversity The African startup ecosystem has established itself as a dynamic and resilient force in the global tech industry. It has displayed consistent growth and attracted a diverse pool of investors. Out of the 1,400+ investors who participated in at least one $100k+ deal on the continent, 36% were based in North America, 27% in Africa, 21% in Europe, 8% in Asia Pacific, and 7% in the Middle East. This geographical distribution remained consistent between 2021 and 2022, with only minor variations when compared to 2020 and 2019.   The Freeze: A Sudden Halt in Funding The year 2023 witnessed a 'funding winter,' casting a shadow over the global startup landscape. This abrupt halt in funding, which originated in the United States and China in Q1 2022, has now permeated every continent. Startups in Africa received $3.4 billion in funding in 2023, including equity, debt, and grants. This is a 32% decline from the over $5 billion recorded in 2022, with equity funding alone experiencing a 60% reduction. The funding slowdown can be attributed to various factors, including: Geopolitical Tensions: Ongoing conflicts, such as the Russia-Ukraine war and the Israel-Hamas dispute, have instilled a global atmosphere of uncertainty. Investors are hesitant to commit substantial funds amid these geopolitical risks. Interest Rate Hikes: The recent implementation of interest rate hikes has elevated the cost of capital for businesses. This heightened financial burden has posed challenges for startups and venture capitalists alike in securing funding. Tech Stock Decline and Massive Layoffs: The devaluation of technology stocks has significantly impacted overall market sentiment. In response to the downturn, major tech companies such as Meta, Microsoft, and Spotify have resorted to substantial layoffs. This has exacerbated the cautious approach of investors. Global Recession Fears: Mounting apprehensions about an impending global recession have prompted investors to adopt more conservative financial strategies. This heightened economic uncertainty has led to a reluctance to engage in significant financial commitments. Risk-Averse Investor Behavior: A prevailing shift in general investor sentiment towards risk aversion is evident. Investors seek stability and proven opportunities, contributing to the funding slowdown across sectors.   The Impact on African Startups: Startup Cemetery Many African startups struggled to survive due to reduced demand and a lack of funding. Entrepreneurs faced a difficult landscape similar to the dot-com bubble era. Funding streams dwindled, operating costs skyrocketed, and customer acquisition became increasingly difficult as large corporations streamlined their software inventories and consumers reevaluated their spending.   These challenges have led to a number of closures in Africa, including some of its most promising startups:   Dash: Dash, a Ghanaian financial technology startup established in 2019 with the goal of linking mobile money wallets and bank accounts throughout Africa, unfortunately had to cease its operations. Despite securing $86.1 million in funding over a period of five years, the startup faced closure due to an elevated burn rate and insufficient revenue. WhereIsMyTransport: WhereIsMyTransport is a data platform that focuses on sustainable mobility in emerging markets. The company was established in 2016 and has raised $27 million in funding since its inception. However, founder Devin de Vries characterizes the company as having reached the end of its journey, unable to secure additional capital. Sendy: Despite raising $26.5 million, Kenyan logistics startup Sendy faced challenges in securing additional investments. Sendy fell short of its $100 million fundraising goal, leading to cost-cutting measures and significant layoffs. Unfortunately, these efforts were not enough, and Sendy eventually ran out of funds as investors backed down. Other notable African startups that unfortunately went bankrupt after raising capital from investors: 54gene, LazerPay, Zumi, Kune, and Pivo.   Weathering the storm: How African entrepreneurs are adapting   In 2023, some African startups have demonstrated remarkable resilience amid a challenging business landscape. Confronted by economic uncertainties, these innovative ventures have showcased remarkable agility and adaptability, redefining conventional models to ensure sustained growth. Many startups have shown resourcefulness by forming local partnerships, diversifying revenue streams, and reducing costs to decrease reliance on external funding. The current objective is to attain positive cash flow to navigate through this period successfully. Entrepreneurs and investors are now prioritizing resilience and survival over growth, as evidenced by the shift from unicorns to camels/cockroaches. In addition, collaboration within the African startup ecosystem has increased, creating a supportive environment for knowledge-sharing and mentorship initiatives to flourish. Such as the launch of a mentor-led angel community and investment syndicate by Startupbootcamp. This initiative is designed to link startups with mentors who can provide operational assistance and capital. Recognizing the role of the entrepreneurial ecosystem, governments and international organizations have been introducing policies and incentives to help startups during these tough times. For example, FMO, Endeavor, and AfricaGrow have partnered to help African Agritech startups become investment-ready. Additionally, the Nigerian government has launched the Startup Portal. Despite facing adversities, African startups are debunking the myth that growth is the sole metric of success. They are proving that creativity, community, and strategic decision-making are indispensable elements not only for survival but also for thriving in the face of challenging economic circumstances.   The Road Ahead: What Lies Beyond the Freeze The resilience of startups in the face of economic challenges has been a recurring theme throughout history. The dot-com bubble took two to three years to stabilize, and the 2008 recession lasted about a year or two. The key takeaway is that recessions are temporary. What truly matters is the ability of startups to weather the storm and emerge stronger in the subsequent phases. Notably, some of the biggest tech companies today were founded during recessions, proving that adversity can breed innovation. As for the African Startup Ecosystem, it is currently in its nascent stages and still poised to grow significantly in the coming years. Africa can learn from the experiences of successful tech companies in the US, China, Europe, and India without having to start from scratch. Although the projections for 2024 are uncertain, there is optimism that African startups will not only overcome the challenges but also thrive in the coming years, contributing to the continent's technological advancement and economic development.    Sources: Source for numbers related to funding: Africa The Big Deal (Database) https://thebigdeal.gumroad.com/ Startup Closures: https://techcabal.com/2023/10/26/whereismytransport-shutting-down/ https://techpoint.africa/2023/12/05/pivo-has-shut-down/ https://techcabal.com/2023/09/26/sendy-has-entered-into-administration/ https://techpoint.africa/2023/10/09/techpoint-digest-687/ https://africa.businessinsider.com/local/lifestyle/after-raising-dollar45-million-african-genomics-startup-54gene-shuts-down/vfyb0qe https://disrupt-africa.com/2023/04/18/nigerian-crypto-payments-startup-lazerpay-shuts-down/ https://www.techinafrica.com/after-getting-920k-in-funding-6-years-ago-the-kenyan-e-commerce-company-zumi-has-shut-down/#:~:text=%E2%80%9CKenyan%20Ecommerce%20Pioneer%20Zumi%20Ceases,and%20%24920K%20in%20Funding%E2%80%9D&text=After%20its%20funding%20ran%20out,have%20failed%20recently%20in%20Kenya. https://techcrunch.com/2022/06/22/kune-food-shuts-down-barely-a-year-after-starting-kenya-operations/ Initiatives: https://innovation-village.com/113353-2/ https://medium.com/@startupact_ng/announcing-the-launch-of-the-startup-portal-a-major-milestone-for-the-nigeria-startup-act-a44a29ac4822 https://agfundernews.com/why-fmo-endeavor-are-partnering-again-to-help-african-agrifoodtech-startups-become-investment-ready

Historically, Africa has lagged in the technology space. However, in recent years, a new wave of tech startups emerging across Africa is promising to change the narrative. These start-ups are not only more innovative than those seen in the past, but they are also led by founders who have the ambition to solve some of the hardest problems that have plagued the continent. The expansion of mobile connectivity in Africa has facilitated the adoption of digital solutions and fueled innovation. Start-ups are emerging in a variety of tech sub-sectors such as Fintech, Healthtech, Edtech, and Insurtech, aiming to solve the continent’s challenges with innovative technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), machine learning, and blockchain.   Focus on innovation and technology The informal sector is a significant source of employment and a major contributor to economic activity in Africa. Africa’s tech startups have recently started to seize this opportunity to build scalable businesses that aim to address this market. According to Khaled Ben Jilani, a senior partner at Africinvest, a Pan-African private equity and venture capital firm, “the potential impact of innovation in the African start-up space is large and imminent due to the size of its gaps and the set of converging positive factors, or innovation drivers.” Cracking Africa’s long-standing developmental problems will increasingly become a commercial tech opportunity for entrepreneurs. The opportunities are uncountable, especially as Africa’s broadband and smartphone penetration rates continue to increase.   Africa’s growing start-up ecosystem Over the last few years, Africa's startup ecosystem has grown exponentially. According to Briter Bridges and GSMA, the number of active innovation hubs in Africa reached 643 in Q4 2019, up from 314 in 2016, 442 in 2018, and 618 in Q2 2019. Even though Africa has more than six hundred innovation hubs, nearly half of these hubs are concentrated in only four countries, or what was identified as the “innovation quadrangle”: Nigeria (90 hubs), South Africa (78 hubs), Egypt (56 hubs), and Kenya (50 hubs).   Support from Venture Capital (VC) firms is key to the growth of African start-ups Funding has long been a challenge for African start-ups, but the tide has started to turn in the last few years. VC firms have in the past been skeptical about investing in African start-ups, as they believed the continent is characterized by higher risk. However, African venture capital investment inflows have been steadily increasing over the last five years. VC firms have been increasingly more open to investing in African start-ups. Increasing funding rounds and a larger number of deals are being recorded every year. According to the Partech Africa Tech VC report, VC funding raised by African tech startups in 2019 amounted to US$2.02 billion, compared to US$1.16 billion in 2018, representing 74% growth year on year.   Examples of African start-ups that are making waves on the continent Across Africa, technological innovation is starting to have an impact on multiple sectors, including energy, agriculture, banking, healthcare, entertainment, transport, education, and many more. Many tech startups are emerging to help the continent overcome its developmental challenges. Examples of such start-ups include the following: Logistics: Kobo360 (Nigeria): A freight logistics platform that assists cargo owners, truck drivers, and cargo recipients in achieving an effective supply chain. Kobo360’s goal is to facilitate the transportation of goods. Agritech: Twiga (Kenya): A mobile-based, cashless business-to-business (B2B) supply platform that connects farmers to millions of small and medium-sized vendors in African cities. Twiga connects farmers and vendors to trusted, modern markets. Healthtech DabaDoc (Morocco): DabaDoc has developed a technology that allows for instant doctor appointment bookings. DabaDoc connects millions of patients with thousands of doctors across Africa and significantly improves the doctor discovery process. Fintech Yoco (South Africa): A technology company that builds tools and services that facilitate payments, with the aim of unlocking economic opportunities for small businesses.   Although it's unlikely that tech start-ups will be able to address all of Africa’s development challenges overnight, they can potentially be the driving force behind Africa's growth. Therefore, African countries should do more to support them, such as through entrepreneurial ecosystems and appropriate skill development programmes, regulations that streamline business procedures, a stable political and economic climate, incubators and accelerators, subsidized infrastructure such as office space, and so on. Only then will Africa reap the full benefits of tech start-ups. Author: Jonathan Sumbobo   Sources: https://medium.com/@khaledbj/connecting-african-entrepreneurs-to-the-world-with-the-first-pan-african-venture-capital-fund-a689595e6eee https://thegedi.org/2017-global-entrepreneurship-index/ https://startupgenome.com/reports/global-startup-ecosystem-report-2019 https://www.weforum.org/agenda/2019/01/african-entrepreneurs-changing-the-direction-of-globalization/ https://www.weforum.org/agenda/2016/05/a-brief-history-of-africa-s-tech-industry-and-7-predictions-for-its-future/ https://www.mckinsey.com/~/media/McKinsey/Industries/Technology%20Media%20and%20Telecommunications/High%20Tech/Our%20Insights/Lions%20go%20digital%20The%20Internets%20transformative%20potential%20in%20Africa/MGI_Lions_go_digital_Full_report_Nov2013.ashx https://briterbridges.com/briterafrilabs2019 https://briterbridges.com/618-active-tech-hubs https://partechpartners.com/documents/12/2020.01_Partech_Africa_-_2019_Africa_Tech_VC_Report_FINAL.pdf https://www.weforum.org/agenda/2019/09/africa-just-launched-the-world-s-largest-free-trade-area/ https://edition.cnn.com/2019/07/01/africa/single-trade-currency-ecowas/index.html

Ever Given ship was not allowed to depart from Suez Canal unless the vessel’s owners pay up to $1 billion to compensate for the enormous disruption it resulted in. Ever Given’s Ship Blockage Causes the World’s Heaviest Traffic Jam. On the 23rd of March 2021, the Ever Given was sailing through the Suez Canal. Strong winds whipped up by a sandstorm affected the steering of the ship causing it to turn into the banks blocking the entire span of the canal. The blockage of the Suez Canal brought a lot of attention to the global maritime importance of this passage.  In this article, we look at the various negative effects the Ever Given caused and also shed light on other interlinked questions, mainly, how big is the global maritime trade transport market? Are there penalties imposed on the Ever Given Vessel? Are there other canals that are considered key trade passages?  Is this the first time the Suez Canal was blocked? How Important is the Suez Canal and what are the canal’s investments/projects? Global Maritime Trade Transport & Key Choke Points A sole country can’t be entirely self-sufficient. Shipping helps ensure that the benefits of trade and commerce are evenly spread. Almost every country relies on maritime trade to buy its necessities and sell its products. Maritime transport is the backbone of international trade and the global economy: almost 80% of global trade by volume is carried by sea and is handled by ports worldwide. Because of its importance, commercial shipping relies on strategic trade routes to move goods efficiently. A vast number of vessels use these waterways every year, but it does not always go smoothly as there are risks that can disturb the whole system. The most serious risks to global trade are posed by choke points which are strategic, narrow passages that connect two larger areas to one another. When it comes to maritime trade, these are typically straits or canals that see high volumes of traffic because of their optimal location. Although these vital routes are very convenient, they impose several risks: Structural risks: As demonstrated in the recent Suez Canal blockage, ships can crash along the shore of a canal if the passage is too narrow, causing traffic jams that can last for days. Geopolitical risks: Because of their high traffic, choke points are particularly vulnerable to blockades or deliberate disruptions during times of political unrest. The location affects the risk type and degree. Below are listed the biggest threats concerning 8 of the world’s major choke points. Is the Suez Canal the Only Maritime Artery? What Do Other Maritime Passages Mean to the World? Global Maritime canals and straits shorten navigation time of transport of cargoes and contribute to reducing transport costs. Despite the most recent crisis, Suez is not the most vulnerable bottleneck for world trade. Ever Given is not the First Ship to Block the Suez Canal The Suez Canal has been blocked and closed several times since its opening in 1859. According to the Suez Canal Authority, the Canal has closed 5 times since it opened for navigation in 1869: 1956, after a British-French-Israeli invasion. That tension following the Egyptian President’s announcement of nationalizing the canal led to its closure for months 1967, Egypt enters a war with Israel and the canal closed for 8 years 2004, the Tropic Brilliance oil tanker got jammed in the waterway which took 3 days to refloat and sail again  2006, the Okal King Dor drifted at a wrong angle and got jammed leading to a temporary blockage in the canal for 8 hours 2017, OOCL Japan malfunction caused the ship to to block the canal but the tugboats freed the ship in a few hours In comparison with the 5 previous incidents, the Ever Given falls in the middle in terms severity. The Ever Given’s Blockage tragically affected Global Economy & Maritime Flow In less than a week, global trade has been tremendously affected by this incident. Although the ship was freed and floated on March 29th, the canal could not immediately process full traffic flow. The blockage has been the source of much worry and frustration for the global shipping industry. Waiting Vessels since the blockage: More than 300 ships waiting in and around the Suez Canal Upcoming Vessels: 130 vessels were on their way to the canal  Global Oil & Gas: An average of 12% of global trade, around one million barrels of oil and roughly 8% of liquefied natural gas pass through the canal each day Egypt’s losses due to the damage: The Suez Canal Authority Chairman stated that the Canal’s blockage results in revenue losses averaging $14m-$15m for each day  Delayed Cargo: Estimated $9.6bn of trade along the waterway each day. That equates to $400m and 3.3 million tons of cargo an hour, or $6.7m a minute Global Trade: Allianz’ analysis showed the blockage could cost global trade between $6bn to $10bn a week and reduce annual trade growth by 0.2 to 0.4 percentage points How was the ship freed? The main obstacle in re-floating the ship once again from the Suez Canal bank was its enormous size. The ship is 400 m (1,312 ft) long, 59 m (194 ft) wide while the canal itself is only 200 m wide (656 ft). This vast size comes with a massive weight as well, the ship weighs around 200,000 tons. A 24/7 emergency effort was put into place to get the shop back on track. 3 main forces were used in the strategy to free the boat. Dredgers clawed away underwater sand, Excavating equipment was used to dig out the keel of the ship, Tugboats, were used to push and rotate the ship and pull it with tow lines. Ever Given ship is forbidden to leave the Suez Canal Egyptian authorities reported they wouldn't release the vessel unless its owners agree to pay up to $1 billion in compensation. Osama Rabie, who leads the Suez Canal Authority reported “Egyptian authorities would demand $1 billion to cover the costs of freeing the vessel. The figure will cover the expense of the equipment and machinery used to clear the way, the damage to the canal itself, and the compensation of the 800 people who worked to release the 200,000-ton ship. It will also refund the costs from the blocking of the canal, which ended up causing an epic traffic jam of more than 300 ships on either side of the channel.” Is it Ever Given or Evergreen?  There was some confusion occurred regarding the name of the ship as news outlets started calling the ship “Ever Given” while the name “Evergreen” was prominently painted on the side of the ship in large capital letters.  Ever Given is the name for the ship, and the ship is operated by a Taiwanese company called Evergreen Marine. Careful observers or sailing aficionados will notice that Ever Given is also written on the ship at the bow and stern of the vessel in smaller lettering. ​ Global Repercussions VS Egypt’s Efforts & Its Worldwide Recognition At the beginning of the incident, maritime experts globally warned that it may take weeks to dislodge the Ever Given and that the blockage would last for a long time. However, thanks to the effort of the Suez Canal Authority and the support from the government, the ship was refloated within less than a week.  Egyptian officials said that the backlog of ships waiting to transit through would be cleared in around three days.  Evergreen thanked the Suez Canal Authority and other concerned parties for managing to successfully release the mammoth. Several countries also extended their congratulations to Egypt as they watched with bated breath how this problem was resolved.  Investments in Suez Canal  Investments in the Canal. The Suez Canal has been receiving investments to its economic zone and for canal renovation. In the last 5 years, Suez Canal Economic Zone (SCZone) investments hit more than 15 billion dollars. In the same timeframe, over 220 companies from different industrial sectors were established at the SCZone. The strategic role in promoting trade exchange between Egypt and other regional and African countries was aided by Egypt’s national road network developments and the Cairo-Cape Town road project. Governance. SCZone will establish a subsidiary company to work as an investment and commercial arm to channel funds for projects along the Canal Opportunities in the Canal. With investments more than $15 Billion, the SCZone gathers 14 industrial developers, 247 operational establishments, covering 239 sqms of land that creates 70,000 job opportunities. Resources. The canal has a strong infrastructure that includes 7 power stations and 13 power-distribution units, 2 desalination plants and 2 water-treatment plants, establishing tunnels and bridges to support the transportation network, and expanding the telecommunications and natural-gas networks. Future Investments. Suez Canal Container Terminal (SCCT) aims to invest $60 million during 2021 to enhance the competitiveness of the container handling terminal at East Port Said Port. The company’s investments are currently estimated at over $900 million. The new investments aim to add 6 giant cranes to increase the total number to 12, in addition to increasing the number of yard winches from 50 to 60-yard winches. References: https://www.businessinsider.com/ever-given-forbidden-leave-suez-canal-until-owners-pay-compensation-2021-4#:~:text=Ever%20Given%20ship%20forbidden%20to,for%20the%20chaos%20it%20caused&text=The%20Ever%20Given%20can't,are%20paid%2C%20officials%20said%20Thursday.&text=The%20owner%20of%20the%20Ever,heard%20from%20Egyptian%20authorities%20yet. https://www.bbc.com/news/world-middle-east-56567985#:~:text=Traffic%20has%20resumed%20in%20Egypt's,with%20the%20help%20of%20dredgers. https://www.bbc.com/news/business-56559073 https://www.bbc.com/news/56523659 https://www.visualcapitalist.com/mapping-the-worlds-key-maritime-choke-points/ https://www.dw.com/en/suez-canal-blockage-4-of-the-biggest-trade-chokepoints/a-57020755 https://unctad.org/webflyer/review-maritime-transport-2018#:~:text=Maritime%20transport%20is%20the%20backbone,are%20handled%20by%20ports%20worldwide. https://www.npr.org/2021/03/26/981600153/heres-how-a-long-shutdown-of-the-suez-canal-might-roil-the-global-economy CNBC Television News https://www.usatoday.com/in-depth/graphics/2021/03/29/ever-given-refloated-and-freed-how-did-they-get-the-ship-out-of-the-suez-canal/7043678002/ https://www.usatoday.com/in-depth/graphics/2021/03/26/how-evergreens-ship-got-stuck-in-the-suez-canal/7010375002/ https://www.ctvnews.ca/business/ever-given-or-evergreen-what-s-the-actual-name-of-the-suez-ship-1.5366697 https://www.egypttoday.com/Article/1/100302/Evergreen-Line-thanks-Suez-Canal-Authority-for-refloating-its-stuck https://www.nytimes.com/2021/03/26/business/suez-canal-blocked-ship.html https://www.france24.com/en/tv-shows/business-daily/20210326-vessels-start-diverting-amid-warning-suez-canal-blockage-may-last-for-weeks https://www.france24.com/ar https://www.un.org/press/en/2016/sgsm18129.doc.htm https://english.ahram.org.eg/NewsContent/50/1202/359583/AlAhram-Weekly/Economy/More-investment-in-the-Suez-Canal-Zone.aspx https://english.ahram.org.eg/NewsContent/3/12/379611/Business/Economy/Investments-at-Suez-Canal-Zone-hit-bln-in--years,-.aspx https://www.hellenicshippingnews.com/suez-canal-containers-aims-to-invest-60m-during-2021/

This is part one of our African Agriculture series – where we explore successes, failures, and the way forward for African Agriculture policies.  The dangers of land reform policies – The case of Ethiopia Land reforms have been a thorny issue in Africa since the independence periods. Many countries, including South Africa and Nigeria, are still trying to navigate the complex matter of land rights, land reorganization, and the proper way to distribute agricultural land based on historic and socio-economic considerations. Ethiopia stands out as a stark reminder of how land reform policies can go awry, and lead to increased vulnerability among small-scale rural farmers. Despite its immense agricultural potential, with large stretches of arable land (4th largest in Africa in terms of arable land with over 151 190 km²), the country has been consistently suffering from bouts of famine and dire food insecurity. Ethiopia’s agricultural difficulties can be linked to multiple elements, including poor rural infrastructure, weak farmer support, and a lack of modern agricultural equipment, but many of the sector’s structural problems can be traced back to the poor land reform policies implemented in the 1970s. The Marxist military government ruling Ethiopia from 1974 until 1987 launched a complete overhaul of the country’s land system once it reached power, proclaiming the end of land ownership and transforming all agricultural land into government owned land. This new transformation was accompanied in 1975 with the proclamation of the “land to the tiller” policy in matters of agricultural land. Under this new policy, farmers and peasants who originally tended the land were given the right of use for agricultural purposes, but no ownership rights were given (selling, mortgaging, leasing, leaving land to descendants). Moreover, land and plot distribution/redistribution were common during this period, as rural population increased and demand for land-use skyrocketed. [caption id="attachment_4879" align="aligncenter" width="652"] Figure 1: Rural population in Ethiopia[/caption] The system in place stripped away any economic incentive to develop the land, as farmers were under the constant fear of land redistribution and reorganization. This insecurity in tenure (or simply the feeling of insecurity) created a self-perpetuating vicious cycle, where farmers were incentivized to exploit the land they were assigned as much as possible, without investing any personal resources on improving it. The “land to the tiller” system also led to the fragmentation of agricultural land, as farms were handed out to any rural farmer able to exploit it. Farms sizes shrunk rapidly under the new land distribution system, with small farms (which constitute more than 75% of the country’s agricultural land) averaging less than 0.8 hectares per farm. In addition, land dependency rates started climbing as more people had to rely on agricultural land for their livelihood. [caption id="attachment_4880" align="aligncenter" width="614"] Figure 2: Agricultural Population[1] per hectare of Arable land[/caption] This new reality created socio-economic conditions that are conducive to heightened poverty levels among farmers, increased vulnerability to environmental shocks, and a generalized situation of precarity. The dire state of Ethiopia’s agricultural sector was exposed when the country experienced one of the worse bouts of famine in its history in 1984[2], which highlighted the fact that large parts of Ethiopia’s rural population were one drought away from starvation. Moreover, land stress and over-exploitation also became more prominent under the new land administration system, as poor farmers were left with no choice but to exploit their assigned plot of land to the highest levels (no use of land rest periods or crop rotation techniques). While the full extent of land degradation is very hard to measure, recent estimates suggest that over 85% of Ethiopia’s agricultural land is considered “moderately to severely degraded”. The legacy of Ethiopia’s land reform policies in the 1970s can still be felt today across the country’s agricultural sector. High Farmer poverty levels, recurring localized food shortages, and land degradation stand as reminders of how poor policy-making in the agricultural sector can have lasting effects on rural development and poverty alleviation. Despite some improvements -introduced by the 1995 constitution- to the status of farmers and their relationship with the land, all agricultural land remains under state ownership to this day. Ibrahim Zaaimi – Research Associate  Sources : R Paper; R Paper; Article; FAO; Book Chapter Analysis; Report; Analysis; Press; Press; Paper; Analysis [1] The agricultural population is defined as the number of people depending on land and farming for their livelihood (farmers and their families, agricultural workers and their families) [2] Political repression and food aid blockade heightened the impact of the droughts and shortages

  “Broadband can radically change the socio-economic prospects for the region and contribute to higher growth and shared prosperity.”  - Carlo Maria Rossotto, World Bank ICT Regional Coordinator in the MENA region[1]. The majority of African countries have certainly been lagging behind in the economic development path. Public opinion usually agrees that this underdevelopment is due to reasons such as bureaucracy, illiteracy, and others. However, in the 21st century, a new variable was added to the development formula and it is often overlooked. Research about the relationship between economic development and internet speeds started to be noted in the beginning of the 2000s. A research conducted in 2011 by Ericsson and others concluded that “doubling the broadband speed for an economy increases GDP by 0.3%”[2]. Not only that, but it also claimed that additional growth can be yielded by additional doublings of speeds. Moreover, a report released by the World Bank and IFC claimed that there is a GDP increase of 1.3% for every 10% increase in high-speed internet connections[3]. "Broadband has the power to spur economic growth by creating efficiency for society, businesses and consumers. It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence." -  Johan Wibergh, Head of Business Unit Networks, Ericsson. Researchers have many explanations as to link economic growth to higher internet speeds. For example, it was proved that the shift from slow dial-up connections to broadband had a positive effect on productivity and efficiency[4]. It can lead to expand businesses and services, empower local economies, and social inclusion. All these factors contribute to boosting the competitiveness of the economy. Internet speeds in Africa are very poor compared to the rest of the world. Data shows that 17 of the 30 countries with the slowest internet connections are located in Africa, 7 are in Asia, 6 in South America and 1 in Oceania. None of the top 30 countries are in Africa. To further identify the depth of this issue, a research conducted by Cable.co.uk showed that it takes about 18.5 hours to download a 7.5 GB file in Malawi, 14 hours in Egypt, and 18 minutes in Singapore (fastest internet in the world)[5]. The most promising African country when it comes to internet speed is Kenya. It has the fastest internet connections compared to its African neighbors with an average connection speed of 12.2 Mbps, having an impressive YoY change of 67% in 2017[6]. Not only that, but Kenya’s total available bandwidth jumped from 2028 Gbps end of 2016 to 2906 beginning of 2017, with a % change of 43.28%[7]. These impressive developments come as a result of implementing the National Broadband Strategy for Kenya (NBS) as part of Kenya’s Vision 2030 program, contributing to Kenya’s goal of becoming a knowledge-based economy by the year 2030. NBS aims to reach “broadband connectivity that is always on, and that delivers a minimum of 5 mbps to homes and businesses for high speed access to voice, data, video and application”[8]. It has 5 focus areas which are [9]: Infrastructure, Connectivity and Devices Content, Applications and Innovations Capacity Building and Awareness Policy, Legal and Regulatory Environment Financing and Investment "The strategy has enabled the government to roll out the National Optic Fibre Broadband Infrastructure that has linked all the counties to the Internet by fibre cable. Fibre cable ground installation and provision of 4G network coverage has contributed to the high speeds and efficiency in connectivity,"  - Joseph Mucheru, the Kenya's Cabinet Secretary in the Ministry of Information[10] This strategy has proved successful with extinguished growth in both start-up and e-commerce segments in Kenya[11], spurring massive economic and social benefits. Currently, Nairobi is considered as East Africa’s most vibrant technology hub and Kenya is internationally recognized as a pioneer in the mobile banking field (M-Pesa), boosting access to finance and financial inclusion for Kenyan citizens[12]. All in all, the Kenyan experience demonstrated that investment in internet speeds and penetration has many positive spillover effects on various aspects of the economy. Sahar ElDeeb, Analyst at Infomineo Sources [1] http://www.worldbank.org/en/news/press-release/2014/02/06/access-to-high-speed-internet-key-to-job-creation-social-inclusion-arab-world [2] https://www.ericsson.com/en/press-releases/2011/9/new-study-quantifies-the-impact-of-broadband-speed-on-gdp [3] http://www.infodev.org/articles/high-speed-internet-drives-economic-growth [4] https://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadband-on-the-Economy.pdf [5] https://www.cable.co.uk/media-centre/release/New-Worldwide-Broadband-Speed-League-Unveiled-UK-Ranks-31 [6] https://www.akamai.com/us/en/multimedia/documents/state-of-the-internet/q1-2017-state-of-the-internet-connectivity-report.pdf [7] http://www.ca.go.ke/images/downloads/STATISTICS/SECTOR%20STATISTICS%20REPORT%20Q3%20FY%202016-2017.pdf [8] http://www.ca.go.ke/images//downloads/PUBLICATIONS/NATIONAL%20BROADBAND%20STRATEGY/National%20Broadband%20Strategy.pdf  [9] http://www.ca.go.ke/images//downloads/PUBLICATIONS/NATIONAL%20BROADBAND%20STRATEGY/National%20Broadband%20Strategy.pdf [10] http://allafrica.com/stories/201704050037.html [11] https://www.oxfordbusinessgroup.com/overview/expanding-usage-internet-penetration-growing-country-aims-maintain-its-status-technology-centre [12] https://www2.deloitte.com/content/dam/Deloitte/ke/Documents/tax/Economic%20Outlook%202016%20KE.pdf