In the post-COVID-19 century, Africa’s education and financial services industries offer the best opportunities, as the pandemic accelerates a move into digital ways of living and working, two prominent investors said on Tuesday.
“At this point in time, digital infrastructure companies are probably the ones that investors are most excited about,” Jihan Abass, founder and CEO of Lami, a digital insurance platform in Kenya, told the Reuters Next conference.
Since the pandemic began, she said, her Nairobi-based business, which tried to upgrade the staid insurance world of the East African nation by enabling customers to buy motor insurance on their mobile phones via instalments, has seen increased demand.
“Education was the hardest hit sector in the COVID because they were so unprepared for the tsunami,” Aboyeji told the conference, adding that low-hanging fruits are technological solutions to help learning in all institutions.
“To help them, they are so under-invested in terms of new technologies.”
But new regulatory barriers are tempering the exuberance over tech opportunities as policymakers look to raise revenue from the fast-growing digital services market.
This year, Kenya, a major player in the industry due to innovations such as the Safaricom-operated mobile money platform M-Pesa, introduced a new digital services levy.
Moves like this would deter sector investment and curb the potential role of technology in promoting exports of goods and services, which could be a better way for governments to raise their revenue, Aboyeji said.
“If on day one you squeeze your digital ecosystem with taxes, you’re going to end up with nothing because the talent is highly mobile, they’re just going to leave,” he said.
Instead, policymakers on the continent should provide incentives for tech start-ups because of their ability to push up conventional businesses such as insurance, Abass said.
“If you look at Africa, only 3% of people have insurance, so regulators need to nurture the industry and help it grow,” she said, “These (incentives) are things that are still lacking.”