According to the Imports Localisation and Supply Chain Disruption Study for the fourth quarter of 2022, South Africa’s exports dipped by 3% while imports rose by 10%. The study has also found that the import-export equation is leaning increasingly towards the former – imports were 39% higher in 2022 than for the same period in 2020.
This situation is being driven by numerous factors, not least of which are load-shedding, water-shedding, and the ongoing disruption at South African ports. There seems to be a need to stimulate African innovation from the foundational level so it can counteract systemic challenges.  An important way to do this is by serving up solutions that can be consumed globally at scale but to the benefit of the continent.
“A common way is to look at the problem as a ladder, the upper levels are highly complex intellectual property where solutions such as artificial intelligence tools and developments reside, while the lower levels are elements such as traditional forms of agriculture, mining or construction,” he explains. “It seems that developed economies allocate substantial subsidies to infrastructure and food security whereas in South Africa, we are unable to match or compete with the relatively large investments made elsewhere. We cannot compete on these levels and so there’s been an inversion towards importing what we used to export and this is systematically knocking out the rungs at the bottom of the ladder for our economy to grow from.  The long-term risk of this is a tipping point where it becomes almost impossible to climb the ladder if you are still heavily dependent on the lower rungs.”
Surely it makes sense to address this problem before it becomes too difficult to catch up with the rest of the developed world because, as the gap widens, so does the complexity to catch up. Take, for example, some of the Big Tech companies whose market capitalization dwarfs that of South Africa Inc.  These companies and industries are providing solutions to Africa that are defined by other cultures and currencies. They invariably imprint themselves on the local economies – and increasingly so as the African entities shift from producers to consumers of Big Tech.  What if there was an African equivalent that leveraged language models, spoke African languages, and delivered services that were affordable to African companies?
“Africa cannot just be a source of essentially unrefined natural resources of which Cobalt is a prominent example.  A key way we can realistically counteract the risk of being subsumed by global IP is through digital innovation,” Theo says. “This means asking some very pertinent questions around how the country and the continent can embrace digital to reframe these challenges and build solutions that have the potential to reimagine Africa on the world stage.”
The problem isn’t the continent’s ability to use technology, it is how countries can overcome systemic challenges that are currently inhibiting their access to this technology, and their growth, to ensure they can catch up. And these challenges are making it more and more difficult for Africa to compete.
“Africa has often skipped evolutionary steps in terms of the digitalization continuum, leapfrogging stages of development to catch up with the world,” says Theo. “However, this doesn’t solve our problem. Yes, digitalization helps us globalize some of our offerings and yes there may be technology that can help us counteract systemic challenges, but we’re still using intellectual property, still using innovation that has been incubated and industrialized elsewhere.”
This is not to say that the situation is impossible to overcome. Far from it. Regular solutions are emerging from South Africa and Africa that make it onto the international stage. Innovators and entrepreneurs have the experience, grit, and expertise to create platforms and products that reimagine the potential of Africa. What’s needed is more support from governments, a commitment to commercializing Africa, and more difficult conversations.
“Policy frameworks, innovation incubation, investments – these are essential to igniting Africa’s IP,” concludes Theo. “The continent needs a space that allows for brilliant minds to come up with brilliant ideas solving problems that have global relevance, and a shift away from the limitations imposed by ineptitude and corruption. We have the people and the capabilities, now we need to push forward to remove our reliance on imports and instead reimagine Africa as the home of IP.”
By Theo Spickett, Data Platform Practice Lead at Altron Systems Integration.