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WEEKLY PUBLICATION DEADLINE: 12 pm GMT Sunday.  ISSUE NO 102 AFRICAN E-COMMERCE SPECIAL: THE LONG LEAP FROM HYPE TO REALITY
E-commerce refers to all online transactions. There’s a considerable "alphabet soup" of acronyms but two have most relevance in the African context. B2C stands for "business to consumer" and applies to any organisation that sells its products to consumers over the internet for their own use. B2B is when businesses buy things from each other online, supplying each other with goods and services. Online transactions happen mainly on the internet but can also involve e-mail, WAP-enabled phones, SMS text messaging and internet-enabled televisions. There is an enormous amount of hype about e-commerce in Africa. Everyone’s talking about it: donors, business people and governments. There was recently a supplement in a regional African magazine about e-commerce of some considerable number of pages that made no mention of anyone actually doing it in the countries it covered. The reason? Hardly anyone was doing it there (see Muriuki Mureithi’s article below). So what can e-commerce deliver for African SMEs? It has the potential to bring them new customers and to create closer relationships (online) with those customers. It holds the promise of better operating margins and cheaper marketing. It can change perceptions about how people think they can buy things, both within and outside the continent. The goods supplied through an e-commerce site can be placed on a spectrum from those that are more or less virtual (for example, a booking) to those which are physical (for example, a fridge). The pioneers of African e-commerce will need to find goods that reflect the realities in their different countries. This will tend to favour the more virtual end of the spectrum. In B2C terms, this would include tickets (for example something like the UK budget airline easyjet), bookings (especially for hotels, credit and value transfers (banks, stock exchange shares) and high-value, small size goods (for example, CDs and books through Amazon). The defining feature of these transactions is that the customer makes limited choices at the prices shown on the site. Rather different from Africa’s outdoor markets where price flexibility is the key. In B2B terms, the transactions are used to address purchasing and supply chain issues. These need negotiated pricing and variability of product supplied. They also require that the computer systems of different companies will be capable of working together. As you might guess, this has made little progress in Africa. The potential customers will have access to the internet. So what are the sizes of these user markets? The following are estimates for different countries: South Africa (2m+ users), Cote D’Ivoire (40,000 users) Kenya (20-30,000 dial-up), Senegal (11,000 dial-up), Mali & Niger (5,000 users) 500,000 ATM users in Kenya. You will notice that with some of the countries estimates of users were given and with others numbers of dial-up subscribers. Estimates vary but because some dial-up accounts are cyber-cafes the total number of users may be anywhere between 5-7 times the dial-up subscription total. It will not surprise you to know that the large markets are South Africa, Egypt and the Maghreb countries and Nigeria with mid-size markets in places like Cote d’Ivoire, Senegal and Kenya. Users are by their very nature affluent, high-earners if they have an individual connection. Cyber-café users are young, aspirational and ambitious: they will almost certainly become the next generation in power in Africa within 10 years so you should start paying attention to them now. Who are the key groups in terms of value? Tourists and past visitors (buying in hard currency). The African diaspora (buying in hard currency),the millions of Africans now living all over the world. For example: In Ghana it is estimated they send US$500 million a year back home in goods and cash. Most of Ghana Mall’s customers come from USA, Germany and Belgium. Finally Internet, mobile and ATM users in African countries (buying in local currency). As an external point of comparison, worldwide online buyers have gone from 10 to 15% in 2001. By contrast, Africa’s e-buyers are both tiny in number and value. It’s important to point out the difference between specialist and consumer markets. Most e-markets in Africa are so small that they are almost by definition specialist markets: small numbers of people looking for very particular goods and services. Even the diaspora markets remain quite small in terms of numbers of actual rather than potential buyers. In these circumstances businesses will need to build outwards from existing, known markets rather than simply plunge into new markets. E-marketing in this context is very similar to specialist direct mail: the business can be judged on what the size of its list of buyers is. Recent work by Boston Consulting based on the US market identifies a couple key points. Right at the top of online purchases by value is hardware and software, books, travel and music and videos: in other words, mostly virtual or small-value/small-size items. It also did a cost comparison between the business costs of a web commerce companies, shops selling the same goods and mail order companies. The mail order companies beat the web companies every time. Why? Because they have the fulfilment systems and have been in business longer than web companies. Volume equals lower costs unless you have specialist products. Very few stand-alone e-commerce operations make profits in the developed world so it is hard to see how they would in Africa. They have very high start-up investment costs and therefore would be very high-risk. The wise e-commerce entrepreneur will form strategic alliances and partnerships with existing suppliers and build the business slowly. Existing suppliers may experiment with e-commerce as part of a broader mix of selling methods: either to get much-needed experience or to attract hard currency sales. A few examples of existing operations may be useful. There are several airline ticket booking sites, most notably Flysaa.com and Kulula.com, the latter a partnership between British Airways and a budget South African carrier. There are many small craft selling operations. E-Shop in Ghana has just launched and the largest single operation is PeopleLink that is based in the USA. E-Souk started in Morocco and now operates from overseas. Esokoni is a B2B site being developed in Kenya amongst a group of suppliers by Symphony Software. Send to Africa and Ghana Mall both offer the diaspora from Ghana the opportunity to send their relatives back home goods that have been purchased in the country itself: electrical goods for example. A similar site exists in Ethiopia. Send to Africa has recently been put on hold because of the difficulties of maintaining competitive margins. There are a number of retail sites in South Africa which are very little different from their European and US counterparts: Kalahari.com is a good example. Whilst there has been a tremendous number of e-company closures in South Africa, those who survive the current downturn look set to survive beyond it. E-enablement software provider, e-company has 700 merchant accounts: 40% are online, half of which are small users. Its software handles 370,000 transactions a month and this number has been growing at 5% per month for two years. The most difficult part of the whole process is financial trust ­ payment and security. This is the single most difficult factor to overcome even amongst diaspora buyers. It will be important to have merchant accounts that offer vis and mastercard so that buyers have the security these brands provide. One South African operator has calculated that online transactions have cut fraud by 50%. Several factors make it hard for Africa to compete at an international level in this field. There Impact of currency exchange on margins (for example, E-dinar charges 5-6% of transactions). The charge per transaction are high because Africa does such a low volume of transactions. Verisign charges 2.4% on the value of the transaction, PayPal 2.9% + 30 cents per transaction. Many countries are not approved for merchant accounts. The bit you cannot do virtually is the actual delivery of physical goods. There are tremendous difficulties but we should not exaggerate them. For example in Ghana, BKB or DHL will deliver anywhere in Accra in 24 hours, in Central Ghana in two days and to the northern provinces in 4 days. DHL will also deliver to most of Kenya’s major towns in 24 hours. Delivery generally accounts for about 10% of transaction costs. International delivery is far harder bit not impossible. The e-commerce business needs to be able to have the products it advertises available. For things like crafts, they need to be of reasonably consistent quality and they need to be in your warehouse or storage area shortly after the order arrives. One e-commerce operation has 30 suppliers (most of whom sell through shops) for a relatively small number of goods offered because stock often runs out. Suppliers are not computerised so it is hard to track stock levels. There are going to be new opportunities for e-commerce but its growth will be tentative and slow. However the prizes will go to those who accumulate operational knowledge now as the size of the user base expands. New opportunities include: cyber cafes operating as merchant account holders (a customer gives them the cash and they order on their behalf), portal owners operating as merchant account holders (they offer transaction services to web site operators and pay them an income minus costs) and smart cards. There are already ATM rechargeable cards for mobile phones and there are internet charge cards in Africa. Why can’t these units that have value be used as a currency for online transactions at special outlets with merchant accounts? Is e-commerce in Africa a "for real" possibility? In analysing market developments in Africa over the last year we have been consistently surprised by the speed with which the private sector is making things happen across in the field of ICTs. However there are major structural problems to overcome - like transaction costs - and even the limited African consumer sector that exists is not highly service-oriented. Whereas in the UK it was viewed as a major achievement that the web could offer home delivery of pizza and a video, African consumers have much less money and much lower expectations. The first wave (outside of South Africa) must surely be international hard currency buyers like tourists and the diaspora. SURVEYS IDENTIFY STRUCTURAL OBSTACLES BUT POINT TO GROWTH Is there e-commerce in Africa or is this a hype that evaporated with the demise of dot.com craze? UNECA (www.uneca.org) working with IDRC (www.idrc.ca ) among others believed e-commerce is critical to Africa entry to the information society and in 2000/2001 commissioned a survey - Pan African E-commerce Mission - to investigate the status of e-commerce in Africa. A detailed survey was carried out by experts in twelve countries in Africa selected to represent all regions in continent. The writer of the article coordinated the survey for Eastern African region. Key issues to be addressed were the presence or otherwise of a supportive environment of the development of the e-commerce ­ government awareness and indeed policy and strategies to champion e-commerce at national level, availability of requisite legal and hard infrastructure to support e-commerce, availability of human resources and finally research capacity to localise and in the long run build local research capacity. The output of the survey was presented at e-Forum organised by AITEC (www.aitec.com) in Nairobi Kenya in March 2001. In the same year, BMI-Technowledge (www.bmi-co.za) published a detailed survey on e-commerce in East Africa. The survey is the first to attempt to quantify the volume of the e-commerce in East Africa and identify the entry points for entrepreneurs in the emerging e-commerce in East Africa. Key outcomes of the surveys were as follows: - That the governments need to act on their responsibility to create an economic, legal regulatory environment that will enable and foster the growth of e-commerce within their national economies. As a first step, the governments should develop and publicise an e-commerce agenda accompanied by a timetable for the action. This long-term vision will reduce uncertainty and reduce risks for the entrepreneurship in e-commerce. - There was negligible e-commerce taking place in the East Africa but the level of awareness was increasing by the day and requisite support infrastructure was expanding. By 2004 a significant volume of e-commerce was projected on b2c and b2b to slightly over US$_ Bn. B2b was projected to contribute 75% of the e-commerce trade in Kenya and 43% in the region. - Market adoption has to take into account and assuage the concerns of the generation gap of key stakeholders. Those who produce products for sale are in a different generation from those driving e-commerce. The greatest challenge is to engage traders in e-commerce who sees e-commerce is technology driven. - Critical lack of the infrastructure (telecommunications and internet, online payment e-fulfilment etc) inhibits domestic e-commerce. International e-commerce particularly in service industries leads and indeed had the largest level of investment. Most websites are static being no more than a hard copy company brochure. - More resources and skills have to be invested to build the web as a business channel. An e-commerce transaction is the end product of a system that has to be looped by various entrepreneurs in an enabling environment. The region presents opportunities to complete the loop and exploit e commerce by overcoming the numerous challenges The author Muriuki Mureithi can be contacted on: summit@africaonline.co.ke
AVOIDING DIGITAL DIVIDE SUICIDE - LOOKING FOR LOCAL SOLUTIONS Since its inception some 5 years ago, e-commerce has proved to be a highly successful and profitable venture for a number of companies. With the global potential of e-commerce growing, African countries stand to gain considerably from sustainable e-commerce solutions, considering that a number of products and services available in Africa remain unique to the continent, and the effective facilitation of cross-border trading could substantially stimulate local African economies. However, this is not happening now, and many wonder if it ever will. In Africa, the penetration of advanced telecommunications to the general public is limited by a lack of education, low per-capita income and rigid regulatory environments. Growth opportunities in the African market abound, however the level of risk inherent in the market remains high. Much of the risk factor lies on the regulatory front, with a future that is uncertain at best, despite the regulators’ best efforts. Other risks are competitive, directly linked to telecommunications service provider monopolies. Legislation is also a key issue. In some countries, specifically South Africa and Tanzania, too much legislation with regard to multi-currency pricing and selling of goods in an international marketplace makes it less attractive for merchants to explore e-commerce opportunities. It also makes it more difficult to acquire transactions offshore. However, too little legislation with regard to tax, fraud and moral issues such as gambling, pornography, etc. makes the e-commerce environment exploitable and less attractive to both merchants and consumers alike. The perception in Africa that e-commerce is riddled with fraud also poses a major threat to the success of e-commerce. This view is all too often supported by anti-fraud hardware and software suppliers, as well as the various media, who use this hype to sell their products and services. This makes the situation appear far worse than it actually is. In addition, the perception of Africa as corrupt and fraud ridden in general has an effect on international scoring systems, which position Africa as a high-risk continent. The various regional rules that govern card associations are also a hindrance to e-commerce in Africa. First-World solutions and their associated costs are applied in Third-World Africa, causing astronomical costs for e-commerce products and services that could be available at reduced rates. In this regard, Africa lacks a powerful voice to express concern and deal effectively with the issue. International competition is also very strong in the e-commerce arena, and most First-World players have had valuable experience over the years. This, together with the fact that First-World players have had access to the best technology and service providers of e-commerce solutions for the past 10 years, puts Africa at a major disadvantage. And finally there is the issue of fulfilment distances and costs. Logistically it is more difficult to move products around in Africa, and once converted into the currency of a product’s destination country, the cost of delivery is much higher for African countries. Getting the product to the consumer is therefore an expensive exercise. These issues all point to the fact that Africa is facing digital divide suicide. The continent’s low line penetration has had a knock-on effect on the elements of e-commerce, and led to higher infrastructure costs, which have led to higher bandwidth costs. These, in turn, have meant higher access costs for the people who have the lowest average income on the planet. In effect, ICT access costs less for the most affluent of people in the world, and is most expensive for the poorest, and the difference is getting bigger. In October 1997 the difference in Internet hosts between North America and Africa was 267:1, in October 2000 it was 540:1. Those who are privileged enough to have access to the technology generally acquire and use it more easily and effectively. This means that, on an exponential basis, they become more privileged. African nations, however, spend more money on importing technology to reinforce this "privilege" than they do on supporting their own domestic technology initiatives. To add to this frustration, all protocols, standards and rules followed in e-commerce today have been set by private organizations and multi-national companies, none of which include a meaningful voice for Africa. This could be attributed to the fact that only 5% of the world’s secure servers are found in Africa, of which 90% are in South Africa, but whatever the reason, Africa is poised for certain digital divide suicide. The reasons: most technology implemented is imported and paid for in a non-African currency, requires ongoing support (in a non-African currency) and is generally inappropriate for this continents infrastructure and scale. In addition, taxes placed on e-commerce infrastructure, such as computers, are very high, and this discourages purchases. This coupled with the general high cost of telephony throughout Africa discourages e-commerce trading and keeps it out of reach for the majority of its citizens. In Africa the majority of telecommunications service providers are state owned, and these same states decide on the taxation legislation that governs imports of IT and e-commerce infrastructure. In this regard, current pricing and legislation should be recognized as a threat to e-commerce, and should be adjusted accordingly. State owned telecommunication service providers could make up for the loss with state subsidies, and in so doing, encourage and support e-commerce participation and inevitably, its growth. Africa could also look to South Africa for sustainable results as South Africa has its very own sustainable e-commerce solutions, and in the B2C environment, there are no non-South African players. The reasons for this are: - International systems cannot compete on price - local systems are developed and supported in local currencies. - International systems are not appropriate for the infrastructure ­ local systems are more robust. - International systems are not appropriate for the market - local systems focus on meeting specific local requirements. - Local solutions meet the international standards and requirements for both Visa and Mastercard, and all banks in general. Because South African e-commerce solutions serve the specific South African e-commerce environment, they improve service and profit levels. In addition, e-commerce solutions are created to meet the specific needs of South African merchants, and the fact that they are priced in Rands, makes them an attractive option for the rest of Africa. For ten years now, organisations worldwide have been realizing the benefits of e-commerce and it has proved to be a highly effective way of doing business both across international boundaries as well as within their own borders. Africa needs to start realising the value that e-commerce can add to its economy. The fact that there are a number of small towns and communities existing in isolation, each with their own unique products and services, means that e-commerce can position them in the global market without them having to physically move. Now is the time for Africa to start tapping into this unique and valuable form of trade and start experiencing the benefits it has to offer. However, African countries will continue to isolate themselves in the international e-commerce arena if they don’t realize the importance of investing in appropriate, affordable technology. They must look for opportunities to create the environment, and invest locally for long-term sustainability. The more they depend on First-World solutions, the longer it will take them to develop sustainable e-commerce solutions, and will eventually prevent e-commerce trading to take place at all. The author Barry Coeetze can be contacted on: BarryC@ecompany.co.za
IP Planet ­ The Planet’s IP Connection Through its wide range of IP services, IP Planet is able to offer direct US connection to multiple POPs from 64Kbps to multiple satellite transponders and provide backbone services to ISP, PTTs, corporate customers and Cyber-Cafes connected to local ISPs. If you are in need for professional and cost-effective Internet connectivity services anywhere in Africa, you can reach the IP Planet team, 24 hours a day, through any of the following options: - Web Site: www.ipplanet.com AFRICA ONE IN HOLDING PATTERN BUT CLOSING THE EQUITY GAP Africa ONE’s cabling project has been in a holding pattern more or less since September 11th. It believes that it is close to collecting the necessary equity to start but has not yet got there. About US$300 million is need for the project to get "the green light". Everything else is in place. Project financing is in place and vendor supply contracts are more or less negotiated. Pre-sales from African carriers are believed to be in the region of $600 million. NIGERIA GETS WHAT IS CLAIMED TO BE FIRST CALL CENTRE Rockwell FirstPoint Contact, previously known as Rockwell Electronic Commerce, has implemented a call centre solution for cellular communications provider MTN Nigeria, providing MTN subscribers with the first state of the art technology ever call centre in Nigeria. (source: http://www.mediatoolbox.co.za/pebble.asp?relid=2991&p=39 ) BURUNDI RURAL NETWORK IS LOST The breakdown of the rural telephone network which has been observed since about two weeks in Rumonge, Makamba and Rutana (southern Burundi) centres, is of great concern to telephone users.The few National Telecommunication Company (ONATEL) customers who were lucky to be connected to the rural telephone network is slowly turning to the more expensive GSM network. The problem is felt by news agencies and banks which need communication means all the time...In Rumonge town, users are currently queuing at the Telecel Burundi telephone kiosks where a client pays 150 per cent more than the normal rate. (Source: ABP news agency via DigAfrica) NIGERIA REGULATOR BANS COMMERCIAL USE THE ISM FREQUENCY BANDS According to a statement from the NCC:"The use of ISM bands (2.4G, 5.8G, etc) for commercial purposes has been a hot topic of discussion over the years. Since taking over the management of commercial spectrum from Ministry of Communications in January, 2002, NCC has reviewed the situation and consulted widely and also studied the issue as it obtains in other countries of the world such as UK, USA and South Africa. Relevant ITU and FCC publications on the issue have also been studied". "It has been discovered that users in this band do not keep to the regulations guiding the use of these bands, such as low transmitter power, deployment over short distances, etc. Also, there is no protection against interference in this band, hence it is difficult to monitor or guarantee the quality of service being offered to subscribers. This is a regulatory obligation and NCC is committed to consumer protection.The Commission therefore wishes to state categorically that ISM bands cannot be used to provide commercial services. They are only allowed for private use, self-provision or for industrial, scientific and medical applications". "However, in order not to disrupt services to several users who have already subscribed to operators using this frequency; and to also allow the upcoming FWA operators soon to be licensed for fixed wireless service in the 3.5G band to settle down and provide alternative service to customers, the present illegal operators are hereby given up till the end of February, 2003 to vacate band.Subscribers are advised to be careful about patronizing any service provider offering wireless access service based on ISM bands as quality cannot be guaranteed and such operators will not be allowed to operate as from end of February, 2003". SA’S TELKOM SHAPES UP FOR THE COMPETITIVE FIGHT AHEAD WITH STAFF CHANGES Telkom’s Board of Directors has approved further changes to the Company’s top management structure, signalling its readiness for competition when its five-year exclusivity period ends on 7 May 2002. The CEO of Telkom, Sizwe Nxasana, today announced changes that will soon see South Africans moving into several key management positions following the successful transfer of skills from the Company’s strategic equity partner. This month, Nombulelo Moholi moved from her previous position as Telkom’s Deputy Vice President of Sales and Marketing into a newly-created position as Chief Sales and Marketing Officer (CSMO). Ms Moholi is now responsible for Corporate and Global, Business and Government, Consumer Markets, Public Services and International and Special Markets. On 15 May, Telkom’s Managing Executive of Technology and Network Services (TNS), Reuben September, will become the company’s new Chief Technical Officer (CTO) when he takes over this position from the Managing Executive of Core Network Operations (CNO), Ken Raley. Several functions will report to Mr September as CTO, including Access Networks Operations (ANO), Data and Special Services (DSS) and Core Network Operations (CNO). BUSYINTERNET PROVES ITSELF IN ACCRA AND IS LOOKING TO GROW ELSEWHERE BusyInternet’s 24/7 cyber-cafe concept has quickly caught on and is reporting high levels of usage:ll 100 terminals busy from 11am to 3am. 30,000 accounts have sold in 4 months and there are over 1500 visitors each day.Also all of its office spaces have been rented by companies specializing in website production, software development, interface design, off-shore data entry for U.S. companies, bandwidth & wireless networking. It is also providing new services including: video and telephone conferencing, private VIP browsing booths and full catering for meetings and conferences. Its international team is conducting market assessments in several West African cities, with the intention of opening more BusyInternet centers this year. Additionally, it will be providing services to other partners in Africa, including market assessments, financial modelling, setup, operations manual, hiring and training, procurement. KENYA’S CYBER CAFE OWNERS HOLD OFF PRICE HIKE AND NEGOTIATE WITH GOVT The Cyber-Cafe Owners of Kenya will not implement its recently proposed hike in prices beginning April as earlier planned. According to CCOK’s Ishmael Tenega: "The government has come in to address the issue of Cyber Cafe closures. I believe we might have a good start when the government comes in especially with regard to Cyber Cafes’ complaints that the charges made for the connections are quite high. In short, we will start our negotiations here".
NIGERIA’S TELCO PRIVITISATION GOES INTO MELTDOWN Nigeria’s privatisation programme faced a crisis on Tuesday after the winning bidder in the $1.3 billion sale of national phone company Nitel failed to complete the payment.Nitel’s sale, the country’s biggest privatisation, is the centrepiece of President Olusegun Obasanjo’s plan to reform the ailing economy of Africa’s most populous nation by turning over loss-making state enterprises to competent operators. A spokesman for the privatisation agency, the Bureau of Public Enterprises, said Investors International (London) Ltd had missed a 4:00 p.m. (1500 GMT) deadline marking the end of a six-week extension given it last month. IIL is a consortium dominated by Nigerian traditional chiefs and some state governments along with Nigeria’s largest bank, First Bank Nigeria Plc . "At the expiration of the deadline IIL had not shown up to pay," spokesman Joseph Anichebe said. He declined further comment, promising a statement later. IIL risks losing a down payment of $131.7 million already made on the deal, including part of the financing coming from First Bank. BPE had tried to save the deal and embarrassment for the government by agreeing to the controversial extension for IIL. The agency has been savagely criticised by commentators and some investors have accused it of bending the rules. The agency had initially refused a request for more time for payment. But it said it reversed its decision after the second preferred bidder Telnet, which is backed by Korea Telecom <30200.KS> and Swedtel AB, the consulting arm of Swedish Telia , said it no longer wanted to buy Nitel. As Tuesday’s deadline approached, many Nigerians predicted the deal would collapse after IIL was quoted as saying negative news from Nigeria was hampering its efforts to raise capital. The consortium made a similar argument when it asked for the extension. At that time it cited several factors, including the December 23 assassination of Justice Minister Bola Ige, which it said had "accentuated the country risk of Nigeria to the highest level". IIL is partnered with Portugal Telecom unit Tecnologia das Comunicadoes Lda (TDC), which had agreed to help manage Nitel but would not own any equity in the company. The government quickly exhausted all its prescribed procedures after IIL failed to make its payment and Telnet refused to open talks, a BPE statement said. The BPE has said it is considering several options ranging from an initial public offering to starting the process over again. Many Nigerian analysts, saying Nitel’s bid price was far too high, had said the telecom network’s privatisation was doomed to fail.A technical audit established that about $1.5 billion would be needed to modernise Nitel’s facilities over the next three years. A staff audit revealed its 11,000 staff gulps seven billion naira ($60 million) annually, with 80 percent of staff close to 40 years old. The global industry average is 30 years. (source: Reuters via DigAfrica) IN BRIEF - The overall cellular industry will grow to R46 billion by 2005, with Vodacom continuing to be the largest player by far and Cell C being close to achieving approximately R5 billion in revenues by 2005 http://www.mediatoolbox.co.za/pebble.asp?relid=2988&p=39 - ShawCell Telecommunications has reported an 8% increase in headline earnings per share for its latest financial year after both its divisions achieved a profitable year.
CAMEROON OR GHANA? I think African countriies are all kidding themselves. Instead of taking the hard decisions they have to take. 17 companies on Ghana’s stock exchange .. less multinational but are they less Ghanaian like AGC on the London Stock Exchange ..... Wireless providers Third Rail NetAfrique ANS .... Third Rail has swallowed them all. 42 licensed ISPS .. theoretically all open to wireless. Actual: NCS, Africaonline, IDN, Africanus, Afripa and on on ....! Dial up suscribers ONE ISP ALONE has more than 10,000 500,000 claimed as cafe users but I am sceptical! Regulatory When it comes to regulation it is plain that African countries are kidding themselves. We have just over 200,000 fixed lines in Ghana and unlike a lot of Africa the mobile figure is less! It’s just regulation. I am optimistic so I say Ghana will become a regional hub but African countries are just kidding themselves! Sabra Asante
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BRIDGES.ORG’S TERESA PETERS ON DIGITAL CITIZENS RIGHTS The drive for increased government efficiency using ICT in Africa raises substantial civil rights issues. Teresa Peters looks at what is at stake. As the ability to store, process and search data becomes easier and faster, governments in developing and developed countries alike are facing the challenges posed by the need to increase government efficiency and protect against crime and terrorism while at the same time protecting citizens’ rights and privacy. The technology to deal with the vast amounts of data that are stored in government records—a pipe dream in George Orwell’s "1984"—is available now, and governments around the world are struggling to balance citizen’s rights and their own responsibilities. In some cases they also have their own agendas for using information technology (IT) to manage public records. Especially in countries where the public has not always had good reason to trust the government, introducing IT into government processes raises a number of issues when it is not done in an open and transparent way. The debate around electronic public records has now reached South Africa with the introduction of a system for digital record-keeping that will test whether the right balance can be achieved. On 18 February the South African Home Affairs Department announced that it has undertaken the development of the Home Affairs National Identification System (HANIS). In the first phase of the HANIS project 40 million paper identity records will be converted to digital form. The second phase is to shift from paper-based citizen identity cards to an electronic version through the issuing of smart cards. HANIS will store and match all South Africans’ identity details, photographs and fingerprints. The stated objectives of the new system are to improve the effectiveness of government and to deliver public services more efficiently. The introduction of the smart cards also aims to help combat crime, particularly identity fraud, which is a major problem in South Africa. It is also intended that citizens will benefit through faster processing of pension and welfare payments and the end of the long queues at the Department of Home Affairs. All of this would be good news for South African citizens. Similar initiatives are underway in many other countries around the world, and given the events of September 11th last year any measures to improve security are understandable, particularly through more effective means of identification. But an electronic public records system like HANIS raises a number of critical issues that governments and citizens ignore at their peril. It is important to begin by looking at what the South African Government is trying to achieve, and establish whether the HANIS system will deliver the required results. It seems that the South African Government has good intentions, but a number of valid concerns have been raised. First, there are concerns that the system may go beyond identification information to also be used for collecting and compiling information about citizens’ medical, employment and welfare details, and possibly even movements and spending habits. And there is the suggestion that the information stored on the cards may also be available to banks and other financial institutions. It is not clear that such extended uses would improve government efficiency, but wider use certainly raises serious concerns about the protection of individuals’ civil rights, especially the right to privacy. The Government should establish how the stored information would help to achieve its desired goals, and ensure that the uses of the HANIS system are narrowly tailored to stay within the defined objectives. Second, there are concerns about the level of security and management that such a complex system will require. It is critical in these kinds of "trusted systems" that people have confidence in the trust entity (in this case the government) and its ability to conduct proper maintenance and enforce controls. Adequate security for an electronic public records system must be considered in a larger context of hardware, software, networks and people: computers are by nature complicated, unstable and prone to failure, and with all of this information available to such a diverse and unknown number of people, there is a huge potential for abuse. No smart card or database system is (or ever will be) 100% secure, so it is absolutely essential to have multiple layers of controls, safeguards and checks in a system such as this. In his book Secrets and Lies: Digital Security in a Networked World, security expert Bruce Schneier says, "Security is not a product; it itself is a process. It involves preventative technologies, but also detection and reaction processes, and an entire forensics system to hunt down and prosecute the guilty." Finally, there are concerns about what effect the HANIS system will have on citizens’ rights to privacy and protection of personal data. Thought should be given to the types of data that can be legally accessed, by whom and under what conditions, and rules should be set out as part of the fundamental system design and implementation. Citizens should have clear rights to find out what information is stored about them and who has access to it, and they must have mechanisms for correcting it. Moreover, the system may solve some problems while creating new ones and citizens should be aware of the implications that the use of electronic records may have for their lives. For example, while HANIS may prevent identity fraud that results from stolen or forged paper documents, it is recognized that identity theft gets easier and more profitable as more systems become electronic. Governments need to think about what security, access control, and audit mechanisms can be put in place to prevent the abuse of electronic public record systems and ensure that individual’s rights to privacy are maintained. Given the huge amount of data that will be available, and the wide range of government departments, law enforcement agencies and other state offices that will contribute to and access these systems around the world, it is critical that governments ensure that only those who have a right to access particular data get access. Effective infrastructure must be put in place to secure the cards, and training is needed to ensure proper use. Technology should be used to catch those who abuse the system, and there must be appropriate penalties. These are not new questions. They have been asked, and addressed, in a number of countries around the world already. At the international level, the Organization for Economic Cooperation and Development (OECD) has set out guidelines on privacy, security and cryptography to help shape government policies in these areas. For example, in Finland, citizens have smart cards, but access to certain information held on the card is strictly controlled, and there is confidence in the system and its administration. The technology for electronic management of access control and audit procedures is sophisticated and readily available. Implementing similar measures to protect citizen’s rights in South Africa would be easy—and cheap—to build into the system now, before the HANIS architecture becomes too advanced. If the Government—whether in South Africa or elsewhere—wants its citizens to embrace a system of electronic public records, and have confidence that their privacy and civil rights are not going to be infringed, then it needs to start early to build trust by addressing the issues of access and audit and telling the public how these concerns will be dealt with. Governments must also put in place appropriate legislation to outlaw abuse of the electronic public records system and deal with those who break the law. The adoption of effective data protection laws, the regulation of access controls, and the setting up of a trustworthy Data Protection Commission would go a long way towards setting citizen’s minds at rest. In implementing the HANIS system, the South African Government has an opportunity to set an example for other countries that will face these challenges in the future as they look to improve efficiency and introduce e-government for the benefit of their citizens.
NEW SHOWCASE FOR SA WEB DESIGNERS A collaborative effort between media.toolbox and Stonewall Productions has resulted in the relaunch of the Web Developers Showcase. http://www.mediatoolbox.co.za/pebble.asp?relid=2993&p=39 DOMINIC ZINKE LAUNCHES STAGE TWO OF HIS TAXI PROJECT Dominic Zinkpe launched "étape n° 2" of his TAXI project "Wallaï (je te jure !)" in Niger. In April he will go to Senegal to create his third Bush-Taxi. The taxi’s will be on show during the Biennial of Arts in Dakar, May 2002. info: daubelcourelise@yahoo.fr http://www.africancolours.com/?content/zinkpetaxiniger.html HIV/AIDS CD-ROM FOR HEALTH WORKERS EngenderHealth, a nonprofit agency working to improve women’s health worldwide, released two online mini-courses to support the interna- tional network of family planning and sexual and reproductive health providers in their efforts to prevent the transmission of HIV/AIDS and other sexually transmitted infections (STIs). The two new courses, entitled ‘Sexually Transmitted Infections and HIV and AIDS’, are part of EngenderHealth’s Web-based series ‘Topics in Reproductive Health’ (the first course in the series, ‘Sexuality and Sexual Health’, was released last fall). They will provide health care providers, especially those in resource-poor settings, with knowledge and strategies for addressing HIV/AIDS and STI prevention, management, and counselling with their clients. Developed by Engen- derHealth through a grant from the Bill & Melinda Gates Foundation, the courses are now available at: http://www.engenderhealth.org/minicourses/ or on CD-ROM. For more information contact: Carrie Svingen Tel: +1-212-561-8538 Email: csvingen@engenderhealth.org IMFUNDO LAUNCHES USE OF ICTS IN EDUCATION DATABASE Imfundo has launched a database which catalogues all major initiatives and organisations that use information and communication technology (ICT) to enhance education across sub-Saharan Africa. This is the first element in the development of the Imfundo KnowledgeBank portal. http://www.imfundo.org/knowledge/database.htm M-WEB/CLICKATELL TEAM UP M-Web and Clickatell teaming up to provide carrier-grade SMS services directly to the end-user, using Clickatell’s technology to build a one-to-one and bulk-messaging SMS tool which is integrated into M-Web’s web portal. (source: http://www.mediatoolbox.co.za/pebble.asp?relid=2983&p=39 )
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