The case for Talent: The Andela vs the Jumia Conversation, does African have Tech talent or not?
In 2012/2013, two Telecom providers MTN and Millicom, acquired a 33.3 % stake in the African Internet Holding group with a German eCommerce conglomerate Rocket Internet, which has specialized in taking existing western eCommerce models and replicating them with slight localization across emerging markets.
The Africa Internet Holding group merged and re-branded its various online properties into the Jumia Group some years later and raised 300 million Euros from its existing and new investors MTN, Rocket Internet, AXA, Goldman Sachs, Orange and CDC in 2016.
Jumia operates as an online marketplace in Africa for electronics, fashion among others on the African continent with presence in 13 countries including Egypt, Morocco, Ivory Coast, Kenya, and South Africa along with its original launch location of Lagos, Nigeria.
Jumia, though the largest eCommerce market place in Africa, according to Rocket Internet, Jumia saw its adjusted loss before interest, tax, depreciation and amortization widen to 120.1 million euros in 2017.
In 2019 Jumia chose to IPO and enlist in the New York stock exchange at a beginning trading $14.50 under ticker symbol .
The French CEO of the organization which employs 5,128 people in Africa in an interview at the CBN , when asked why the tech for Jumia is not on the African continent , considering the relatively cheap talent on the continent, whilst insisting that Jumia was an African company remarked “…the reality is in Africa there’s not enough development and developers
As you can imagine this led to a lot of controversy and conversation about tech talent in Africa.
On the hand Andela, A New York based startup led by the Americans Christina Saas , Jeremy Johnson , Canadian Ian Carnevale and 2 Nigerians Iyinoluwa Samuel Aboyeji and Nadayar Enegesi with offices in Nigeria, Kenya, Uganda and San Francisco in the USA are working to find the best developers in Africa and contract them out to companies across the globe . These developers are mostly cheaper than developers in New York or London.
Andela in Jan 2019 raised a series D of 100m that will enable them bring Artificial Intelligence to hiring practices and facilitate the matching of skills to projects to reach its goal of solving the worlds technical talent shortage by distributing Africa’s top developers globally for short stints of work.
Andela according to their website has hired and outsourced over 1000 developers from the African continent.
Even though there are many criticisms of Andela’s business model, that it serves the growth of tech ecosystems in Silicon Valley than it serves Africa and that its business model ensures the best talent in African tech are distracted by the money offered while working for Andela, when they could be building technology solutions for the African market
The theory that Andela works to is simple: There is a dearth of technical talent in Africa and with a finishing school ( Andela’s training program), they can be deployed all over the world to fix engineering problems
So who is right Jumia or Andela ? Does Africa have Tech Talent or Not ?
This would be a simple question to answer if we had definitive data to show the tech talents skills needed in Africa vs the tech talent available preferably segmented by skill set .
So I am going to attempt to answer this questions piecing together country specific data from development agencies along with anecdotes in the space
According to the ILO Africa is the youngest continent with an average age of 19 years, and according to the World Economic Form ‘ Every year for the next three decades, 15-20 million increasingly well-educated young people are expected to join the African workforce’
So first and right off, Africa does have the right demographic with the most academically educated generation the continent has ever had .
This however does not give us a definitive answer :
Here is a story to illustrate :
In the late 1990’s and early 2000’s Telecom operators spent a lot of money bringing in expats from Europe to work on networks and develop mobile telephony. They could not outsource the work because most of the work was tied to a physical location.
That constraint meant they spent years building up internal technical skills within their organization, some like Vodafone Ghana spent a lot of money convincing Ghanaians residing in Europe to take up technical roles back in their home country.
These strategies and many other strategies enabled Telecom Operators from across Africa to bring their down their human resource cost down. Hiring expats meant these Telco’s have to pay for transporting them on to the continent, pay for insurance, security ,housing whilst paying 5 to 10 times what a local would cost.
Today you are unlikely to see more than 5% of Technical teams in the telecom sector .
However unlike the telecom industry in early 2000’s , In 2019 tech lends itself more to remote work which has become a mainstay and has made it easier for companies to not spend money developing in-country local talent.
Local tech talent has also taken to doing remote work for clients outside the African continent leveraging on the many available remote work platforms.
Local developers have figured that considering the low wages on the African continent , remote work is a better way to make an income or augment current income .
In the end both Jumia and Andela can be right about talent availability based on their outlook .
Lets face it, there is much that needs to done to up the numbers of tech talent on the African continent , but even with investment in developing and building local talent , it is cheaper in most parts of Africa than the outsourcing hot spots in Eastern Europe and Asia .
In my experience of running a tech company in Africa, I know with 1000 USD it easy to hire mid to senior developer with about 10 years’ experience.
Jumia I believe has a more short term outlook on building and developing technology skills on the continent.
Jumia, if they crunched their numbers with a 5 to 10 year outlook, would find it would be fairly easy and cost efficient to hire the number of developers it needs to build all its products in Africa, and could easily do this in Capetown or Lagos.
According to the 2018 new report released by the Cape Innovation and Technology Initiative (Citi) over 40,000 people are employed in the tech startups in Cape Town as opposed to 20,000 in Johannesburg, 9000 in Lagos and, 7000 in Nairobi
Jumia would be able to over pay to attract developers from existing startups and still pay less than most outsource locations.
In the short term its inconvenient to attract, train and maintain a world class technology team in Africa, I run a tech startup, I know this. In the long term it is cheaper and engenders goodwill within the countries they work in.
Andela is also right and is playing the long game with African technical talent, hand picking the very best, polishing them and farming them out to American and European countries at far cheaper prices.