Oleh Martychenko of R&S Quantum, a Ukrainian fast EV charger manufacturer, estimates that as many electric vehicle chargers will at some stage be deployed in the world as the number of gas station pumps today. Mr Martychenko is also an M&A expert.
Before that happens, as an EV charging station operator/service provider at peak hours should you aim for a max 5 min charge and max three vehicles in the line before each charging port? Or is it already bordering on the risk of scaring loyalty out of EV drivings customers?
Most of the development land in cities throughout the world is controlled by the state. States often work in silos and it is often up to communities and real estate professionals to convince the regulators to release that land.
But in the world where real estate is often treated as a commodity, urban communities and the few welfare states that Africa has should get creative and convince property investors that buildings create a sense of place, not just monetary dividends.
So it’s most of the times down to solid multi-actor partnerships if smart cities were to develop across Africa. And don’t forget about the farmers as they lose agricultural land due to urban growth but may stand to earn a lot more if urbanization is done right.
Africa is the world’s second-largest and second-most populous continent with the surface of 30.2 million sq km (20.4% of the total global land area).
Sub-Saharan Africa has a slum population of 199.5 million
It is generally believed that going more vertical in densifying urban environments is closer to getting your city to become resilient and sustainable. Urban planners are aware of the fact that local communities do not react similarly to urban high-rise. In Asia high-rise is regarded as a premium category but in places like Europe it is treated as low quality housing.
Affordable housing and role of residents’ aspirations in urban design
At the same time they cite high borrowing costs for property developers as well as low levels of infrastructure development within city suburbs as challenges in rolling out more affordable housing units.
Rwanda Housing Authority supports introduction of Real Estates Investment Trusts (REITs) and urges real estate developers to raise funds on the stock market.
Kigali could face a housing deficit of 344,000 homes in 2020. 31,000 housing units need to be built annually, with only 800-1,000 hitting the market in the capital of Rwanda. But most of them are not affordable housing.
The government in Rwanda has set up a fund where mortgage rates will be lower than those of banks: 10 %. Rwandan banks charge 16-18 % interest rate, while in Kenya the interest on mortgages is about 27 %. Some houses in Rwandan cities now cost between Rwf10 million and Rwf20 million (starting at ca USD13,000). Rwandans earning Rwf100,000 or Rwf300,000 monthly can hardly afford even that.
Use this Mortgage and Housing Affordability Calculator availed in March 2016 by Centre for Affordable Housing Finance in Africa and see what it would cost to service a mortgage loan for a US$10,000 house in each African country.
When policy and regulation become counter-productive
Policy inconsistency is often a challenge on African projects. Take a case of a Saudi client that commissioned Singapore’s Surbana to plan a 640 ha site in Algeria. Though the financing and plans were in place, the project never got off the ground. The Algerian government rescinded the land titles for the site.
Surbana has created master plans for the city of Kigali, Rwanda and redevelopment master plans for three zones in the Angolan capital Luanda.
Another barrier to investment in urban housing markets is lack of access to reliable, prompt and local market information.
Content on sites like Estateintel.com in Nigeria — created by real estate professionals — is a way to bring in more transparency into the real estate and land markets in Africa.
A large percentage of land in urban environments is used for roads and utilities. As populations densify more of the utilities go underground. And more public spaces take their place above the ground.With driverless cars, parking lots and garages will not be as necessary as such vehicles will not need to be waiting for you in the CBD. As the garages underneath buildings get removed, the front entrance to the building gets rid of the elevator that was put their initially to get you to the parking garage. At this stage, the access to the front door needs to be changed since all the cars delivering the employees in the morning queue up in front of the building.
Another feature of smart cities — delivery drones — shape the conversation about the location of industrial warehouses in African cities.
However technology is often taking backstage in the discussions of land rights.
Take for example Brazil:
Following the adoption of the 1988 Constitution, which included a chapteron urban policy, a ground-breaking law called the Statute of the City was introduced in 2001 to promote equity and access to urban land. It gave municipalities various instruments to institutionalize the right to the city.
First, it sought to ensure that city management was more democratic by making land use planning mandatory throughout each city and subjecting development decisions to social control and participation (previously planning was essentially an elitist activity and only selected parts of each city were subject to investment and service delivery by the municipalities).
Second, it sought to ensure that the social function of urban land and buildings was put before their commercial value by removing part of the land from the market (previously public authorities had very little scope to intervene in the property sector through planning and urban management initiatives because of the long-held tradition of private property rights).
Across Africa, a clash between statutory and customary land laws often undermines property market development and makes getting legal title a challenge.
For urban planning to be seen as a collaborative process of shared decision-making (as opposed to a top-down, technocratic activity undertaken by government experts, private developers or commercial investors) African societies have a lot of e-governance solutions available. And ‘right to the city’ policies like the ones adopted in Brazil.
Some 75 % of global population live in urban settlements of fewer than 500,000 people. The figure will only get higher with time. Smaller cities, especially across Africa, are projected to double/triple in population over the next 15-25 years. Secondary cities vary considerably in size. In China, some have populations of over five million, while in Ethiopia they have fewer than 200,000.
Creating decentralized strategies to provide basic services to smaller “intermediate” cities and towns can facilitate the transition between rural and non-rural activities and take pressure off Africa’s megacities.
“Taking pressure off Africa’s megacities”
“This is where most investment and urban planning need to take place: equipping [Intermediate cities] with proper infrastructure, helping deliver basic services and enabling them for the generation of job opportunities,” argues Edgar Pieterse of the African Centre for Cities.
In West Africa, Ghana works to relieve pressure on Accra and Kumasi by building the capacity of local government, training planners and local councillors in smaller cities. On the other side of the continent, in Uganda, a partnership between Belgium-based Cities Alliance and the British Department for International Development focuses on 14 secondary cities, to boost the long-term planning capacities of local governments and assit slum dwellers.
“Rolling out broadband”
“In most African cities, planning is done short term, in five-year or maybe ten-year plans. It’s important for these cities to increase their planning horizons to 30 years,” explains Samuel Mabala of Cities Alliance.
Connect smaller cities to the world outside the national borders
If small cities in the middle of nowhere become hotbeds of company formation in the United States, can’t their African peers follow, follow fast? How significant is the number of places in Africa where people want to live for the sake of the place, not just a paycheck?
Create positive change by tapping into the land market
One thing is certain: land in Mohammedia, a port city on the west coast of Morocco between Casablanca and Rabat, can be cheaper for its population of 188,619 than in Nairobi, Kenya, home to some 3 million people. And all these African cities mentioned above have one enormous advantage over tech hubs like Silicon Valley, Austin, Boston or New York. Land is cheap.
As James Fallows, a national correspondent for The Atlantic, puts it “‘Every calculation – the cash flow you must maintain, the life balance you can work toward – is different when a nice family house costs a few hundred thousand dollars rather than a few million.” Again, in smaller African cities that family house can cost you well south of USD100,000.
“Cheaper rental prices, and a higher growth potential”
Take Koforidua, Eastern Region in south Ghana (some 130,000 people). An almost completed two-bedroom house with double garage and a large plot surrounding it trades in Koforidua for GH₵ 249,600 (Fixed USD price: $ 64,000).
By investing in smaller cities, real estate developers and industry professionals benefit from lower operating costs, greater space and scenery for construction, lower costs for resources and building materials. While bigger economic capitals have the advantage over smaller, lesser known cities — due to greater recognition around the world — cheaper rental prices, less competition, and a higher growth potential is enabling smaller emerging cities in Africa to rise to the challenge.
Coupled with reliable broadband and state-of-the-art medical services, smaller African cities — oftentimes a step away from breathtaking natural beauty — are to become your idea of a city of the 21st century.
Get smart about attracting investors
The picture is not without pitfalls of course. Laura Mann, International Development department at London School of Economics (LSE), observes that on the national level African policy-makers should think much more strategically about how African nations can capture value within their economies through the proliferation of information technologies and the deepening of the digital economy.
“National policies that fund local R&D and training programmes”
Recent reports by institutions like UNECA, UNCTAD and UNIDO suggest that African governments need to be extremely strategic in their dealings with foreign companies; to make sure those investments and activities contribute to raising the skill level in African countries, providing outsourcing and procurement opportunities for local businesses and paying taxes that can fund local R&D and training programmes.
But it is a two-way road. National government in Kenya tried to promote Business Process Outsourcing (BPO) by subsidising the cost of bandwidth to all BPO companies that wanted to try to engage in the sector. Some unskilled local companies received that support, and harmed the overall reputation of Kenyan firms in the eyes of international clients.
“Making African economies more predictable”
As more African governments shift to e-governance and more city dwellers use mobiles, internet connections and smartcards, massive amounts of transactional data is generated. This makes African economies more predictable, smaller cities in Africa more visible to foreign investors. Back to LSE wisdom on smart cities in Africa:
Behind the widely circulated images of slum dwellers using mobile technologies to improve daily lives, the dominance of large ICT companies, a splintered urban landscape, land dispossession and the securitisation of urban space reveal a more complicated potential smart urban future.
Smaller African cities will have to be smart about opening markets and opportunities, a policy that should primarily contribute to development of their own communities — rather than large corporations or the local elites.
Beyond the narrative that tends to put smart city Africa into the realm of technology, smaller African cities should guard against becoming exclusive enclaves or archipelagos of high technology. Smart African communities should prioritize people and avoid withdrawing from the wider city.
“Getting beyong exclusive enclaves and archipelagos of high technology”
Function and role – as opposed to population size – are now defining an intermediary city’s status within the global network of cities. In this context, talent attraction and retention become factors that differentiate Gondar, a secondary city of 358,257 in the north of Ethiopia from Kikwit (home to some 400,000 people) in the southwestern part of the Democratic Republic of Congo.
Smart specialization strategies promoted by the European Union are designed to encourage each region to identify transformation priorities that reflect and amplify existing local structures and competencies, and thus produce original and unique competitive advantages.
Andy Kozlov: You say that Maramoja is not just a smart mobility app. It’s rather about building trust in a community. How so? What are the applications that you promote apart from connecting citizens with their trusted taxi driver?
MARAMOJA is absolutely about smart mobility. We just happen to believe that facilitating trust is the most important contribution we can make to the mobility (and eventually) larger on-demand economy. Many of the challenges people face when trying to move around Nairobi and other cities are about interactions between people – trust. Do I trust this motorbike taxi to be a safe rider with a well-maintained bike? Do I trust this taxi driver to charge me a fair price and get me there safely? Do I trust this person to carry my son?
As for other applications of our trust engine, you could think of it like this – MARAMOJA the mobility solution is an open product – our trust engine is in limited beta with our mobility clients but we have big eyes to the future and see ourselves playing a key role as the “trust” infrastructure layer for the on-demand economy.
Andy Kozlov: For many from the international crowd, when you talk about Kenya and mobile tech, it is Ushahidi that springs to mind. Has Ushahidi had any influence whatsoever on Maramoja and the values behind your app?
Ushahidi is definitely one of the great success stories from Kenya but that is 2007 already. There have been so many great technological advances out of Kenya in the 9 years since that there’s really no shortage of places to look to for inspiration. I would say that the values behind Ushahidi very much reflect the general values of the startup culture in Nairobi – which if I had to put into words I would say is about technology for people – technology that builds on our humanity and the bonds between us, rather than replace or diminish them. MARAMOJA is no different. We reconceptualized the taxi app from the ground up to be about relationships and trust. Human concepts. In doing so, we have built something in the trust engine that we believe will also have global application.
Andy Kozlov: How different are you from Uber?
Our basic mobility service offering is similar, transport on-demand through an app, but the similarities end there. I think most of our core differences stem from our values. We are built around people and relationships. As such, we always try to align incentives of ourselves, our drivers, and passengers. Take pricing – Uber uses time & distance which immediately puts the driver and passenger at conflict. We use zone-based pricing because it eliminates this conflict between driver and passenger. We also recognize that not every car on the market here is newer than 6 years old, so rather than excluding many great drivers we find that allowing our users to choose between the various available drivers that have accepted their ride, based on their proximity, their relationship with the driver, their car, credentials or any other factor that the client personally cares about.
Andy Kozlov: Superficially speaking, any other IT group in some other African city can come up with a solution similar to Maramoja. Still, what makes you stand out? Why are you convinced there is room for expansion for your app into other African countries?
Perhaps some other IT group could devise a similar solution but our UX and technology will set us apart from copycats. Trust is an incredibly emotional concept that relies great design to convey that human quality through an app. Co-Founder and Creative Director Polina Kazak has been with the company since day one. She creates that emotional connection with our users that gives the feeling of comfort, and security that can only come with working with trusted service providers. The company hit a major turning point when we met Bastian Blankenburg, PhD, who serves as MARAMOJA’s CTO. Bastian is a brilliant computer scientist with tremendous expertise artificial intelligence and machine learning as they pertain to trust. In short, I suppose I can say it will be our people that set us apart. I couldn’t imagine a more purpose-built team to build the future of trust and on-demand than the MARAMOJA crew.
Andy Kozlov: In what African cities can we expect to use your app by early 2017? Will the first solution on offer always be trusted taxi service-related?
You’ll have to wait and see…but don’t be surprised when we show up near you.
Andy Kozlov: How come your team of developers has a German and a Belorussian specialists?
There’s no particular reason our CTO is German or our Creative Director Belorussian any more than there’s a reason that the CEO is American. Our first CTO was Kenyan, it just so happened to not work out with him. Each of our team members have their jobs because they are the absolute perfect people to fill them – nothing to do with origin. But one of the great things about the Nairobi tech scene, is that the talent pool really is global. We can draw the best from around the world and will continue to do so.
Andy Kozlov: Did they get attracted to the project specifically because of the exciting prospect to help urban communities in Kenya?
No doubt, each of is inspired by and believes that our work has a positive impact on Kenyans. I think they got attracted to the project for the enormity of my vision, of where we could go, and the revolution we could bring to the global on-demand economy. And they brought their own visions too – we were lucky enough that our visions really jived with each others and we instantly began making great strides together. There’s no feeling in the world like being part of a great team.