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Africa's lack of addresses must be addressed
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Over the last decade, thousands of AI startups have launched globally, including in Africa.
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Across the world, addresses are how we find our way around.
Places have names, street numbers, and postal codes.
But in Africa, itās not that simple.
In Cape Verde, 90% of streets donāt have names.
And for a long time, Tanzania had only 173,000 postal boxes to 65 million people.
Zoom out across Africa, and there are 440 million people without a physical address.
This creates a host of problems:
People get locked out of the formal economy - they canāt transact freely, get bank loans easily or receive deliveries
Itās harder for emergency services to find people
And businesses have a harder time serving their customers.
Three months ago, Nigerian fintechs had to spend $1 million to physically verify 1.5 million POS agents - or risk being on the bad side of the law.
Verifications like this would normally be easy to do with an address database.
But in Africa, those are either fragmented, outdated or just donāt exist.
This problem is set to get much worse because ā¦
African cities are exploding
Thirty years ago, 71% of Africans lived in rural areas.
Today, itās down to 50%.
Lagos, Nigeria is Africaās biggest city with 24 million residents.
Every day, 5,000 people move there, hoping to make a living.
Thatās 35,000 a week, and one million folks a year.
But itās not just Nigeria.
Kinshasa was home to roughly six million Congolese people 20 years ago.
Today, over 14 million people live there.
Kinshasa, the capital of the Democratic Republic of the Congo, is home to 14 million people. Source: State Magazine
More Africans now live in cities than ever - mostly without an address.
Half the continentās urban population lives in āslum householdsā and informal settlements.
In Nairobi, 60% of the population lives in these settlements.
People here struggle to get basics like water, electricity - and have no addresses.
Governments also canāt properly serve them (or tax them) as theyāre off the grid.
But assigning addresses costs a lot of time and money - with no guarantee it will work.
In 2017, Ghana spent GHāµ 10 million ($2.5 million) building GhanaPostGPS, an app that gives people shareable addresses using GPS technology.
Seven years later, only 10% of the country uses it.
But the problem isnāt slowing down - and the cities keep growing.
In 25 years, 10 of the worldās biggest cities will be in Africa.
If the problem persists, more Africans will be locked out of financial services, healthcare, and e-commerce.
But the burden wonāt be for regular folks alone to carry.
Two sides to every story problem
Every year, businesses spend big bucks getting to know their customers. Itās literally called Know Your Customer (KYC).
They need to know their identity, what they do, and where they live.
But thatās hard to do when your customers live in ārural citiesā with no address.
As Africaās digital economy grew over the last decade, more businesses and customers moved online.
Startups signed up customers by the millions - but they still needed to find out where their customers lived.
Remember the 1.5 million POS agents? They needed to be verified because 9% of payment fraud in Nigeria happened via POS last year.
Things like this force regulators to ask two questions about the customers:
Who are they?
And where are they?
And if companies have the wrong answer, thatās trouble.
They either have to drop those customers, restrict the services theyāre offered, or spend money verifying them.
For these companies, the deal is higher costs and slower growth.
But is there a better way to find people?
Thereās hardly a problem in Africa without some startup trying to fix it.
And the same is true for addresses.
Beyond government projects like GhanaPostGPS, startups have been making moves on the problem:
MPost is helping people turn their phone numbers into postal addresses.
YouVerify uses field agents to verify customer addresses and identities
VerifyMe confirms addresses through an API that accesses a phoneās GPS system.
And What3Words is using human-readable words to map out 3x3 meter grids for every place on Earth.
But their impact on the problem remains to be felt outside the world of apps and startups.
They mostly focus on novel ways to help businesses verify user location - either via mobile or some other means.
But on the ground, the addressing problem persists, in these rural cities that get bigger every day.
And Africa needs a better, more universal way of addressing people.
Do you know any other companies trying to solve Africaās addressing problem?
Hit reply and let us know.
And that's a wrap!
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