Send me your locationšŸ“

Africa's lack of addresses must be addressed

Welcome to Tech Safari!

Your tour guide on African Tech šŸ§­

Hello to the new folks who have joined the Safari since the last edition.

If you haven't subscribed, join thousands of smart folks curious about tech in Africa.

Hey šŸ‘‹šŸ½ Caleb and Sheriff here.

Over the last decade, thousands of AI startups have launched globally, including in Africa.

But founders still need more support to accelerate the growth of AI in Africa.

ā€‹Thatā€™s why Tech Safari has teamed up with Resilience17, an AI venture studio, to explore how African founders can ā€œBuild AI Startups in Africaā€.

Itā€™s happening on Wednesday, the 28th of August at 4pm WAT. You can save yourself a seat here.

Before we dive in, join us for our next Tech Safari Mixer with Latitude59 in Nairobi on Thursday, the 29th of August.

Itā€™s the pre-launch party for the second edition of Latitude59 Kenya thatā€™s happening later this year.

Expect a great time of connection and a fun, quick fireside chat with Caleb Maru (yours truly) and Liisi Org, CEO of Latitude59.

Spots are limited and early bird tickets are already selling out.

Get yours here.

Now, letā€™s get into this weekā€™s edition!

Across the world, addresses are how we find our way around.

Places have names, street numbers, and postal codes.

But in Africa, itā€™s not that simple.

In Cape Verde, 90% of streets donā€™t 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 canā€™t transact freely, get bank loans easily or receive deliveries

  • Itā€™s 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But in Africa, those are either fragmented, outdated or just donā€™t exist.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, itā€™s down to 50%.

Lagos, Nigeria is Africaā€™s biggest city with 24 million residents.

Every day, 5,000 people move there, hoping to make a living.

Thatā€™s 35,000 a week, and one million folks a year.

But itā€™s 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 continentā€™s urban population lives in ā€œslum 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 canā€™t properly serve them (or tax them) as theyā€™re off the grid.

But assigning addresses costs a lot of time and money - with no guarantee it will work.

In 2017, Ghana spent GHā‚µ 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 isnā€™t slowing down - and the cities keep growing.

In 25 years, 10 of the worldā€™s 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 wonā€™t be for regular folks alone to carry.

Two sides to every story problem

Every year, businesses spend big bucks getting to know their customers. Itā€™s literally called Know Your Customer (KYC).

They need to know their identity, what they do, and where they live.

But thatā€™s hard to do when your customers live in ā€œrural citiesā€ with no address.

As Africaā€™s 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, thatā€™s trouble.

They either have to drop those customers, restrict the services theyā€™re 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?

Thereā€™s 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 phoneā€™s 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 Africaā€™s addressing problem?

Hit reply and let us know.

And that's a wrap!

What did you think of today's edition?

Login or Subscribe to participate in polls.

Did we miss anything? Or just want to say hey? I'd love to hear from you! You can:

And if you don't already, make sure to sign up to get this in your inbox next week.

And remember - it just takes just five referrals to join our WhatsApp community šŸ‘‡šŸ¾

Catch you soon!