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Rural mobility development has been a long-lasting problem in Africa.
Currently, 450 million people with more than 70% of the rural population lack access to mobility which is primarily caused by the lack of infrastructure and the transport systems.
This has been significantly impacting the agricultural sector the African economy where for instance in Zimbabwe, 70% of the population are engaging in agriculture and creating 15-20% of the country’s GDP.
Hence, improving the rural mobility in Africa is a crucial step to achieve African development.
However, several issues need to be tackled including:
- Integrating zero-emissions to comply with the sustainable growth of the economy
- Implementation of technologies and business models that fits the market demand to realize the ‘actual’ demand raised from the rural areas
- Reduce the cost incurred for the users
New start-ups and businesses have come up with effective solutions to tackle these problems:
1. Electric mobility (EV) integrated with technology
Electric mobility is a promising solution because of the following two reasons.
Firstly, electric mobility allows to achieve the improvements in rural mobility with zero emissions. By producing electricity through sources such as solar energy, the mobilities can run almost at negligible emissions when compared to internal combustion engine (ICE) vehicles. This would allow to sustainably develop the African economy.
Secondly, trends and regulations in Africa are in favor for the development e-mobility. The Africa E-Mobility Alliance (AfEMA) states that by 2030, 30% of all vehicles sold in Africa will be Zero Emission Vehicles. Furthermore, changes in taxations are creating a shift in incentives to choose electric mobility over other vehicles. For the 2023-2024 fiscal year, several African governments have been decreasing the value-added taxes (VAT) and excise duty for electric mobility with some countries such as Tanzania has abolished the excise duty maximum of 44% (see below).
2. Carbon credits as a scheme to finance the upfront costs
Carbon credits represent a unit of measurement for the reduction or removal of one metric ton of CO2 equivalent emissions. These credits are earned through emission reduction projects that go beyond business-as-usual practices. By investing in these projects, organizations can generate carbon credits that can be sold or traded on the carbon market. Carbon credits can be used as a financial mechanism to support and offset the acquisition and maintenance cost of the capital required for operations.
The price for the carbon credits has been observed to have a significant surge over the past few years (see below). This will enhance the importance of investments to emission reduction projects and utilizing the revenue to finance the development of the business.
Who are the key players for the rural mobility improvement?
Ox Delivers is a UK-Rwandan company founded in 2020.
Seeing the situation in African trucks which imports end-of-life trucks which were unreliable due to the rough terrain, expensive fuel cost and maintenance cost, Ox Delivers developed an electric truck specializing in high-carrying capacity, extreme durability, all-terrain capability with low-cost manufacture and the ability to be shipped flat-pack.
Ox Delivers has integrated technological advancements to meet the demand of on-demand logistics utilizing their trucks. The company has developed a digital platform for the dispatchers, drivers and customers to provide a high-quality logistics service.
The technology is specific for Rwanda where for example, the app is developed to be used in a 2G feature phone (unlike smartphone) which 80% of the people in Rwanda has access to.
By introducing e-mobility with a service and technology that fits the demand of rural Rwanda, Ox Delivers achieved growth of 40% month-on-month since its launch.
MFA is a company founded in 2018 and is operating in Zimbabwe.
MFA aims to bring electric vehicle revolution to ordinary people especially women and in rural areas. This is to solve the problem of rural women carrying a great burden of providing water and fuel for their households as well as helping rural farmers overcome the barriers of mobility to gain better access to the market.
MFA leverages its electric tricycles, along with an off-grid charging station and battery swapping model to create an innovative business model in rural Zimbabwe.
The company trained women how to drive tricycles, trained technicians how to assembly and repair. Because of these implementations, MFA was able to leverage its vehicles to conduct operations such as fleets for small-scale farmers (B2C), fleets for service delivery (B2G), and fleets for agricultural business and aggregators (B2B).
This business model will enable MFA to provide a standardized, replicable, scalable and holistic mobility solution across the whole rural Africa.
Kisii Smart Community (KSC) (https://www.kisiisc.org/)
KSC is a Kenyan company founded Toyota Mobility Foundation. The company currently in Kisii County.
KSC aims to improve Kenyan sustainable development by improving rural livelihoods and access to goods and services through improved mobility, connectivity and access to clean energy.
By leveraging electric trikes, recyclable batteries and off-grid power generation infrastructure (Agr-E-Hubs), KSC is currently tackling the problem of first mile and last mile logistics of small-scale farmers.
To lower the cost of the logistic service, sold by kg * km, KSC leverages digital technologiesincorporating ICT and geolocations, to ensure optimized usage of all assets (EVs, batteries, charging stations, etc). KSC’s logistic platform is embedded in local value chains including dairy, banana, avocado, etc.
This embedding ensures that the EVs are used productively and create revenue which ensure the sustainability of the model.
Beyond logistics KSC also provide capacity building services to the farmers to develop entrepreneurship and supports other value addition services to further strengthen value chains and community development. This includes post-harvest processing, chilling, drying, ripening (banana), etc.
To further lower the barrier to entry for local communities and value chains, KSC is currently working to utilize carbon credits to offset the upfront costs of the charging infrastructure as well as ongoing operation and maintenance costs of the electric vehicles. By demonstrating the amount of CO2 emission being abated by using electric vehicles compared to Internal Combustion Engines) KSC will be able to register carbon credits which could be sold the voluntary carbon market. These credits could represent a significant financial resource which would allow KSC’s model to scale faster and further.
KSC aims to expand their model across Africa. This model can potentially serve as an exampl of how rural mobility in Africa can be achieved in a financially sustainable manner for businesses.
he development of African rural mobility has been a crucial problem for the development of African economy and the identified challenges are achieving zero emissions, developing effective technologies/business models and reducing costs for businesses.
In that regard, we can see players like Ox Delivers, Mobility for Africa and Kisii Smart Community tackling the development of rural Africa mobility through deployment of electric mobility, technologies and business model that meets the local demand and attempts to reduce the cost of burden through carbon credit scheme.
Electric mobility has been showing a significant growth in the world and technological advancements have been rapidly evolving throughout the past few decades. Furthermore, people are getting more and more concerned with the sustainability of the environment. With these trends behind and key innovative businesses being developed, we may be able to see a future which the mobility in rural Africa can be fully resolved and achieve economic prosperity throughout the world.