BD Insider: Africa's new AI roadmap

In today’s midweek update, we look at:

• Nigeria’s push for CNG adoption
• Kenyan drivers clash with ride-hailing companies over fare prices
• Africa’s got a new AI plan

Nigeria’s push for CNG adoption

With the rising price of petrol in Nigeria, there is some good news for ride-hailing drivers. The government has launched a new app to assist drivers in switching from petrol to compressed natural gas (CNG). The app offers real-time information on nearby conversion centres, allows users to book appointments, access discounts, and stay updated on petrol prices.

Why CNG? CNG cars use compressed natural gas as their primary fuel, offering a cleaner and more cost-effective alternative to petrol due to lower emissions. Through the Presidential CNG initiative, the Nigerian government expects this switch to reduce drivers' operational costs and potentially lead to lower passenger fares.

While the initiative holds promise, the app has had initial challenges, including technical difficulties with registration and verification.

The National Agency for Science and Engineering Infrastructure, a government agency, is playing a pivotal role by offering 50% conversion discounts to drivers who sign up and use the app. Nigeria’s ride-hailing union, the Amalgamated Union of App-based Transporters of Nigeria, has criticised the discount as insufficient, pointing out that conversion kits and installations were provided for free to the National Union of Road Transport Workers (NURTW) and the Road Transport Employers Association of Nigeria (RTEAN).

Context: While switching from petrol to CNG is a positive move, potential adopters face some challenges. The initial conversion costs might be steep for ride-hailing drivers, with the federal government announcing in December 2024 that Nigerians could expect to pay between ₦300,000 and ₦600,000 for the conversion. 

Additionally, CNG cars typically have a lower driving range compared to petrol cars due to the smaller capacity of CNG tanks. Larger tanks can also occupy more space in the vehicle, and the limited availability of CNG refuelling stations adds another layer of concern.

This isn't a new initiative by the Nigerian government. Back in 2020, the government initiated the conversion of vehicles in the Presidential fleet and the Executive Council of the Federation to run on gas. Successful implementation will be crucial for the CNG initiative to gain momentum in Nigeria.

Kenyan drivers clash with ride-hailing companies over fare prices

The dispute between drivers and ride hailing platforms in Kenya has escalated quickly. They are setting their own prices for rides and not giving rides to passengers who don't agree to pay the higher prices they've set. 

Drivers are pushing for ride-hailing companies in Kenya to raise the minimum fare from KSh180 ($1.40) to KSh300 ($2.33), a 66.67% increase. They argue that the current rates fail to cover their operational costs, including fuel, vehicle maintenance, and taxes. The drivers are also frustrated with the commission fees charged by the platforms, which they say further cut into their earnings.

This has led to strikes by drivers, including a five-day protest on July 15, as they demand higher fares to cope with the rising cost of living. Meanwhile, ride-hailing companies aim to keep fares low to attract and retain cost-conscious customers.

Uber has however cautioned drivers that charging extra fees could result in suspension or permanent removal from the platform.

Context: Previously, the Ministry of Transport and the National Transport and Safety Authority (NTSA) have tried to help drivers and ride-hailing companies agree on fare prices but so far, no agreement has been reached.

The strikes and fare disputes have disrupted transportation services in Kenya, and both parties will need to reach an agreement soon to prevent this issue from recurring.

Africa’s got a new AI plan

AI adoption in Africa could see significant growth in the coming years following the African Union's (AU) approval of a new AI strategy. This strategy aims to boost the use of AI across public and private sectors in all member states.

This strategy emphasises the importance of building local AI capacity, including infrastructure, talent, and governance frameworks. By investing in AI research, development, and education, Africa aims to reduce its reliance on foreign technology and create homegrown solutions to address its unique challenges.

The AU plans to roll out this new strategy in two phases between 2025 and 2030. The first phase (2025 to 2026) will focus on setting up governmental frameworks, national AI strategies, resource mobilisation, and capacity building. The second phase will focus on implementing core projects. 

Context: Only Mauritius, Algeria, Egypt, Rwanda, Benin and Senegal have developed national AI strategies in Africa. While countries like Nigeria, Ghana, Kenya, Ethiopia, South Africa and Uganda have taken steps to define their AI policies.

While the continent faces limited data and infrastructure hurdles, the AU's strategy signals a concerted effort to overcome these obstacles. 

Successful implementation of the strategy will require sustained political commitment, substantial investments, and a focus on developing human capital.