I have been in Kigali for four days. Two days ago, I took a moto (Rwanda’s version of Nigeria’s okada) to the gym. We agreed on five hundred francs (about thirty US cents) for a one-kilometre ride, which is about what these things cost here. When we arrived, I handed him a thousand-franc note and waited for my change.
He did not have it.
What he did instead, without missing a beat, was reach into his pocket and pull out the smallest phone I have seen in years. Not a smartphone. A small grey feature phone, the kind you can buy for ten dollars in any market on this continent. He asked for my number. He was going to send me the five hundred francs through mobile money. Mobile money is a way of sending cash through a basic mobile phone account. In Rwanda, Kenya, Uganda, and a growing list of other African countries, it is the default way most people pay for most things.
I told him I did not have a Rwandan number yet, and had not set up mobile money. He looked surprised. Not annoyed. Surprised. And that surprise told me everything. In his world, the question “what is your number” was not a request. It was an assumption. He was not asking whether I had mobile money. He was asking which number to send it to.
When I confirmed I genuinely could not receive it, he sighed, parked the bike, walked across the road to a petrol station, came back with five hundred francs in cash, handed it to me, and we both went on with our days.
I have been thinking about that small moment ever since.
The moto rider does not speak much English. He almost certainly does not have a formal bank account. He has never read a Harvard Business Review article. He has no LinkedIn profile, no MBA, no laptop.And yet his default tool for settling a tiny debt is a piece of digital financial infrastructure more elegant, in its way, than anything I have used in London or New York. It works without a bank account. It works without a smartphone. It works for people the formal financial system has never tried to reach.
The friction I assumed would define the transaction, the absence of change, did not exist for him. The friction only appeared when I, the foreigner with the smartphone and the international bank cards, turned out to be the one without the right tool.
This is how the future is currently arriving in Africa. Not in the way magazines describe it, with photos of skyscrapers and tech hubs. In the way it actually arrives. On the back of a moto. In the hand of a man who barely earns a thousand dollars a year, settling a fifty-cent debt without thinking.
I want to tell you what I think this means for young Africans trying to build something in the next ten years. To do that, I have to introduce you to an economist who died in 2013, and who I am increasingly convinced was writing about Kigali in 2026 without knowing it.
The Question Coase Asked
Ronald Coase, the British-born economist who spent most of his career at the University of Chicago, won the Nobel Prize in Economics in 1991. He spent his life working on a question that sounds, at first, almost too simple to be worth asking.
If markets are so efficient, why do firms exist at all?
Why does Apple have a hundred and fifty thousand employees inside a single company, instead of contracting out every function to specialists in an open market? Why does any business own anything, hire anyone, or hold anything inside its walls, when the market is right there, ready to provide?
His answer, published in a 1937 paper called The Nature of the Firm, has shaped how economists think about business ever since. Using the market, he argued, is not free. Finding the right supplier costs time. Negotiating a contract costs time. Monitoring performance costs time. Enforcing agreements costs time and lawyers and, occasionally, courts. These are called transaction costs, and they are the friction that builds up around every market exchange.
Firms exist, Coase said, because there is a point at which it becomes cheaper to coordinate an activity inside a company than to keep buying it from the market. When transaction costs are high, firms get larger. When transaction costs fall, firms get smaller.
Now look back at the moto rider. The five-hundred-franc debt he owed me was, in Coase’s language, a tiny transaction with a small but real cost attached. In 1995, settling that debt in cash required him to have exact change, or me to wave it off, or both of us to spend five minutes negotiating. The transaction cost was high relative to the value of the trade. In 2026, with mobile money, the transaction cost is effectively zero. He could have sent me the five hundred francs while still on the bike, in less time than it took him to put on his helmet.
That is what mobile money did to one specific kind of transaction. It collapsed the friction. And when transaction costs collapse, the shape of what is possible changes.
The First Leapfrog
You have heard versions of this story before. Africa skipped the landline and went straight to the mobile phone. Africa skipped the bank branch and went straight to M-Pesa, the mobile money platform Kenya pioneered in 2007. Africa is skipping the electricity grid in many places and going straight to solar. Each of these is an example of what economists call leapfrogging, where a region that lacks legacy infrastructure adopts a newer technology faster than the regions that built the legacy in the first place.
The pattern is real. The reason Africa leapfrogs is not that Africans are uniquely innovative, though many are. It is that the institutional cost of using the old technology was always higher here. A landline required a national copper network nobody could afford to build. A bank account required a bank branch nobody could afford to staff. The infrastructure was not just expensive. It was structurally unavailable. And so when a cheaper, lighter alternative arrived, there was nothing to defend against it. The new thing won by default.
This is the unfashionable truth about leapfrogging. It happens because the place that leapfrogs had no other option. The constraint, looked at later, becomes the advantage.
I bring this up because the same pattern is about to repeat at a much larger scale, and almost nobody outside a few specialised conversations is paying attention.
The Next Leapfrog
The previous African leapfrogs replaced specific pieces of infrastructure. A phone network. A banking network. An electricity grid. Each one mattered. None of them changed the shape of business itself.
What is coming next is different. Artificial intelligence is not replacing a piece of infrastructure. It is replacing the firm.
Think back to Coase. Firms exist because coordinating activities inside a company is cheaper than coordinating them through the market. Every employee on the payroll, every department on the org chart, every layer of management exists because the market alternative had too much friction. The legal department exists because finding lawyers for every contract was too expensive. The customer success team exists because monitoring relationships through arms-length transactions was unreliable. The operations team exists because coordinating across time zones, languages, and time pressures used to require human judgment the market could not deliver on demand.
What AI is doing, in front of our eyes, is collapsing every one of those transaction costs. A contract that used to require a lawyer can now be drafted by a model in thirty seconds. A customer email that used to require a support agent can be answered immediately. A research task that used to require an analyst can be done by a tool that costs twenty dollars a month. A project that used to require a coordinator can be managed by an agent. The friction that used to justify hiring is being compressed, function by function, into something close to zero.
The optimal firm is getting smaller. Not because companies are firing people for sport, but because the Coase calculation, the one that says “is it cheaper to do this inside or buy it on the market,” is tilting toward the market in ways it never has before. A three-person operation in 2026 can do what a fifty-person operation did in 2015. A one-person operation can, in some categories, do what a small company did in 2010.
The young African entrepreneur is walking into this world with no legacy firm to defend.
Why This Matters For Africa Specifically
Western entrepreneurship in the twentieth century was built on three pillars. Cheap capital, dense institutional infrastructure, and large domestic markets. The young Stanford graduate raising a Series A in 2010 could hire fifty people, lean on a hundred years of corporate law, sell to two hundred million Americans, and grow inside a system that was, broadly, designed to support him.
The young Lagos graduate of 2010 had access to none of that. Capital was scarce and expensive. Contract enforcement was slow. The home market was small and fragmented. Talent that wanted to work for a serious company often left for the West. For a long time these were considered structural disadvantages, and in the era of large firms they genuinely were.
What changes in the AI era is that every one of those Western pillars is becoming less load-bearing. Cheap capital matters less when the optimal firm is small. Dense institutional infrastructure matters less when AI can simulate large parts of what the institutions used to provide. Large domestic markets matter less when AI removes the friction of selling across borders. The advantages that justified the twentieth-century corporation are losing their force.
Meanwhile, the disposition that African entrepreneurs developed under constraint, the lean operating instinct, the suspicion of overhead, the comfort with doing more with less, the willingness to coordinate across borders because you had no choice, is suddenly the dominant model. The features that used to be liabilities are turning into the playbook. The Lagos founder who learned to run a business with three people because she could not afford fifty is now closer to the future than the San Francisco founder still trying to wind down his bloated org.
This is the leapfrog moment. And it is not a metaphor. It is a structural inversion. The young African entrepreneur is not behind. She is, in the categories AI is reshaping fastest, ahead.
What This Looks Like In Practice
The signs are already here, if you look for them.
A two-person product studio in Nairobi serving customers in Berlin. A solo developer in Lagos earning more than the senior engineers in his old job, working entirely with US clients, with three AI agents doing the work that would have required a small team five years ago. A growth marketing operator in Accra running campaigns for three different software companies across three time zones, using AI to draft, translate, and analyse what would once have required an agency.
What I want every young African reading this to understand is that this moment is not happening to you. It is happening for you. The conditions under which you grew up, the constraints that taught you to do more with less, the borders you learned to work across, the institutions you learned to live without, are about to become the things the rest of the world is trying to learn. You do not need to wait for Africa to catch up to the West. The West is, in many ways, the one that needs to catch up.
The Moto Rider, Again
I think about the moto rider often now. He is, in his small way, a perfect illustration of what is happening across the continent. A man with no formal education, no English, no laptop, no bank account, settling debts on a feature phone with a fluency an MBA in London would still find impressive.
He has already leapfrogged. He does not know that he has, because the leapfrog is the air he breathes. The future, for him, is just the present.
The young African entrepreneur is in the same position. The next leapfrog is already underway. AI is not coming. It is here. The Coase calculation is tilting in your favour for the first time in a hundred years.
The only question is whether you walk into it with the same easy confidence as the moto rider, who never asked permission to use the future. He just reached into his pocket, pulled out the tool, and used it.
