The rise of African Technology Giants
By Emmanuel Allottey
Technology offers Africa the opportunity to leapfrog from a poverty stricken, under-developed continent to become leaders in the 4th Industrial revolution. The African continent has remained resilient in the face of numerous challenges, however an emerging area for growth and dominance is in the technology industry.
The African Continental Free Trade Area will create the largest single market with a combined gross domestic product (GDP) of $3.4 trillion. This will facilitate regional economic communities to become more integrated with increased market access for technology companies.
Africa has the enabling factors that make the growth of technology companies conducive. The continent will have the youngest, fastest growing, and increasingly urbanized workforce by 2050. In addition, the African continent has the highest mobile penetration and fastest growing digital adoption rate in the world.
All these factors present the perfect combination for exponential growth and economic prosperity. The explosion of technology hubs and incubation centres is driving a start-up and innovation culture on the continent supported by partnership with businesses and governments.
Nigeria, home of the largest economy in Africa is the continent’s leader in technology start-ups. Jumia was the pioneer of Africa’s first e-commerce service that listed on the New York stock exchange (NYSE). Another notable innovation that has emerged in East Africa is Mpesa – a mobile phone based money transfer service, payments and micro-financing service, that is driving financial inclusion. Cities that have emerged as regional tech hubs are Cape Town, Cairo, and Nairobi boasting accelerator ecosystems, homegrown unicorns and big tech offices.
A report from Google and the International Finance Corporation (IFC) shows that the technology start-up ecosystem is helping drive Africa’s internet economy towards a projected value of $180 billion by 2025. The leading sectors of growth in Africa’s internet economy are financial technology (fintech), e-commerce, health, e-logistics, e-mobility and food delivery. Key drivers of this transformation include increased access to more affordable and higher-speed Internet across the continent triggered by the coronavirus pandemic.
African technology companies are facing competition from foreign technology companies setting up headquarters in Africa. Twitter recently announced its African headquarters will be in Ghana. Amazon, the biggest company in the world has greenlighted South Africa to be the home to its African Headquarters. Google has opened an artificial intelligence lab in Ghana, the first for the company on the continent.
The emergence of technology giants has the potential to leapfrog Africa into the 4th industrial revolution with the resilient growth of the African technology sector.