Africa to Become a Global Leader in Tech Startups

Africa has already pioneered many innovations that are transforming the world.

FREMONT, CA: Technology is a key driver of prosperity in the twenty-first century. It plays a crucial role in unlocking opportunities, fostering economic growth, and fostering development in all industries, from agriculture to education. Its foundation is a thriving startup ecosystem and an environment that fosters innovation. An audacious national and regional strategy for creating a critical mass of technology startups is necessary to maximize its benefits. Fostering technology startups across sectors will increase productivity, create jobs, and find new solutions to countries' challenges.

Africa is already at the forefront of numerous innovations transforming the world. Kenya's M-Pesa and Nigeria's world-leading fintech innovations set the continent decades ahead of the rest of the world regarding financial technology. African startups have great potential as the continent with the largest free-trade area and the most entrepreneurial population. However, burdensome regulations, limited funding, and highly fragmented markets are impeding the growth of startups. Africa is currently home to only 0.02 percent of the global startup ecosystem's value; whereas the worldwide startup ecosystem is worth $3.8 trillion, Africa's contribution is only $6.6 billion. Leaders across the continent are implementing innovative measures to foster technological innovation, which are beginning to bear fruit. The continent of startups has enormous potential, but more needs to be done to realize it.

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Governments in African nations rely on the digital economy to create opportunities that improve public services and expedite the attainment of the SDGs.

Thriving tech ecosystems primarily fuel the continent's economic growth. Africa's infrastructure investment gap is between $68 billion and $108 billion annually, yet the continent's population will reach 2.5 billion by 2050. The digital economy could contribute $300 billion to Africa's GDP by 2025, representing an annual growth rate of 10 percent. In Nigeria, between 2010 and 2019, the technology sector contributed more to the country's GDP than the oil and gas sector. In contrast, Kenya's ICT sector has contributed up to 8 percent of the country's GDP through IT-enabled services (ITES) and has created 250,000 jobs by the end of 2020. This example demonstrates that in addition to GDP, the tech-enabled sector can significantly contribute to job creation, which could be crucial to resolving the continent's growing youth unemployment crisis.

African nations must be creators and consumers to maximize the benefits of the technological revolution. Building thriving tech ecosystems in Africa places the continent on the path to digital sovereignty: developing the technology and establishing the rules that will shape the global future, driving the Fourth Industrial Revolution instead of being driven by it. Technology had allowed Africa to bypass legacy innovations, such as using mobile phones instead of landlines and adopting e-banking and mobile money when traditional bank rates were low. Africa's ability to shape its digital future will be accelerated by its ability to produce more technology.

Technology can dramatically improve the living conditions of all people by transforming the delivery of education and healthcare, enhancing our capacity to produce food for a growing population, and protecting individuals from escalating climate crises. Still in the development process are the technological innovations that will alter the course of history by resolving persistent problems. But the closer the creators of these technologies are to the issues they address, the more effective those technologies will likely be. Africa should be the driving force behind innovation for Africa.

A thriving technology sector can aid economic recovery from COVID. The COVID-19 crisis has caused an unprecedented economic shock in Africa. In recovery, African governments and regional bodies face a formidable challenge. Rapid recovery from the pandemic, economic growth, and job creation will necessitate the identification of new growth sectors. African governments must swiftly develop and implement a digital monetary policy that will open and connect economies and create opportunities for the continent's expanding youth population.

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