Investment in African tech startups has gradually improved over the past five years. However, the tech industry on the continent has the potential to attract much more. In its "Supercharging Africa's Startups: The Continent's Path to Tech Excellence" study released February 15, the Tony Blair Institute for Global Change estimates that African startups could raise more than $90 billion by 2030. To do this, the institute suggests 10 steps to follow:
- Establish a public data-sharing platform for tech startups
- Develop innovative financing vehicles
- Unleash capital from institutional and corporate investors
- Create a single digital market by prioritizing implementation of the AfCFTA
- Generate demand for local tech solutions
- Implement legislation to support tech startups and seek their regular feedback
- Improve digital skills
- Strengthen digital infrastructure
- Boost the capability of startups and support organizations
- Launch a “pan-African Startup Network”
The document found that “pre-pandemic, 22% of the working-age population had set up their own businesses. However, cumbersome regulations, the digital-skills gap, limited funding, and fragmented markets mean that Africa accounts for just 0.2% of the value of global startups.”
Although investment in African tech startups is still low compared to other regions, it has still seen a sharp increase over the past four years. In its "Africa's Investment Report 2021," Briter Bridge revealed that the amount reached $4.9 billion in 2021, 243% higher than 2020.
The "Lions go digital: The Internet's transformative potential in Africa" report by the McKinsey Global Institute estimated that the digital economy would contribute $300 billion to Africa's GDP by 2025, providing much-needed jobs on a continent where there are three to four times more people entering the labor market than actual jobs created. A favorable ecosystem for startups in Africa could make them future job providers for the youth who are increasingly becoming fans of technology.
Muriel Edjo
