Africa has the potential to revolutionize the global technology sector by emerging as the next major technological powerhouse. Youth population growth, middle class growth, and a growing need for digital transformation are all present in this region.
The World Bank predicts that Africa’s GDP would expand by 3.4% in 2024 despite the recent global epidemic. The continent’s burgeoning technology industry, which is drawing major investment from all over the world, is largely responsible for this expansion.
In this article, we will look at the factors that make Africa likely to emerge as the next major global technology hub and what this means for companies and investors wishing to do business there. First things to consider are;
Africa’s Youth Population
Africa is home to the youngest population in the world, with more than 60% of its
population under the age of 25. This means that there is a significant pool of
tech-savvy, digitally-native talent available to the technology industry. This youthful
population is also driving demand for technologies, such as mobile applications,
e-commerce platforms, and digital banking services. As these technologies become
more prevalent, they will further accelerate Africa’s digital transformation and
position the continent as a global technology hub.
Expanding Middle Class
Africa’s expanding middle class is also driving the growth of its technology industry.
According to the African Development Bank, Africa’s middle class is expected to
triple by 2030, reaching 1.1billion people. This growing middle class has a significant
appetite for technology and is driving demand for products and services such as
smartphones, laptops, and digital entertainment. As this middle class continues to
expand, it will create a significant market for technology companies to target.
Digital Infrastructure Investments
African governments and international investors are investing heavily in digital
infrastructure across the continent. For example, the African Union launched the
Smart Africa initiative in 2013 to drive Africa’s digital transformation. This initiative
aims to connect all African countries to high-speed internet and create a common
market for ICT services.
Similarly, in 2020, Google announced plans to invest $1 billion in African startups
and digital infrastructure over the next five years. These investments in digital
infrastructure will help to create a strong foundation for the growth of Africa’s
Innovation and Entrepreneurship
African entrepreneurs and innovators are driving the growth of the continent’s
technology industry. According to a report by Partech Africa, African startups raised
$1.43 billion in funding in 2019, up from $725 million in 2018. This surge in funding
is being driven by the emergence of a vibrant startup ecosystem across the
continent, with hubs in cities such as Lagos, Nairobi, and Cape Town. African
startups are also focusing on solving local problems, such as financial inclusion,
healthcare access, and agriculture productivity. These startups are creating
innovative solutions that have the potential to transform industries and create new
Favorable Government Policies
Finally, African governments are implementing favorable policies to support the
growth of the technology industry. For example, many African countries are
implementing policies to encourage digital innovation and entrepreneurship, such as
tax incentives, startup incubators, and regulatory sandboxes. These policies are
designed to create a favorable environment for the growth of the technology
industry and attract foreign investment.
Africa is anticipated to become the next global technology hub due to
its youthful population, expanding middle class, digital infrastructure investments,
innovation and entrepreneurship, and favorable government policies. Businesses and
investors looking to enter the African market should take note of these trends and
position themselves to take advantage of the opportunities that Africa’s technology
industry presents. With the right investments and partnerships, Africa has the
potential to become a major player in the global technology industry.