/ 8 July 2022

African innovation in technology can spark an economic boom

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As early as 2025, Africa’s internet economy could contribute nearly $180-billion to the continent’s economy, equating to 5.2% of the continent’s GDP. The burgeoning tech sector is being spurred by private consumption, strong developer talent, public and private investment, new government policies and regulations, along with investments in infrastructure. But progress needs to be made for the sector to reach its full potential.

Africa still faces myriad challenges when it comes to competing in the global tech space. From the availability of capital, the cost of technology and tech talent to low internet access, there are hurdles that need to be overcome which companies in developed economies don’t need to consider. This makes it harder to conquer, but results in more innovation, and our solutions are better stress-tested. Therefore, when we win, we win big.

African tech start-ups are coding the way 

In 2020, African tech start-ups attained more funding and investment than in any previous year and, in 2021, this increased by a further 47%. Not only does this mean that local tech businesses can compete with technology providers elsewhere in the world, but this also has positive spinoffs for the continent such as job creation.

African tech start-ups have emerged largely in response to the inability of the continent to adopt certain technologies because these were built around the needs and infrastructure of developed nations. Many of these technologies are now being replaced with locally made modern equivalents but the pressure to innovate is higher than it is overseas. Therefore, African tech has the potential to leapfrog existing technologies and, in doing so, shape the continent’s future, while driving the fourth industrial revolution. This has been most obvious in cell phone technology, considering that Africa is a mobile-first continent. 

According to findings from Statista, the majority of web traffic in leading digital markets in Africa originates from cell phones. In Nigeria, for instance, which is one of the countries with the largest number of internet users worldwide, 82% of web traffic is generated through smartphones and roughly 16% through PC devices. This is because cell phone connections are far cheaper and do not depend on the infrastructure required for traditional desktop PCs with fixed-line internet connections.

It’s time for progress to be made

For growth in Africa’s tech sector to reach new heights, there are several roadblocks that could hinder tech development on the continent. For starters, the cost of technology, such as hardware, is disproportionately expensive because of global pricing in the face of relatively weak local currencies measured against the US dollar. Similarly, Africa is experiencing a tech brain drain as skilled employees look overseas for higher salaries that African companies often can’t match. For this reason African technologists can’t compete as low-cost providers because they must compete for resources, not only on the continent but from the global marketplace.

Research by Google and the International Finance Corporation has said that only 40% of Africans have internet access. It’s important to note that most products are designed to operate while connected to the internet, so those implementing tech on the continent need to be cognisant of this and provide solutions that work offline too.

Electricity penetration is a similar problem, with more than 640 million Africans literally being left in the dark. Not only must this be taken into account when designing solutions for the continent, but innovations need to be developed to help ensure universal energy access by 2030 — the aim of the United Nations’ sustainable development goal seven. Constraints such as these need to be designed around, along with others such as limited road and telecoms infrastructure. 

Opportunity is on the horizon 

On a positive note, the hurdles faced present an opportunity for African technologists to provide solutions and be more competitive. Technologies that can circumvent these problems could also have other applications in healthcare, financial services and education, for example — all of which are African imperatives.

The time is now for us to harness the opportunities that the tech sector has to offer to remain competitive in an ever-evolving digital world and cement the continent as a tech hub. This will have knock-on effects because it will expand innovation, create jobs and improve technology access for all. African tech must take centre stage and show the world what we have to offer.