By Simon Mullis, technical director at Venari Security
Africa is currently booming with entrepreneurial potential. The continent has the largest free trade area in the worldand now has seven unicorns, up from zero in 2015. Not only that, but he has the highest percentage of entrepreneurs among working-age adult population from any continent in the world.
Before the pandemic, entrepreneurship was already booming, with 22% of the African population of working age having already started a new business before 2020. But with the economic difficulties caused by the pandemic and the freezing of recruitment for many companies, entrepreneurship has accelerated. Additionally, African entrepreneurship is particularly abundant in digital business, with forecasts indicating that the segment could contribute $300 billion in African GDP by 2025.
The tech scene in Africa therefore presents a key area of opportunity for companies looking to invest globally and benefit from an ambitious workforce. The continent is paving the way for new business models, new ideas and opening up to investment opportunities from all over the world.
There are, however, many areas that require further support in order to ensure that the tech sector continues to thrive in this region – here we explore the continent’s challenges in more detail.
Technology Investment Opportunity in Africa
There is a growing body of evidence to suggest that Africa is a valid consideration for investment with successful tech companies popping up every year.
The World Economic Forum has listed six African start-ups in its Tech Pioneers of 2022 – including Okra, a Nigerian fintech start-up specializing in the digitization of financial services; Access Afya, a Kenyan start-up that provides quality and affordable healthcare by leveraging patient data more efficiently; and Ampersand, a Rwandan start-up offering a battery replacement energy network for light vehicles.
Last year, eight African start-ups made the WEF list, also covering gene technology, agritech and fintech, in Ethiopia, Kenya, Ghana and Zimbabwe. The diversity and growing maturity of the tech scene offers a huge opportunity for businesses around the world to tap into the region’s talent and cross-industry expertise.
Yet, despite the African Tech Startup Funding Report noting that total annual funding for African tech start-ups increased by 1,000% between 2015 and 2021, the region continues to suffer from lack of capital and talentagainst the high demand for both from the many entrepreneurs creating the next generation of African businesses.
The potential for the tech sector to continue to thrive
Indeed, for tech companies to continue to grow and prosper in the region, there needs to be a focus on harnessing tech talent. In fact, an emerging talent bottleneck for high-growth African start-ups would be the number of professional software developers on the continent. Estimates by Google suggests that there are about 716,000, almost half of them in Egypt, Kenya, Nigeria and South Africa. The average age of these developers, at 29, is younger than the global average of 36, suggesting that support is needed to develop and steer young people into tech careers at an early age, as well as develop older employees in all areas.
The good news is that we are starting to see significant expansion of companies like Microsoft, Google and Oracle in the region, with Microsoft opening its first African development center in 2022 and aiming to hire 100 employees by 2023.
Additionally, a number of talent accelerators have been created with the aim of establishing new paths to technology in the region, such as Andela, AltSchool, Unnivelcity and Decagon – the latter aiming to train 10,000 software engineers every year. the 6 months.
Sector investments are also essential. Cybersecurity experts Venari Security have established a new center of excellence in Tunisia, creating a hub to nurture some of the best talent Tunisia has to offer and generate new opportunities for cybersecurity specialists.
Tunisia itself has a booming tech scene – with more than 1,800 companies in the IT sector employing nearly 80,000 people, which contributed 7.5% of GDP in 2018. Tunisia also ranks very well in terms of the quality of vocational training, skills of graduates and easy access to labor – making it an attractive region for cyber and other specialized technologies.
Meeting market challenges in the region
Impressive, it is estimated that by 2030, technology financing will reach US$90 billion in Africa. However, African governments must ensure that these investments remain attractive in order to reduce the risks of stagnation.
Indeed, the lack of harmonization in the region is currently one of the biggest obstacles for start-ups, leading to complex legislation that can be off-putting for investors. Currently, regulations differ across the 54 African countries, making it difficult for investors to expand across the continent. The regulatory landscape can also make it difficult for employees to earn and own stocks, further limiting benefits for the startup scene.
Although far from simple to solve, it is positive to see the work being done by the African Union and the AfCFTA to advance development in this area. Collaboration between government and industry leaders will be needed to design a common and unified technology policy framework that will facilitate the expansion of start-ups into regional markets.
Develop ecosystems or technological clusters like the one developed in Odense, Denmark for the robotics and automation industry, which mimics a regional Silicon Valley tech scene, is vital. A strong pan-African network of technology start-ups, underpinned by a collaborative digital economic policy put in place between African governments, will help connect the market and open up investment opportunities and jobs.
A hub of talent and technological opportunities
The tech sector can be a catalyst and ultimate equalizer for growing economies – and African entrepreneurs have shown that there is a huge appetite for a range of tech start-ups to thrive in the region.
As we have seen, global companies have a role to play in establishing their own regional presence in African countries, with a focus on developing and encouraging more workers into technology. But there are also hurdles that government, business and investors need to overcome together, to reduce investment risks and encourage the opportunity for start-ups to grow and grow in the region.
The future is bright and Africa is buzzing with tech entrepreneurship – a key driver of the region’s post-pandemic recovery. With support to build more targeted tech clusters, investments and security can be strengthened to help the continent thrive as a tech superpower.