Africa’s Technology Revolution

The Whitaker Group believes that Africa’s technology revolution will be led, ultimately, by its youth: entrepreneurial, tech-savvy and with access to tech funding and internet-enabled access to worldwide information and global markets. Technology is accelerating growth across the continent by changing the way that companies do business; by creating wider-spread opportunities across diverse demographics and by creating a new generation of entrepreneurs with the ideas, capability and capital to address some of the region’s most pressing problems.

Key factors:
  • Aggressive investment in the sector encompassing:
    • Investment in mobile and fixed infrastructure
    • Investment in technology training and tech incubation
  • Growing trend of technology enablement in businesses to stimulate growth
  • Predicted accelerated growth trends in smartphone take-up
  • Technology experts say that the growth trends mirror those in other emerging markets, in Russia, in Eastern Europe, In Latin America and in China, thus indicating enormous potential

In 2011, the Economist recognised in its ‘Africa Rising’ article that ‘Africa’s enthusiasm for technology is boosting growth.’ Already in 2011, Africa had more than 600m mobile-phone users—more than America or Europe – and more than a tenth of Africa’s land mass was covered by mobile-internet services—a higher proportion than in India.

Just as Africa led the way in mobile telecommunications, so too, is it poised to lead the way in technology, and, notably, mobile-based technology. Widespread mobile access has been translated to wider mobile internet access and, with smartphones, the potential for technology and technology enabled business increases substantially.

The ICU’s latest ICT statistics indicate that 20% of Africans (172 million) already have mobile broadband, and this number is predicted to reach 240 million by 2015. By 2017, it is believed that smartphones will make up the majority of mobile phone sales in Africa.

Capitalizing on the youth bulge and entrepreneurial spirit, investors and technology firms alike have noticed the massive potential and have started aggressively to invest in this sector. IBM, Microsoft, Intel and Google are all making significant investments in training and tech start-ups. Tech investors like Rocket Internet and Tiger Global Management have joined traditional private equity firms such as Carlyle Group in investing in Africa. Rocket alone will commit roughly $200 million to its African Internet Holding portfolio company.

Mobile Operators have also started to invest in the Africa tech ecosystem: Millicom and MTN have invested in Rocket Internet; Safaricom is now running accelerator-like programs and competitions. 

Currently, ‘tech enablement’’ is gaining traction across all industries, with technology being used to solve some of the most fundamental problems in the continent. Nowhere is this more evident than in the banking sector, which has been revolutionised by mobile money; in fact, mobile money, gained traction in Africa long before it did in the US.

Nevertheless, the Accelerator approach that is currently being taken increases risk, and, thus potential failure. It may take a few years before the continent fully realizes the dividends of this investment.