Eight Reasons to Invest in African Tech Innovation
Astute international investors are finding promise in the African digital renaissance, where a decade of rapid economic growth is cause for consumer spending to exceed an estimated $1 trillion annually by 2020, according to Forbes.
In Africa, the middle class is growing, populations are urbanizing, IT infrastructure is improving and cell phones and mobile payments are more widely used than in most of the world. All of this has combined into a recent technology startup boom that has international investors salivating for more.
The company I founded, 3G Direct Pay, is an online payment processor servicing the African market. And we have seen the result of the mobile payment technology boom firsthand. In a region where many consumers do not have debit or credit cards, mobile payment technology has undergone drastic development in recent years, and it is continuing to advance. With providers like 3G Direct Pay, along with M-Pesa, Airtel, MTN and Tigo, among others, it is clear that the mobile payment technology sector in Africa is growing, developing and becoming an integral part of society.
Not only mobile payment technology is on the rise. Technological developments in other sectors are also becoming stronger. There are eight main reasons why African technological innovation is a wise investment:
1. POPULATION GROWTH
While other countries, most notably Japan and Eastern Europe, are seeing a decline in population growth, Africa is home to 1.2 billion people and is growing at more than 2 percent a year.
Six of the 12 fastest-growing countries in the entire world are in sub-Saharan Africa.
2. ECONOMIES OF SCALE
Kenya, for example, has the third-fastest growing economy in the world, behind only China and the Philippines. Kenya accounts for 40 percent of the gross domestic product of the East African Communities (EAC), and its currency is the best performing one in the region. Its nascent economy is bolstered by a highly educated, English-speaking and youthful workforce. Some 60 percent of Kenyans are 25 years old or younger.
Another great example is Nigeria, Africa’s largest economy – even ahead of South Africa – boasting telecom companies and advanced banking options. The Economist reports that its economy has been growing at an average rate of around 7 percent a year over the past decade.
