The Rise of Africa
The next 50 years belong to Africa. A growing population, economy, and workforce will be behind a wave of massive economic growth.
China vs The West
China is all in on Africa, why aren’t we? China has taken a bullish stance on Africa and has been steadily increasing foreign direct investment (FDI) into the continent. Whereas the USA and the West have been reducing their FDI and taken a more passive approach. What is it they see, that’s missing in our view?
Africa Is Not A Monolith
Spurred by rapid urbanization, countries across Africa are seeing massive internal migration creating the catalyst for rapid industrialization. Despite the large income inequality, the consumer market is blossoming with over 350 million eager middle-class consumers. The African Continental Free Trade Area or AfCFTA recently came into effect which creates a low-tariff environment for 54 nations will enable greater trade within the continent and reduce trade with the currently favored European countries and global counterparts. This change encourages manufacturers to set up operations within the AfCFTA to access the now integrated African market, further increasing economic opportunities. This development pours over to the already thriving start-up ecosystem, as every problem solved is another created.
Venture capital funding has also been increasing across all African nations. It’s estimated that a total of $2B USD was raised in 2019 up from $400M in 2015. This is just the tip of the iceberg; many notable investments have been primarily in the FinTech space as companies race to define the future of financial services. If small businesses are the backbone of the economy and credit is the most basic building block, then getting small businesses’ access to credit is the number one priority for economic growth. That’s exactly what’s happening right now in Nigeria, as SMEs are able to grow with new access to capital to growth, secondary economic effects will permeate through the economy keeping the country on a continued growth trend.
FinTech is Laying the Foundations
Every economic activity including trade, manufacturing, or services requires a strong and healthy financial system, especially a strong credit market. The FinTech ecosystem in Africa, which is mainly comprised of hot spots in South Africa, Nigeria, Kenya, and Egypt, is the foundation. Upon this foundation companies in markets such as lending (Carbon, Renmoney), investments (Piggyvest), payments (FlutterWave, PayStack), and insurance (MyCoverGenius) are changing how consumers access these services.
Why Am I Writing about this?
As I devoured article after article on the topic with fascination, I eventually started to piece together the landscape and discovered the companies that powered the growing FinTech ecosystem leading me to Mono. Mono provides easy-to-use Open Banking API infrastructure to other FinTech’s to allow them to access customer bank data to enable developers and companies to build innovative financial solutions. I’m spending my summer with Mono working on their SDK’s and Libraries, meaning I’m responsible for enhancing and extending the developer tools to provide a great experience for Mono’s partners.
Why Africa?
I’m a strong believer in learning by doing. There’s no better way to change your worldview than by immersing yourself and crushing your own biases in the process. Having the privilege of growing up in a family that values getting out there and seeing the world I’m reasonably well-traveled but nothing compares to waking up for my 4 am meetings every day and engaging in a new culture, country, and continent. Working with Mono has completely exceeded expectations, to say the least. The team is one of the fastest moving I’ve seen, even by Silicon Valley standards, and I’m cherishing my last few weeks with Mono.
While the Cansbridge Fellowship was meant to explore the miracle of growth in the context of Asia, it’s uncanny how Africa is experiencing similar patterns at an increasing pace. Anyone who said China would be a world power or Asia was due for an economic explosion 50 years ago was probably kolo (crazy), today they’re a genius.
Questions to Upgrade Your World View
If you’re still not convinced about the Rise of Africa, then test your own biases first. My favourite doctor and statistician, Hans Rosling, left us with a wonderful set of simple yet complex questions to upgrade our world views at Gapminder.org. I’ve shared a few below (answer key at the bottom), so you can see if you’re smarter than a chimp and don’t feel bad if you’re wrong; 93% of people answer wrongly, randomly guessing gives you an edge. After all, we’re not much more than monkeys with a plan.
- The low-income countries of today had a life expectancy of 44 years back in 1970. What is it now?
A: 40 years | B: 50 years |C: 60 years
- Of all primary school teachers in low-income countries, what share are trained?
A: 30% |B: 50% | C: 70%
- In 1990, 58% of the world’s population lived in low-income countries. What is the share today?
A: Around 9% | B: Around 37% | C: Around 61%
This opportunity would not be possible without the support from many people. I’d like to thank, William Yu and Diana Liu who founded the Cansbridge Fellowship, Darren and Marry from Ivey School of Business and Western University who are leaders enriching our education, and Joespeh, Megan, Naome, and everyone else at Mitacs who worked tirelessly behind the scenes to make this summer possible. Special thanks to Abdul Hassan, who replied to my email. Lastly, special thanks to Shyam Venkatesan who’s gratuitously agreed to be my academic supervisor on this journey.
Answer Key
1:C | 2:C |3:A
