The Story of Africa’s Success in the Tech Sector
Tech Startups in Africa have been getting a lot of attention in recent years. It seems as though every day you read the latest news in global tech, there seems to be mention of a new tech startup based in Africa securing funding.
Since the early 2010s, African tech companies have steadily secured more funding to reach financial stability. In 2015, 55 tech startups in Africa secured funding. In 2020, that number rose to about 359 (source: “Overcoming Africa’s Tech Startup Obstacles,” Boston Consulting Group, 2021).
Why is this happening now? What global economic/social forces bring such unprecedented success to African tech? What does this mean for the future of the African and global economies?
We decided to find out.
Changing Demographics
Africa has seen steady growth in population in recent decades. This means more young people live in Africa today than at any other time in history. Add to the mix an increase in access to the internet and other new technologies, and we can see a new trend of more youth involvement in technological fields.
There are also steadily improving educational conditions throughout the continent. Enrollment in primary schools is at about 80% of young children, a phenomenal improvement compared to recent decades.
The number of tech developers across the continent has substantially increased as well. In 2019, a recorded 700,000 registered tech developers were working within continental Africa, mostly in Kenya and South Africa. In 2021, that number grew to 716,000, a 2.3% increase.
Foreign Interest & Changing Economic Conditions
The Covid-19 pandemic and subsequent lockdown forever changed how business is done, primarily through remote work. Many large and small companies now realize that software development for websites, mobile apps, and other electronic services can be done remotely from anywhere in the world with an internet connection.
This benefits the African tech workforce greatly. About 40% of African software developers work for at least one company based outside of the African continent, and 50% work for African-based startups (Quartz Africa, Global demand for African developers in on the rise, 2022). Africa provides companies worldwide with a source of affordable, expansive, and skilled labor in the tech sector.
Aside from foreign interest, African governments have spent the last decade steadily investing more money into technology projects. Economic analysts credit the start of this trend to four fundamental policy changes: mobile money, a globally recognized crowdsourcing app, Africa’s tech incubator model, and government commitment to ICT policy.
These policy changes acted almost as a domino effect. In 2007, a Kenyan telecom company, Safaricom, launched “M-Pesa mobile money.” Shortly after that, developers released the Ushahidi crowdsourcing app, which helps to digitally map out major demographic changes/events anywhere on the globe. Then in 2010, the Kenyan government completed The East African Marine System (TEAMS). This underwater fiber optic cable increased broadband connection in East Africa, resulting in Kenya’s Information Communication Technology (ICT) power.
In 2008, Ushahidi cofounder, Erik Hersman, unveiled Nairobi’s iHub to create a central digital entity for developers, investors, and technology companies. IHub has created 152 companies with about 20,000 developers in the past twelve years. The conception of iHub gave way to a significant rise in software development across the African continent in sectors like finance, agriculture, energy, fashion, entertainment, transportation, and healthcare.
What will the future bring?
According to a report by Google, African developers: creating opportunities and building for the future (2022), global demand for tech experts is only increasing, and the remote work model formed during the pandemic accelerates this trend. This demand helps African developers by creating more opportunities to code remotely.
The same report by Google indicates that more young developers in Africa are seizing opportunities by working for local startups, and their salaries are steadily increasing. Last year, senior developer salaries rose 11% to $55,500 per year on average, while mid-level employees benefited from a 9% increase in annual income to an average of $25,500.
Most demand for programmers in Africa lies in mobile app development and website structuring.
Obstacles
While enrollment in primary schools continues to increase, secondary and tertiary education enrollment still lags behind. Only about 30 to 50% of secondary-school-aged children attend classes regularly. This disparity is mainly regional, with communities in Central and Eastern Africa lagging while communities in Northern and Southern Africa enjoy steadily increasing enrollment rates.
The continued success of Africa’s tech sector cannot sustain itself with faltering education rates, and it remains an issue for local officials to confront.
While education remains a prominent issue for sub-Saharan African countries, long-term sustainability is the primary concern for the survival of these new startup companies. According to a report by the Brookings research group, the majority of African tech startups do not progress past Series B funding rounds. Only 3% of African tech startups reached Series C venture capital funding in 2019.
The lack of funding commitment results from a plethora of complex economic conditions specific to the continent. These include low consumer spending habits, complicated business regulations, lack of data communications infrastructure, and scarce availability of capital. In addition to these barriers, the formation of state monopolies suffocates startup growth, deepening these disparities.
Despite the setbacks, economists predict that Africa’s digital economy is poised to break $180 billion by 2025 (5.2% of Africa’s total GDP). By 2050, that number could reach $712 billion.
For more information:
https://qz.com/africa/2136331/google-report-shows-a-growing-demand-for-african-programmers/).
https://blog.charisol.io/the-rise-of-software-developers-in-africa-e1943c98fa3
What is Prajix?
The best way for you to master the world of coding is by placing that world at your fingertips. Our mission is to empower developers worldwide to revolutionize the future we wish to have through online collaboration.
We allow developers to create or join project ideas on our platform, where they can find like-minded individuals to team up and collaborate within our collaboration rooms.
We are striving to build the most valuable network of programmers, coders, and developers from around the world into one place, creating a technological powerhouse that will help individuals and communities all over the globe.
If this sounds interesting to you or you want to learn more, visit our website at: https://www.prajix.com/
