Africa’s opportunity for Digital Transformation.
Large and Growing Market: Africa has a young and rapidly growing population with increasing internet penetration rates. Investing in digital transformation can help capture this market opportunity and unlock significant growth potential.
Enabling Infrastructure: Many African countries have invested in telecommunications infrastructure, providing a foundation for digital transformation. This infrastructure can be leveraged to support e-commerce, mobile payments, and other digital services.
Government Support: Many African governments prioritise digital transformation as a key driver of economic growth and have launched initiatives to promote the digital economy. These initiatives create opportunities for private companies to partner with governments and implement digital projects.
Opportunity for Innovation: Africa has unique challenges and opportunities, creating an environment for innovation in digital transformation. Investors can leverage this opportunity to develop new products and services tailored to the African market.
Social Impact: Investing in digital transformation in Africa can have a significant social impact, as it can improve access to services, create jobs, and drive economic growth. Digital transformation can help bridge the digital divide, reduce inequality, and improve the lives of millions of people.
Africa is home to over 1.3 billion people, making it the second most populous continent after Asia. By 2050, Africa will be home to a third of the world’s young people and the continent is urbanizing faster than other regions. This represents a significant market for digital solutions, from e-commerce and digital payments to healthcare and education.
Source from World Economic Forum
Over 600 million mobile connections by Africans, with 65 percent via smart phones, are expected by 2025.
The internet access is growing at one of the fastest paces in the world due to strong investment incentives with Africa’s youthful population and rapid urbanization are both strong drivers of demand for digitalization. According to Turner & Townsend, the growth in Africa’s data center market is expected to grow to US 3 Billion by 2025, growing at a compound annual growth rate of over 12 percent. Google and IFC reports that internet economy has the potential to reach USD 180 Billion by 2025, accounting for 5.2% of the continent’s GDP.
According to Partech Ventures, the African Tech ecosystem has continued to grow in 2022, despite a global economic crisis and a dramatic slowdown in the venture capital landscape. Funding for the African sector grew +8% to US$6.5B, through 764 rounds, with debt funding doubling in the year (+102% to US$1.5B in 71 rounds) to compensate for a slight decline in equity rounds (-6% to US$4.9B in 693 rounds). Clearly, the deep forces driving growth of the African Tech ecosystem have prevailed against the headwinds.
Investment in African tech startups is growing rapidly, Total funding (equity and debt) increased by 8% YoY to US$6.5B, and 764 deals were completed this year, representing a 6% increase YoY, according to a report by Partech Ventures.
