The African Growth Story
Africa is home to 54 countries and a population of more than 1.3 billion people. And according to the U.N.’s world population prospects of 2019, that’s expected to explode to 4.3 billion by the start of the next century.
The African population also remains young, very young. The median age in 2020 is projected to be under 20 years old.
In 2019, six of the top 15 fastest growing economies in the world were projected to be in Africa, according to Focus Economics.
Africa’s total GDP could at 2.6 trillion this year and GDP growth is projected to accelerate to 4.1 percent by 2021, according to the African Development Bank.
Lack of Critical Infrastructure
Only 43 percent of the population has access to electricity and internet penetration on the African continent is only about 40 percent as compared to the more than 60 percent of the rest of the world.
Belt and Road Initiative
Infrastructure is one reason, but another is cost. American tech companies know this. But so does China. The country’s Belt and Road Initiative demonstrates how serious China is about helping African countries develop the roads and travel infrastructure necessary to grow businesses. In 2017, there were more than 200000 Chinese citizens working under contract in Africa, working on ports, pipelines, power plants, and railways.
Big Tech to the Rescue
Twitter & Square
In November 2019, Twitter founder and Square CEO Jack Dorsey announced he would be moving to Africa. Analysts who cover Square weighed in on the move, saying Africa was untapped and underserved, that the region was the future of payments, and that Dorsey’s move was forward-thinking.
In fact, mobile payments and social media are how big tech hopes to gain traction on the continent.
U.S. tech companies know the potential in Africa, and they’re well aware of the potential pitfalls. Still, many of them are making significant investments on the continent.
Microsoft arrived in Africa in 1992, but it wasn’t until 2013 that it launched the 4Afrika Initiative, its business and marketing development engine on the continent.
Microsoft is looking to promote its cloud technology, which it says will provide a number of benefits:
- Entrepreneurs will be able to deliver new services to market faster.
- Businesses will become smarter and make more data-driven decisions.
- Governments will be more transparent, efficient and accountable, which improves the local climate for business.
- And every citizen will have access to key services.
Facebook’s biggest problem of reaching all of its users are getting them on the internet cheaply. So what are they do? They help enable startups that are building cheap internet.
To that end, Facebook, Airtel Uganda, and BSC worked to complete a 770-kilometer network in northwest Uganda to bring mobile broadband to some 3 million people. In South Africa, the social networking company worked with Vast to connect with the underserved communities to Wi-Fi. And in Nigeria, it teamed up with Main One to build out 750 kilometers of fiber. Last year, the Wall Street Journal reported that Facebook was in talks to lay an underwater cable that would go around the entire continent and drive down the cost of bandwidth. The project is known as ‘Simba’ for the Lion King character.
Meanwhile, Google has its own plan, called Equiano, named after the Nigerian-born abolitionist and writer who was a slave when he was a boy. The plan to connect Portugal to South Africa, the first phase of the project is slated for completion next year. Google also has a number of initiatives across Africa, including Google for startups, which announced last September it had started its first Africa immersion cohort. It was a twelve-week program meant to share expertise with tech startups from Africa. One of the companies they worked with is called Kwara, which provides online and mobile banking services for financial institutions and members.
Amazon has been in Africa since 2004 when the company opened its development center in Cape Town. The center focused on networking technologies and customer support software. In 2015, the company continued to expand with an office in Johannesburg. Two years later. Amazon introduced AWS Direct Connect to Africa.
Available in every country in Africa since 2016, Netflix is now programming to its audience. Queen Sono is a crime drama series that came in February 2020, and it’s its first African original series. It features South African actress Pearl Thusi. More African shows have been commissioned from South Africa, Zimbabwe, and Nigeria.
Elon Musk, who’s from South Africa, isn’t going to wait. In January 2020, Musk’s company, SpaceX, launched another rocket containing 60 Starlink satellites. Musk hopes to have 700 in orbit by mid-year and to create a mega constellation designed to provide low-cost Internet to underserved regions like rural America and Africa. Even the continent’s demographics are changing.
African Continental Free Trade Area
In late 2018, the countries in Africa signed an agreement to develop the African Continental Free Trade Area, an agreement the director of the International Trade Center called a game-changer. It is a very big deal because all 54 African countries agreed to now have a trade.
In November 2019, The African Union met in Ethiopia to discuss its goals for its member states. The A.U. also wants to promote continuing education in Africa by creating a virtual university that will allow students to access from anywhere in the world. And it’s also adopted cybersecurity as a flagship program to ensure that these technologies are used for the benefit of African individuals, institutions, and nation-states by ensuring data protection and safety online. African leaders, it seems, also know the importance of Internet connectivity and are taking steps to improve it.