Africa is becoming an essential destination for technological investments. With rapid mobile penetration and growing investments, the continent is positioning itself as a major tech hub. Let’s explore how local and international players shape this new digital era.
Tech in Africa : Unique investment opportunity
The African continent is experiencing impressive growth in the tech sector. Financial services, healthcare, real estate, and agriculture are the most promising sectors for tech companies. For example, digital financial services are booming due to the increasing adoption of mobile payments. This transformation is largely supported by rapid mobile penetration, which is expected to reach a record 44 % by 2025. This dynamism attracts massive capital: venture capital funding increased from 2 billion USD in 2019 to 5 billion USD in 2022, despite a slight decline in 2023, where African startups still raised 3.5 billion USD in funding. Africa is thus becoming an attractive destination for tech investments, with immense growth potential.
Accelerated growth of connectivity and infrastructure
One of the reasons why tech in Africa is taking off is the rapid increase in connectivity. In 2023, one-third of Africans were connected to the internet, and this number continues to rise. By 2025, the continent is expected to have around 40 million 5G connections, which will not only boost economic growth but also the development of new digital services. 5Galone is projected to generate 11 billion USD for the economy of Sub-Saharan Africa by 2030. This level of connectivity is fostering the emergence of local startups, particularly in FinTech, e-health, and agri-tech. However, challenges remain, including insufficient ICT infrastructure, which slows digital transformation in some regions.
Emerging African tech champions
Several African countries are emerging as leaders in the tech sector. Morocco, for instance, is establishing itself as an innovation hub. In 2023, Moroccan startups raised 93 million USD through 17 deals. The country can count on a vast pool of talent, with approximately 500,000 locally trained developers. Morocco also benefits from massive support from major players like Amazon, Microsoft, and OCP. Through initiatives like UM6P, Morocco aims to become a pioneer in artificial intelligence on the continent.
South Africa, on the other hand, stands out for its advanced research infrastructure and renowned universities, such as the University of Cape Town. The country is heavily investing in cutting-edge technologies, including cybersecurity and telemedicine. In 2023, IT spending in South Africa exceeded 28 billion USD, with a 5 % growth forecast in the coming years. Mauritius, another key player, has transformed from a traditional agricultural economy into a dynamic tech hub through sustained investments in education and research.
Challenges and issues for an African Tech Valley
Despite the impressive progress, tech in Africa faces several major challenges. The lack of ICT infrastructure remains an obstacle, particularly in rural areas, where connectivity is still limited. Moreover, the brain drain continues to hinder technological development. Many African talents choose to move abroad, attracted by better economic opportunities. Governments and local companies need to strengthen their efforts to retain these talents and foster local innovation.
Africa also needs to expand its base of suppliers. Currently, many startups still depend on foreign actors for their core technologies. To address this issue, the continent must develop local industries capable of supporting this new wave of innovation. At the same time, African governments are encouraged to implement policies favorable to tech investments, as South Africa has done with its tax incentives for tech companies.
Future of tech in Africa : Global power in the making
The future of tech in Africa looks promising. According to UNCTAD, Africa has a historic opportunity to become part of global tech supply chains. The continent is becoming a key supplier of essential raw materials, such as lithium, necessary for the production of electric vehicle batteries. Furthermore, the increase in venture capital funding and the rapid adoption of digital technologies suggest a future where Africa will play a central role in the global digital economy.
Projections show that the African tech market will continue to grow, particularly in sectors such as renewable energy and smart cities. Kigali, for example, is already positioning itself as a pioneering smart city in Africa. The African Singaporeis implementing innovative initiatives, such as Twende magnetic card payments, to improve the lives of its citizens. Agro-industrial parks are considered by many experts in the agri-food sector as key drivers of agricultural industrialization.
