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Technology Africa : Ecosystem dynamics

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Technology Africa : Ecosystem dynamics

Investing in science, technology, and innovation (STI) is crucial for fostering sustainable, inclusive, and resilient growth across Africa. Yet, these sectors grapple with a shortage of both suppliers and skilled human resources.

Technological environment in Africa

The second edition of the report « African Market Trends in Technology Services : 11 country profiles » highlights a promising trend : increasing mobile and Internet penetration in many African nations. However, the continent still grapples with underdeveloped information and communication technology (ICT) infrastructure. Security concerns and infrastructure limitations pose potential hurdles to the region’s overall digital market growth.

According to the International Trade Center (ITC), Africa is expected to witness robust mobile economic growth in 2021, with several nations boasting over 100 subscriptions per 100 inhabitants. Additionally, ICT contributes significantly to service exports in the sub-Saharan region, accounting for between 4 % and 10 %. Presently, nearly a quarter of Africa’s population has Internet access, a figure projected to surge to almost 44 % by 2025.

Kenya, Nigeria, and South Africa, as major economies, are spearheading efforts in 5G connectivity and next-generation mobile development. Conversely, smaller economies still rely on older network technologies like 3G.

Technology services market overview

Sub-Saharan Africa presents lucrative technology market opportunities across key sectors like retail, financial services, and healthcare. By 2021, approximately 53 % of global mobile money accounts are expected to be in this region, indicating a higher penetration of mobile-based FinTech services compared to traditional financial institutions.

Agriculture is experiencing rapid development, offering significant opportunities for emerging IT/BPM markets. Moreover, Africa’s managed services sector is witnessing substantial growth, projected at a Compound Annual Growth Rate (CAGR) of 8.2 % between 2024 and 2029, according to the Mordor Intelligence report. The swift adoption of cloud computing, Big Data analytics, and the Internet of Things (IoT) is fueling expansion in this domain.

The competitiveness of the IT/BPM sector in Africa generally aligns with the quality of ICT infrastructure in each country. Regions boasting advanced IT infrastructure tend to host more competitive technology companies. Côte d’Ivoire, the Democratic Republic of Congo, Senegal, the United Republic of Tanzania, and Zambia demonstrate a certain level of maturity in this market, indicating promising prospects for technological innovation and growth.

Prioritizing the digital revolution and digitization of the economy

Fostering innovation and digitization in critical sectors not only generates employment but also enhances livelihoods and diminishes poverty. African governments are pursuing strategies like public-private partnerships and offering tax incentives to entice foreign investment, aiming to realize these objectives.

Strategic partnerships and innovative solutions

The African STI Forum endeavors to fortify collaborations and strategies geared towards expediting the role of science, technology, and innovation in realizing the Sustainable Development Goals by 2030. At its 6th edition, Lidia Arthur Brito, UNESCO Assistant Director-General for Natural Sciences, underscores the significance of international scientific cooperation. Notably, numerous startups and science students rely on grants from development partners and international donors to sustain their endeavors.

Government interventions are pivotal in bolstering the STI sector. For instance, South Africa has initiated a program aimed at achieving nationwide broadband coverage by 2023. Similarly, the « Digital Ethiopia 2025 » project spearheads agricultural transformation and the national digital transformation strategy. This Ethiopian government initiative underscores the value of international collaboration, with funding support from the World Bank.

Education and development of African talent

Enhancing access to education and nurturing local talent are essential for fostering sustained growth in the technology sector. Initiatives like the Alliance of Entrepreneurial Universities in Africa and the Origin platform exemplify ongoing endeavors to foster innovation and address local challenges.

Youth and women’s coding camps, alongside international investments, play a pivotal role in empowerment, catalyzing transformative change across the continent. In alignment with this vision, the European Union has allocated 279 million EUR towards research and innovation, aiming to bolster both the Sustainable Development Goals (SDGs) and Agenda 2063 for Africa.

AfCFTA : Catalyst for high-tech transfer

Antonio Pedro, Deputy Executive Secretary of the Economic Commission for Africa (ECA), underscores the imperative for the continent to invest in adopting emerging technologies like artificial intelligence and genomics. These advancements are pivotal in enhancing the quality of life for millions still grappling with extreme poverty.

The African Continental Free Trade Area (AfCFTA) serves as a pivotal catalyst for innovation and the proliferation of digital platforms across the continent. However, realizing its potential necessitates substantial investments in infrastructure and digital technologies, particularly in logistics and digital services. The ITC report suggests integrating the digital trade protocol into the AfCFTA agreement to streamline trade processes.

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