As the African ecosystem continues to grow innovation and access to venture capital, 84.6% of 4500 Africans—from Nigeria, Ghana and Kenya—in a survey by Talking Drum Communications and Survey54 said that these developments have given them a positive perception of the continent.
The aforementioned organisations conducted the Africa Innovation Impact Report to capture the impact of Africa's emerging innovation narrative. "Based on the data we have gathered, the innovation coming out of Africa is not only changing the way people live and work, but it is also changing the way people think," Olugbeminiyi Idowu, Founder and Managing Director of Talking Drum Communications, said.
Not only has investment into African startups grown 18x between 2015 and 2021, but funding for African startups also grew 2x faster than global rates between 2020 and 2021. Within H1 2022, African tech startups jointly raised over $2.5 billion.
Also, the survey revealed that education (21.1%) is considered to be the sector most impacted by technology innovation in Africa over the last two years. More than financial services (18.3%) and entertainment (15.1%). This is despite the fact that African fintech startups usually attract more funding from both local and foreign investors—the sector also houses seven of the continent’s eight unicorns, including $3 billion Flutterwave. Per BD Tracker, fintech startups in Africa took the largest chunk of the funding, raising over $845 million in H1 2022.
"At first glance, it may seem like an odd choice, given the spotlight and funding fintech has received, but when you consider the impact of education technology (EdTech) platforms and their reach, this perception begins to make more sense," the report stated.
Apart from the aforementioned impacts, technology has also formed the core of some traditional companies (although only on the surface level), where many incorporate technologies for basic work activities like communication, trade and documentation.
"Beyond incorporating technology solutions in their work, they also attest to these solutions improving their work tremendously. When asked how the tech solutions had impacted their efficiency, most of their responses fell between 8 and 10 (1 being "very negative" and 10 being "very positive")," the report revealed.
Africans are more excited about funding stories
Although experts are advocating for African tech journalism to move beyond fundraising stories, 29.8% of the Africans that were surveyed said there are more excited to read funding stories, and 28% opted for expansion stories. 27% of the respondents said that they are more excited about partnership stories.
Based on the data, respondents from Ghana (33%) prefer funding stories more than those from Kenya (31%) and Nigeria (25%). Most of the Kenyan respondents said they prefer partnership and expansion stories to fundraise and acquisition new stories. Meanwhile, more Nigerian respondents voted for acquisition stories.
"What we see with the nature of tech's most prominent stories reflects the industry's evolution and what people pay the most attention to (whether they admit it or not, data doesn’t lie)," David Adeleke, a media analyst wrote.
What are Africa's future digital needs?
It is estimated that by 2100 (less than 80 years from now), one in three people in the world will be African. This future presents a significant opportunity for the African continent and its innovators. Since 2010, consumer spending across the continent has grown at a compound rate of 39% annually; this is projected to reach $2.1 trillion in 2025 and $2.5 trillion in 2030 (comprising about 1.7 billion consumers).
Africa’s GDP is expected to increase by 10x, from around $2,6 trillion today to $29 trillion in 2050. There has also been a trend of rapid urbanisation across Africa; over 60 cities across Africa currently house a million people—which is projected to increase to 85 cities by 2025.
Respondents in the report's survey said that education and agriculture are the sectors that need more innovation.
Related Article: These edtech startups are revolutionising learning in Africa
An estimated 346 million people in Africa are affected by the food crisis, according to recent reports by the Food and Agriculture Organization (FAO) and the African Union (AU). Per education, the United Nations said that Africa grapples with huge disparities in education. These numbers if compared to the statistics underscores the need for more innovation in these sectors.
The report also suggested that human capital development is another aspect of the economy that would require significant attention for the continent to meet its digital demand by 2050. The IFC estimates that over 200 million jobs in Africa will require digital skills (basic, intermediate and advanced) by 2030.
Investment in human capital development significantly reduces the cost of digital labour on the continent, giving businesses room to grow more. — Africa Innovation Impact Report