Africa is home to a lot of opportunities for business owners. With its growing population, the increase in bilateral trade activities, and the resulting growth potentials that have attracted investors and multinationals from other continents, to establish businesses in Africa, tech business on the continent is growing strong.
Due to several challenges such as difficulty in raising funds, erratic power supply, high cost of running power generators, and volatile government policies amongst others, many African entrepreneurs find it expensive to begin a company and even run an existing company.
However, over the past years, there have been improvements in some of the social amenities which have made it easier to start businesses. All over Africa, start-up companies are attracting funding from varying sources such as venture capital, private equity, impact funds, and angel investors.
Hence as an entrepreneur, there are certain things you need to look out for in countries before starting a business, that is, constant power supply and having access to other major indicators that would make your business run profitably. Although there are few countries in the continent that are globally competitive, many are working to reduce the regulatory barriers for businessmen and women.
South Africa is one of the five emerging economies in the world besides China, Russia, India, and Brazil owing to the countries well developed financial markets, and a rapidly emerging market economy that has enhanced the growth of entrepreneurial and investment activities.
The country’s collective ecosystem efforts have produced tremendous results across the country, although most of the activity is still focused on the two main economic hubs of Johannesburg and Cape Town. These efforts have resulted in:
- A vibrant and growing startup ecosystem led by the private sector
- Growth in the number and size of funds (both local and international) available for early-stage investment, particularly at the VC stage due to changes in policy
- Numerous startup support and acceleration programs
- More seed funding options available from the government
- More startups in a variety of tech sub-sectors such as Fintech, Traveltech and Edtech using innovative technologies e.g. the Internet of Things (IoT), artificial intelligence (AI), machine learning and blockchain technologies.
Kenya is home to one of the leading hubs for entrepreneurship activities on the continent due to a growing number of engaging international investors, a huge population with access to technology, and a growing number of startup support organizations active in the ecosystem. The country was one of the world’s best performers in the areas of Getting Credit and Starting a Business, according to the World Bank. Kenya has long been considered one of the best places to do business in Africa because:
- It has a growing middle class and is one of the most advanced economies in Africa
- It is one of the earliest adopters of undersea cable technology which brought down the price of internet connectivity,
- It is the epicenter of mobile money (mo-mo) technology with the launch of mobile payments startup m-Pesa.
Rwanda’s 6 percent growth rate annually makes it one of Africa’s fastest-growing economies since the turn of the century. This, according to the World Bank, is due to the many reforms it carried out to improve ease of doing business. It takes remarkably, less than 24 hours to register a business in Rwanda, and the relative ease of managing and growing a business is helped by the favorable ambiance in the country for startups and startup-to-startup collaboration.
Now with a private sector-driven economy, Rwanda has turned into an ideal space for entrepreneurs seeking to establish a presence on the continent, as barriers to entry are almost non-existent. Rwanda’s untapped potential further offers a plethora of opportunities for entrepreneurs
Africa’s biggest economy might not have so much short-term investment appeal due to low economic growth and high political risks.
However, the Nigerian startup space has some advantages which have endeared it to entrepreneurs. The country boasts a very active and innovative community with innovation hubs, incubators, and co-working spaces strategically located across the country. To put in a clearer perspective, out of the 618 tech hubs accounted for in the 2019 hub mapping by Briter Bridges in collaboration with the GSMA Ecosystem Accelerator program, Nigeria has 85, the highest in the continent. Also, with a population of about 200 million, the country has in its arsenal a growing market for produced goods and services.
Africa, as a continent of Growth economies, and a thriving and expanding youthful population, holds huge prospects for the growth and proliferation of technology, especially in catering to a myriad of challenges that various African countries are grappling with. With the vast potential that the continent possesses, many investors are wont to find value and scalable initiatives in different parts of Africa’s vibrant geographical markets.