Roundtables Discussion Part III

Africa’s Digital Transformation

Africa has made great strides towards building its digital economy over the last two decades, underpinned by the mobile telecoms revolution that has seen the region leapfrog into the digital era. Investment into technology startups has surged in recent years. The continent is a pioneer and global leader in mobile money, and with its fast-growing economies and large, young population, has tremendous potential to further drive innovation.

Yet despite this success, African economies face significant challenges in realizing the transformative potential of the digital economy. The continent has the widest internet access and usage gap globally, with the GSMA estimating that half of the 400m people without mobile broadband coverage globally are in Africa. 

This is part of the digital divide - the gap between those with and without access to the internet - constituting a significant brake on the development of the digital economy. Broader barriers include a lack of digital infrastructure and skills development. Left unchecked, this risks undermining the competitiveness of Africa in the digital economy, including in key areas such as the rapidly evolving AI industry.

While investment into the startup ecosystem has seen healthy growth, this has predominantly been into fintech, and is concentrated in key markets such as Nigeria, Kenya, and South Africa. VC funding has also seen a sharp drop amid a global downturn in investing and retrenchment in the tech sector.