Tuning into Africa’s Digital Transformation


This article was written by Kevan Yalowitz,  Managing Director – Software & Platforms Strategy, Seth Schuler, Managing Director – Software & Platforms Strategy, Caroline Olivero, Consultant – Accenture Strategy Software & Platforms, Shiven Gupta, Consultant – Software & Platforms Strategy, and Adam Norgaard, Senior Analyst – Software & Platforms Strategy @ Accenture. You can find the original article published here. 

Why the continent’s digital prospects look bright (and are getting brighter)

Africa is the last frontier of large global expansion opportunities for western companies. Despite its almost 1.4 billion people, 500 million+ internet users, and 330 million+ e-commerce consumers1, Africa is still not on the radar for many businesses or investors outside the continent.

Now, companies that missed out on the meteoric growth of India and China have one final opportunity to secure a foothold in a large, fast-growing marketplace. With countries across Africa rapidly modernizing and showing promising signs of growth, now is the time to seriously consider this market before the first-mover opportunity window closes.

Accenture was recently commissioned by Google to conduct an extensive primary and secondary research into the African tech ecosystem. We surveyed 1600 software developers and interviewed more than 25 tech start-ups, investors, and other enabling tech ecosystem players to understand the conversation around this space.

Here’s what we found and why it matters for your business.

On the brink of a tech explosion

Across Africa, the internet-based economy is on the rise. In the past decade alone, several African nations have achieved sustained growth in internet-driven GDP (iGDP)2 – in many cases doubling from 1.5% to more than 3% since 20123.

Some countries are on an especially rapid trajectory. For example, by 2050, the share of the economy powered by the internet (the iGDP) in Kenya, Morocco, Senegal, and South Africa will be approximately 6%, similar to where the US is today. While others, like Ghana, are set to reach between 4%-5% iGDP, comparable to Brazil’s present level.

Buoyed by these exciting trends, the internet economy could contribute up to:

$180B to the African economy by 20254

$712B to the African economy by 20504

With a whole range of lagging and leading indicators pointing towards accelerated growth, Africa’s fast-expanding tech ecosystem is an outstanding opportunity for tech and non-tech companies to make their move into the continent.

In fact, it’s no exaggeration to say that Africa offers a comparable level of potential to that previously seen in the APAC region.

If Africa sustains and accelerates structural reforms, the continent has the potential to emulate China’s rapid economic rise over the past 50 years5.


The Africa tech ecosystem is strong and rapidly getting stronger

Africa is also on pace to be home to the world’s next mass generation of consumers and talent. Consumer spending is expected to grow by two-thirds between 2015 and 2030 – especially for Africa’s fast-growing urban population which spends 80% more on goods and services than the continent average6. Even more exciting, Africa’s 522 million internet users today are expected to expand by 11% over the next decade to comprise 16% of the global total7.

In line with its increasingly affluent and internet-enabled consumer base, the tech talent pool is also on the rise. Across the continent, the number of software developers has increased by 4% between April 2020 and October 20218. That compares with a ~1% increase in the US over a similar period9. Put another way, there are now more software developers in Africa (720K)10 than in the entire state of California (630K)11. Africa’s potential to grow this talent pool at a grassroots level is particularly exciting, especially as western talent growth is leveling out. And it comes at a time when technology, like low-code/no-code (LCNC), is enabling developers and businesses to do more with less. For example, Africa’s massive supply of SMBs and junior developer talent can now easily spin up a website, payment capabilities, or apps without having or hiring advanced technical expertise or resources.

This isn’t a far-off-future scenario. It’s happening now. Companies across the globe are already tapping into Africa’s abundant supply of talent. As the global shift to remote work globalized the talent pool for software developers, Africa is now even better positioned to attract a meaningful share of global demand. Our research shows that 38% of African software developers now work for at least one company headquartered outside the continent12.

Local digital transformation surges

There’s a clear link between digital and economic growth, and Africa is poised to take advantage. Across the continent, 40% of the population (over 500 million people) now have internet access, catching up with India’s current 50% penetration13. With each 10% increase (which Africa is expected to achieve in the next decade), Africa can be expected to see a 2.5% increase in GDP per capita, compared with 2% globally14. Local businesses have been capitalizing on these promising trends. In the last two years, the use of digital tools and platforms in business surged.


of sub-Saharan businesses said that they’d either started to use or increased their use of digital tech during 202015.

At the government level, there are also some very encouraging and positive signs. We have recently seen the launch of a number of promising, pro-innovation initiatives that aim to further accelerate tech growth. These include initiatives such as the Tunisian Startup Act, which is intended to foster and incentivize tech entrepreneurship. The Nigerian government is also planning to set up a Centre for AI and Robotics16, and Egypt has set up an AI Portal that aims to showcase the country’s progress in digitalization and highlight AI projects and events17. That’s not all. Regional harmonization is an ongoing trend, with the Africa Continental Free Trade agreement seen as a major boost for pan-continental digital businesses.

Startups take flight

Africa is also home to a flourishing startup ecosystem. Since 2020, venture capital investment bounced back emphatically, reaching over $4.3 billion in 202118. Between 2015 and 2021, investment has grown more than 10 times19. These investments are supercharging new technologies and innovative businesses in the continent. Nigeria is a particularly exciting case in point, with leading training and skills development and a thriving ecosystem of startups.

Nigeria has become a beacon of start-up success, especially for fintech, capturing 37% of all VC funding in Africa in the first eight months of 2021 alone20.

Nigeria is now established as a vibrant hub for new tech businesses, as shown by the 2019 NYSE debut of e-commerce player Jumia, surpassing a $1 billion valuation21. This is a promising sign for local skill development as 56% of developers we surveyed work for startups22, where they gain significant practical experience.

So, what’s attracting this surge in startups and VC interest? Over the past two years, the relative risk of African investments has decreased as investors began to assess mature and emerging markets more similarly. As the assessment of risk in regions like Europe and the US have skyrocketed, the relative risk of investing in African countries has decreased. Regional resilience is another big draw23. Africa’s increasingly diversified economies are driving a faster economic recovery as well as reducing poverty23. Long-term structural trends are also playing their part. The African population is young, urban and tech-optimistic. And improving infrastructure, along with positive regulatory developments, is driving down the costs of pan-continental transactions23.

Getting going

As we’ve shown, many signposts are pointing the way to a bright digital future for Africa. Companies everywhere need to pay attention. So how should they move forward?

The good news is that global companies provide an example to fast-follow. The likes of Amazon, Google, Microsoft and Orange have invested heavily in digital infrastructure and upskilling in the last 10 years to further improve the tech ecosystem’s foundations. Companies like them have succeeded by partnering with local governments and businesses as a way to better navigate the regulatory environment and local population needs and wants.

Making sure that products and services meet local requirements is essential. Just think back to when mobile payments player M-Pesa launched in Kenya in 2007, giving Africa mobile banking before anywhere else in the world. It quickly became indispensable across several countries in the continent, by extending payment services to more than 50 million people24 in otherwise underserved communities, leapfrogging the need for traditional telecoms and banking infrastructures.

We could well see a similarly disruptive opportunity through low-code solutions to democratize digital innovation in Africa. Not only could these accelerate the continent’s digital transformation, but they could also empower a whole new generation of local developer talent to achieve innovation at scale and create powerful new solutions for the African market – and beyond. These could, in turn, help local tech companies punch above their weight on local and global stages.

It’s hard to exaggerate the scale of the opportunity. The time to plan your African success story is now. Regardless of industry, Africa must be a key component of any global expansion roadmap. Accenture is an ideal partner to help structure and execute African expansion. Our unique purview on Africa is underpinned by local experts and extensive market knowledge.

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