Saturday 17 July 2021 10:00 am

Africa, an overlooked continent for global investment is becoming a burgeoning Fintech leader

Lucy Hoffman is Co-Founder and COO of Carry1st

“But do people in Africa actually play video games?” That’s a question I am often asked when talking about my business, by bemused venture capitalists and startup founders alike, anywhere from London to Hong Kong, New York to Silicon Valley. That one question exposes a persistent attitude towards Africa; that the continent is decades behind the rest of the world technologically while the rest of the world is diving into NFTs and the almighty “metaverse”.

Now I’m not saying there is not more work to do across Africa. If the region is to fully catch up to other, more digitised economies, significant investment and policy development is needed. But while the rest of the world has been looking in other directions (towards exploding online populations in countries like India, for example) Africa has indeed been catching up, in a way that may surprise the casual “Western” observer.

The stats speak for themselves: Africa has a population of 1.3 billion, within which the average age is just 19 versus 44 in Western Europe. Given that age tends to be a strong barometer of digital savviness, tech adoption is skyrocketing as these digital natives come of age. This is borne out in app downloads, for example, where Africa is the fastest-growing market globally and by the fact that Africa’s mobile market grew 4.6 per cent in between Q3 and Q4 2020, according to the International Data Corporation (IDC).

So, to answer the question, yes Africans play games – lots of them. Comparing Q1 and Q2 2020, gaming in Kenya, Nigeria, and South Africa combined increased by a staggering 50 per cent. As a result of these dynamics, global content owners are being forced to turn their attention to the continent. And importantly, as more young African men and women engage in these digital ecosystems, many are being inspired to become the next generation of designers, programmers, and digital growth leaders.

But Africa’s digital progress isn’t confined to the gaming sector. It also has a burgeoning fintech sector. Generally speaking, card payments has had little penetration in African countries, but the continent has adopted other forms of digital payments. For that reason, 55.2 per cent of all live mobile money services can be found in Africa, according to Quartz. 

You need only look at some of the big players like Safaricom, Flutterwave, and Paystack to see how the ecosystem is maturing. Globally ambitious financial services firms in London should take note, and have African partnerships on their medium-term roadmaps.

These recent improvements in Africa pave the way for a promising future for the continent. With more tech adoption comes investment, and with more investment comes career opportunities. The next generation of African developers and entrepreneurs are poised to create world-conquering products in a way their parents and grandparents simply couldn’t.

The consequences of the pandemic only feed into this. National borders are now less relevant than ever in the working world, meaning that African talent can fill more international roles in the tech sector. Hubs like Cape Town and Lagos are now accommodating more employees at firms like Amazon, Google, and Stripe. The traditional “brain drain” of previous generations (whereby top candidates left Africa in search of better job opportunities) is shrinking.

The combination of all these factors makes it a very interesting time to be in the African tech scene. The cliché view, of a continent that’s “digitally lagging” has become outdated. With every step we take towards debunking this stereotype, the less African companies and entrepreneurs will face misinformation and the more international organisations will realise the potential of the region. For digital companies in the UK with global ambitions, it should be a question of when and how not if they entertain Africa expansion. The ones that do so early will reap the rewards. And with a concerted effort, the potential of the continent will finally be realised.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.