TheCable

BY WALE OYEPEJU

Eleven years after reaching 7 billion people, the United Nations estimates that the global population will reach 8 billion today, a remarkable accomplishment acknowledged as the Day of 8 Billion every November 15. However, current projections show that new population growth will be more concentrated in countries with higher fertility rates and youthful age structures, especially in sub-Saharan Africa. For Nigeria, such a population boost also brings into focus the need to address many of the country’s challenges: health infrastructure, climate change, drought, access to food, employment, migration, and trade relations.

In a hyper-connected world, many African nations face financial instability, slow economic growth, hunger, poverty, and disease. Countries are facing a challenge with achieving SDG targets, while leaders seek new opportunities to transform a population growth that several economists and experts have called the “superabundance,” which can be good for the economy and innovation. From education to healthcare, agriculture, and telecommunications, the next phase of socio-economic growth will require innovative social solutions and inclusive strategies built on digital technology, especially as the world continues to recover from a pandemic and rising inflation.

For rising economies, the digital economy serves as a critical lever of economic and social development, enabling governments to create opportunities that improve public services and accelerate the achievement of the SDGs. At this point, it is necessary to explain that the tech innovations to transform a post-COVID world are being developed. Still, it is now imperative to focus on actual innovation by Africans that can address the continent’s unique challenges. Therefore, we have to train and empower new innovators with the necessary digital competencies and expand access to digital tools and technologies that will improve lives, transform the delivery of education and healthcare, improve our ability to produce food for a growing population, and help protect people against worsening climate crises.  

Expanding productivity through social innovation

As an approach to productivity, social innovation focuses on new solutions to social problems which are more effective, efficient, sustainable, or fairer than existing solutions. It generates value primarily for society instead of single individuals or organisations. It is perceived as being distinctive in its outcomes and relationships, in the new forms of cooperation and collaboration it brings. Social technology is closely connected to this, which enables those most impacted by problems to collaborate with those motivated to provide effective and efficient technology solutions to make a difference.

In many European economies, social innovation has been increasingly perceived as the answer to the rising societal challenges, such as growing social disparities and exclusion, youth issues, unemployment, poverty, and evolving demographics. Yet, while policymakers, leading academics, and social activists agree that social innovation will unlock a better future for the world, implementation is still complex. As a result, many countries struggle to understand what social innovation offers and, more importantly, how it can be done in practice. 

In the 21st century, technology is a critical driver of economic and social prosperity. It is vital in unlocking opportunity, economic growth, and development across all industries, from agriculture to education. Complex social issues like poverty and environmental degradation are by no means new, but the global context in which they arise indeed is. Maximising the benefits of technology requires a bold national and regional strategy to build a critical mass of tech startups. Where technology startups are nurtured across sectors, governments will increase productivity, create jobs, and find new solutions to meet their countries’ challenges.  

Africa is the next growth market

Here are some possible growth indicators in the tech sector: Africa’s mobile service subscription figures are skyrocketing. Six hundred fifteen million users in sub-Saharan Africa are expected to subscribe to mobile services by 2025. For example, in Nigeria, the total number of active mobile subscribers reached 210 million in August 2022 from 208.6 million in July, with a teledensity of 109.99%. Internet subscribers also exceeded 152.2 million, with broadband penetration at 44.65%. Furthermore, 18 million new subscribers will adopt mobile services in Nigeria by 2025; 12 million in Ethiopia; eight million in the Democratic Republic of Congo; six million in Tanzania; five million in Kenya; four million in Uganda; and 45 million across other countries in the region.

In 2016, the African tech ecosystem barely raised $400 million in venture capital. However, by Q1 2022, $1.5b was raised in 102 deals, and startups continued to perform strongly from the fundraising perspective in Q3. So far, in 2022, 385 startups have raised just shy of US$2.7 billion, which is 28.5% more than was raised in 2021, meaning 2022 is already the most successful yet. The latest performance is not surprising, as the ecosystem raked in 1 billion US dollars in the first seven weeks of the year. That take was more than 25% of the entire 2021 amount – and came with just over 130 deals. These present an immense opportunity and are a testament to Africa’s creative capacities. 

Africa is already pioneering many innovations that are changing the world, primarily through using financial technology to drive inclusion. But access to technology must be coupled with socio-economic welfare, including driving innovations in healthcare, education, and commerce and addressing the pain points of vulnerable communities.

It is time for the future

A report from the IFC and Google in 2021 estimated that there are currently about 700,000 professional developers across Africa, with just over 50% concentrated in Egypt, Kenya, Morocco, Nigeria, and South Africa. Industry insiders in Nigeria believe that the report’s estimate of 80,000 developers in Nigeria was too generous, as some stipulated that the country probably does not have up to 10,000 software developers in Nigeria. Unfortunately, the country is also affected by the ‘Japa’ phenomenon, with hordes of skilled tech talents leaving yearly for better opportunities. Between 2014 and 2021, 474 Nigerian tech talent moved to the UK via the UK government’s Tech Talent Visa, a visa that allows tech talent to work in the country’s digital technology sector. 

Therefore, governments and stakeholders – in the private and public sectors – must prioritize R&D investments by focusing on producing and commercializing scientific knowledge. At the 8th Ordinary Session of the Assembly of the African Union in 2006, member countries pledged to contribute 1% of their gross domestic product (GDP) to Research & Development. Currently, just four African countries have achieved this figure in their annual budgets. While the continent has to reconcile with its rising population, every possible leverage must be explored and guided by education and information-sharing.

In addition, African countries need to bridge the finance gap in R&D by allowing higher institutions to fundraise through micro-contributions, levies, public-private partnerships, and market-based financial transactions. Through innovative financing mechanisms, endowments at universities will allow higher education institutions to achieve better research outcomes. Therefore, as African startups receive money from investors to build high-growth startups, new and rising talents are ready and equipped to build, manage and innovate.

Thirdly, private sector stakeholders must adopt a business strategy that aligns their corporate objectives with the national imperatives to spur innovation and growth. It begins with specific programs to provide training and access to finance for young innovators whose creativity is intended to address social issues while also building for the global market. The most lucrative industries of the future are becoming increasingly digital, and future generations will need relevant skills to access them. Low-skilled and labour-intensive work sectors are contributing less to the GDPs of many technology-driven countries, so the success of Africa’s economies could soon rely on the skills relevance of their workforces. Given Africa’s population bulge and the surge of young Africans entering the job market, job creation is an issue that requires a sustainable solution.

To maximize the benefits of Africa’s tech revolution, policymakers and leaders should accelerate the adoption of forward-thinking policies. In addition, there have to be fiscal and non-fiscal incentives that enable an environment for innovators, entrepreneurs, and investors to operate, grow and thrive. Building a vibrant tech ecosystem in Africa will help the continent achieve digital sovereignty, set the rules that will shape our global future, and drive the Fourth Industrial Revolution rather than following it. 

Wale Oyepeju is the co-founder and chief technology officer of Vendease, an online marketplace that connects restaurants and other food businesses directly with manufacturers and farms.