3 African countries that show investment promise as global tech hubs

Over the past decade, countries such as South Africa, Kenya, and Seychelles have emerged as Africa’s tech hubs. Kenya is increasingly touted as the Silicon Savannah, owing its position to technologies like M-Pesa and Ushahidi being exported worldwide.

Chances are that Kenya and South Africa will hold onto their leads in the African tech industry in the near future. However, with the growing focus on mainstreaming information and communications technology, Africa is creating new tech hubs that are worthy of consideration by investors.

Rwanda

Rwanda recently ranked fourth in networked readiness in Africa, behind only Mauritius, South Africa, and Morocco — all considered more developed economies. This ranking is of little surprise; Rwanda has an ambitious blueprint for developing ICT. The plan identifies growth in three strategic sectors: financial services, education, and healthcare.

Rwanda hosted both the Connect Africa Summit in 2007 and the Transform Africa 2013 Summit — both represent a convergence of leading technology players and policy makers on the continent. This prestige is emblematic of the country’s position in Africa’s ICT landscape.

There has also been an emergence of tech hubs in the country, including KLab and The iHills, which are catalysing innovation and enterprise. In the next five years, the recently adopted Smart Rwanda Master Plan should be pivotal in consolidating gains made over the past decade.

Mauritius

Mauritius launched Africa’s first cellular system in 1989 and the continent’s first commercial 3G mobile service in 2004. The country holds the position as Africa’s trailblazer in realising key ICT milestones, which bodes well in an industry defined by accelerating dynamism and innovation.

The creation of Business Parks of Mauritius in 2001, during the dot-com boom, gave Mauritius a considerable head start in Africa’s tech race. Between 2004 and 2010, the country’s ICT sector’s annual growth averaged 15.4 percent, compared to its modest average economic growth of 4.3 percent, making it a major engine of expansion.

Mauritius’ National ICT Strategic Plan also ended 2014 with bold targets for deploying ICT solutions in sectors like health and education.

Ghana

Ghana may appear subtler than Kenya and Mauritius, but it’s an ICT economy worth watching. Over the past decade, the country has carved out its niche in business process outsourcing, a largely ICT-enabled segment.

In 2005 and 2007, Ghana and South Africa were ranked as the only two economies in Sub-Saharan Africa competitive in BPO. Then, in 2009, Ghana claimed the top spot as SSA’s most preferred destination for BPO, with many referring to the country as “West Africa’s Bangalore.”

Between 2000 and 2012, revenue generated through the global outsourced service industry doubled to just under US$100-billion, and Ghana is poised to reap the benefits if it continues to assert its position on the global BPO map.

Where to Begin

Thanks to the integration of ICT solutions in day-to-day commerce, infrastructure has grown by robust margins in Rwanda, Mauritius, and Ghana. Strong economic emergence and rising income levels have also changed the status of ICT solutions — once luxuries, they’re now basic needs for consumers.

Internet penetration shows there’s still great potential for growth in these developing regions, and all three countries are benefiting from incubation hubs that are increasing tech entrepreneurship, especially among African youth.

There are plenty of reasons to invest in these growing markets, but what can you do now? Here are three strategies to help you begin:

Connect with tech entrepreneurs: Avenues such as the Global Entrepreneurship Summit, which was hosted this July in Kenya, present investors with an opportunity to connect with Africa’s finest ICT innovators. Leading technologies, such as Kenya’s M-KOPA Solar and Nigeria’s Hello Tractor, were key ventures showcased at this year’s summit.

Target socioeconomic challenges: African economies are still grappling with a host of socioeconomic obstacles that present a profound opportunity for investment. Start by investigating the most pressing of these challenges and how they might match with a product offering. Deplorable sanitation in Kenya’s informal settlements, for instance, allowed Sanergy to create a model through which locals could purchase and manage portable toilets.

Engage in understanding: Africa’s story is often misrepresented. While there’s been a general rise in income levels, it’s important that potential investors develop a sound understanding of the dynamics of the culture and its economy. To be successful, entrepreneurs need a fair representation of the region, an investment in market assessment, and realistic targets.

Kenya has quickly become a prominent nation for tech research and development, and Rwanda, Mauritius, and Ghana aren’t far behind. With enough attention and focus in the coming years, they have the potential to provide a worthwhile reward for investors.

Where do you see yourself investing in the next few years?