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AfricArena should be celebrated for its efforts to grow the African tech ecosystem, writes Ventureburn editor-in-chief Ivor Price. He believes it is crucial that this work continues to support the growth of the continent’s start-ups and economies.
As we look towards the future of African tech start-ups, there is a lot to be optimistic about. The recently released AfricArena report, The State of Tech in Africa 2023, predicts a moderate growth in investments for the year, ranging between $6.5 billion and $7.3 billion, with an expected decline in equity investment but a growth in debt venture.
This is certainly a positive sign for the continent’s burgeoning tech scene, which has already seen significant growth in recent years.
It is furthermore encouraging to see the continued increase in merger and acquisition activity, especially in fintech, as corporations recognise the potential for start-ups to bring innovation and agility to their operations.
Looking to the years ahead, the report predicts even more growth, with an upper range of $9.5 billion in 2024 and total investment exceeding $10 billion for the first time in 2025. By 2026, the investment could reach a whopping $14 billion.
It is important to note that these growth rates, while significant, are still only a small fraction of the overall VC activity in tech globally. In 2022, African tech start-ups received less than 1.2% of the global VC market and only $4.65 per capita. However, this should not diminish the achievements of the African tech scene and the potential it holds.
It is widely recognised that start-ups are essential to Africa’s growth. They have the potential to create jobs, drive innovation, and provide solutions to some of the continent’s most pressing challenges. The entrepreneurial spirit in Africa is strong, and start-ups have been able to thrive despite the many obstacles they face, including limited funding, infrastructure challenges, and a lack of supportive policies.
The report from AfricArena shows that there is a lot of potential for investors to get involved in the African tech scene. As the market grows, there will be more opportunities for investors to support start-ups that are making a real impact on the continent. By doing so, they can not only earn returns but also contribute to Africa’s economic growth and development.
Fertile ground for entrepreneurs
AfricArena deserves credit for the work they have done to grow the continent’s start-up scene and economies. Their ecosystem accelerator has helped to connect start-ups with investors and provide them with the resources they need to succeed. Their efforts have been instrumental in driving the growth of the tech scene in Africa.
So, why is Africa such a fertile environment for tech entrepreneurs? Firstly, the continent has a young and rapidly growing population, which is increasingly tech-savvy. According to an earlier report from WeeTracker, Africa has the fastest-growing youth population in the world, with 60% of the continent’s population under the age of 25. This provides a large and growing market for tech start-ups.
Secondly, Africa has a growing middle class that is hungry for innovation and improved services. As more people move into the middle class, they are looking for new and better ways to access services and products, which presents an opportunity for start-ups to disrupt traditional industries.
Finally, there is a growing recognition among policymakers and business leaders of the potential of tech start-ups to drive economic growth and job creation. Governments are starting to put in place policies that support start-ups, such as tax incentives and streamlined regulatory processes.
In conclusion, the future is bright for African tech start-ups. The predictions in the AfricArena report are encouraging, and they demonstrate the potential for start-ups to make a real impact on the continent.
While there are still challenges to be overcome, including limited funding and infrastructure challenges, the entrepreneurial spirit in Africa is strong. With the right support from investors and policymakers, the tech scene in Africa can continue to grow and make a real difference in the lives of millions of people.