When Jack Dorsey, the founder and CEO
of Twitter and Square, told people he was moving to Africa for a few
months in 2020, it raised some eyebrows in Silicon Valley. After all, tech
companies have consistently looked to China and India when they talked
about reaching vast, untapped populations who are slowly coming online and
needing smartphones, cloud computing and mobile payment infrastructure. But it turns out in 2020, that sounds
a lot more like Africa rather than China or India. For years, it was known derogatively
as the dark continent, while colonialism and general ignorance
about Africa’s people skewed perceptions. Even today, if you listen
to American media cover Africa, you mostly hear about famine, Ebola
and violence from militant groups. And while countries like Burkina Faso, Mali
and Niger have had to deal with a recent spate
of extremist violence. Africa is a big continent and much
of it is open for business. Today, Africa has more than 600
active technology hubs, organizations with the local address, facilities and
support for tech and digital entrepreneurs. That’s up from
442 in 2018. Big tech companies from the U.S. have noticed and are beginning to focus
more and more on Africa as the next big market. Africa is home to 54 countries and
a population of more than 1.3 billion people. And according
to the U.N.’s world population prospects of 2019, that’s
expected to explode to 4.3 billion by the start
of the next century. The African population also
remains young, very young. The median age in 2020 is projected
to be under 20 years old . In 2019, s ix of the top 15
fastest growing economies in the world were projected to be in Africa,
according to Focus Economics. The list includes Ethiopia at one, Rwanda
at two, the Ivory Coast at five. Tanzania at 10. Senegal at
12, and Ghana at 15. African startups last
year reached $2.02 billion in equity funding. That’s a new milestone, according
to global investing firm Partech Africa’s 2019 report on VC
funding for African startups. Ben Lynette is a venture
capitalist in San Francisco. His company, Lynette Capital,
invests in African startups. One of Lynette’s investments is
in Flutterwave, which provides payment solutions for companies like Uber. I’m really optimistic from a general
standpoint that tech enabled startups can be the driving force that has
historically been lacking at building a lot of basic infrastructure, allowing people
to get into the middle class. Last year, the African Continental Free
Trade Area was formed with the goal of creating a single market on
the continent and dealing with the ongoing issues like
infrastructure and bureaucracy. The agreement couldn’t have come at a
better time since many believed the continent is poised to take off. According to the London based think
tank Future Agenda, Africa’s total GDP could at 2.6 trillion this year and GDP growth
is projected to accelerate to 4.1 percent by 2021, according to
the African Development Bank. With a growing middle class, that number
could easily head higher as the continent tackles its lack
of critical infrastructure. Only 43 percent of the population
has access to electricity and internet penetration on the African continent is
only about 40 percent as compared to the more than 60 percent
of the rest of the world. Infrastructure is one reason,
but another is cost. American tech companies know this. But so does China. The country’s
Belt and Road Initiative demonstrates how serious China is about helping African
countries develop the roads and travel infrastructure necessary
to grow businesses. In 2017, there were more than
200000 Chinese citizens working under contract in Africa, according to the
Johns Hopkins China Africa Research Initiative. And they worked on
ports, pipelines, power plants and railways. At the same time,
a number of U.S. technology companies are working to gain a
foothold in Africa, and some of the locals are trying
to make it easier. David Osei is the CEO of Silicon
Accra, a 60 acre technology park. He’s building in Accra, Ghana. The park will include residential and
retail units as well as recreational facilities. It will also house
the African Institute of Mathematical Sciences. The park will open in 2022,
but he’s already talking to large American tech companies about locating there
when it’s fully complete in 2023. Africans, we love Americans. because when an American to do a
partnership with you they leave knowledge behind. They leave you with experience,
they leave you with empowerment. I’m not saying we don’t get
that with the Chinese necessarily. But I’m saying that we are yet
to have that model from the Chinese. We see the Americans come in
willing to participate, willing to train. So we want Americans to come to the
party or else they will come and realize that there’s a little bit
too late because Africa is growing exponentially. At the same time, companies
need qualified workers to fill positions on the continent. But that is improving as well. Charles Laba is the head of GMEA,
a Ghana-based tech group that works with fintech, manufacturing and
oil industries. Laba has worked with tech giants like HP
and Cisco for the last 25 years. And he says when he first went
into business in 1990, finding qualified people was difficult. That’s
beginning to change, though. And so they actually quite a few other
people in Ghana who have come in, who have been educated outside
and come back to Ghana. The end result is a larger
pool of qualified people and increased dependence on technology. The challenge about coming to Africa
is really finding the right partners who is going to
collaborate with you . You know we still have our challenges
in terms of the policies and in terms of creating actually
conducive business environment, which actually respects the rule of law. Big
tech understands that, a nd it’s already begun to maneuver. In November 2019, Twitter founder and
Square CEO Jack Dorsey announced he would be moving to Africa. Analysts who cover Square weighed in
on the move, saying Africa was untapped and underserved, that the region
was the future of payments, and that Dorsey’s move
was forward thinking. Jack, I think, is looking at Africa
as a huge growth vector for the company. I think if you ask him,
his perspective will ultimately be around users and revenue. And then lastly, I think
he’s got a view that he has to figure out some way to decrease the
hiring pressure here in San Francisco. And so by creating a more remote
workforce, and he may lead by example. In fact, mobile payments and social media
are how big tech hopes to gain traction on the continent. Online retailer Jumia offers a cautionary
tale about opening a consumer facing business in Africa. After much fanfare, it became the first
African tech firm to list on the New York Stock Exchange
in April 2019 . But the company has hit a rough patch
and has been forced to close offices in Cameroon and Tanzania . After hitting a peak valuation of
near $4 billion dollars, Jumia’s market cap has fallen to
just over $440 million. U.S. tech companies know the potential
in Africa, and they’re well aware of the potential pitfalls. Still, many of them are making
significant investments on the continent. Microsoft arrived in Africa in 1992, but
it wasn’t until 2013 that it launched the 4Afrika Initiative, its
business and marketing development engine on the continent, From health care to
agritech to fintech. There’s really been quite a bit of
investment that has been landing across the continent, but also just innovation,
local innovation that is taking off as well in different markets
and different markets are different stages as we look at it. But the opportunity for scalability busy
of some of these solutions is actually quite there. Microsoft is
looking to promote its cloud technology, which it says will
provide a number of benefits. Entreprenuers will be able to deliver
new services to market faster. Businesses will become smarter and
make more data driven decisions. Governments will be more transparent,
efficient and accountable, which improves local climate for business. And every citizen will have
access to key services. But you have to have critical infrastructure,
and more than one tech giant is focused on providing it. Facebook’s biggest problem of reaching all of
its users is getting them on the internet cheaply. So
what are they do? They help enable startups that
are building cheap internet. To that end, Facebook, Airtel Uganda and
BSC worked to complete a 770 kilometer network in northwest Uganda to
bring mobile broadband to some 3 million people. In South Africa, the
social networking company worked with Vast to connect with the
underserved communities to Wi-Fi. And in Nigeria, it teamed up with Main
One to build out 750 kilometers of fiber. Last year, the Wall Street
Journal reported that Facebook was in talks to lay an underwater cable that
would go around the entire continent and drive down the cost of bandwidth. The project is known as ‘Simba’
for the Lion King character. Meanwhile, Google has its own plan,
called Equiano, named after the Nigerian-born abolitionist and writer who was a
slave when he was a boy. The plan to connect Portugal to South
Africa, the first phase of the project is slated for
completion next year. Google also has a number of
initiatives across Africa, including Google for startups, which announced last September
it had started its first Africa immersion cohort. It was a twelve week program meant
to share expertise with tech startups from Africa. One of the companies they
worked with is called Kwara, which provides online and mobile banking
services for financial institutions and members. Amazon has been in Africa since
2004, when the company opened its development center in Cape Town. The center focused on networking
technologies and customer support software. In 2015, the company continued
to expand with an office in Johannesburg. Two years later. Amazon introduced AWS Direct
Connect to Africa. Available in every country in Africa
since 2016, Netflix is now programming to its audience. Queen Sono is a crime drama series
coming in February 2020, and it’s its first African original series. It features South African
actress Pearl Thusi. More African shows have been commissioned
from South Africa, Zimbabwe and Nigeria. In late 2018, the countries
in Africa signing an agreement to develop the African Continental Free Trade
Area, an agreement the director of the International Trade Center
called a game changer. Africa is taking off and it’s a good
time to be involved in the transition of Africa. As 54 different countries to
Africa, as one continent on trade. This year we are launching the African
Continental Free Trade, which is a very big deal because all 54 African
countries agreed to now have a trade. Now, this is not just
a trade deal on paper. But it’s going to be trade, That
is going to transcend groups and services, intellectual properties. In November
2019, The African Union met in Ethiopia to discuss its
goals for its member states. The A.U. also wants to promote
continuing education in Africa by creating a virtual university that will allow
students to access from anywhere in the world. And it’s also adopted
cybersecurity as a flagship program to ensure that these technologies are used
for the benefit of African individuals, institutions and nation states
by ensuring data protection and safety online. African leaders, it seems, also
know the importance of Internet connectivity and are taking
steps to improve it. Elon Musk, who’s from South
Africa, isn’t going to wait. In January 2020, Musk’s company,
SpaceX, launched another rocket containing 60 Starlink satellites. Musk hopes to have 700 in orbit by
mid year and to create a mega constellation designed to provide low
cost Internet to underserved regions like rural America and Africa. Even of the continent’s
demographics are changing. Consulting firm McKinsey projects that half
of the populace in Africa will live in cities by 2030, which
will help increase overall Internet access. My experience has been very positive in
terms of how big tech interacts with these startups. And as I’ve said, how
they rely on a lot of ways and it will be easy to paint
the picture of Colonization 2.0. But the reality is we’re still so early
and we need as a continent, I think it needs all the focus and energy
and resources that can get at this stage. And we’re far away from it
being a competition type environment on the basis of there’s just
so much to do. Africa is becoming seamless. Slowly, we’re not there yet. They do have all these policies, as you
said, in place , where it’s going to be open borders, open economies,
open movement, and that’s going to change all the dynamic massively. This inevitably has to happen. And I actually think if we Africans don’t
step in and make the best of it, we’re not gonna get anywhere. And
so I think inevitably, organically, we have to grow.