Report: Africa’s tech ecosystem to record $712 billion growth by 2050

Endeavor Nigeria, a global organisation of high-impact entrepreneurs, says Africa’s technology sector will record a significant growth estimated at $712 billion by 2050.

The organisation said this in its latest report, titled ‘The inflection point: Africa’s digital economy is poised to take off’.

Endeavor Nigeria said the projected “exponential growth” is accelerated by strong market fundamentals and the impact of the COVID-19 pandemic.

“Africa’s digital economy is large and growing, with an estimated market size of $115 billion expected to reach $712 billion by 2050. By 2050, Africa will be home to a third of the world’s young people and the continent is urbanising faster than other regions,” the report reads.

“Additionally, one in six of the world’s internet users will be in Africa in 2025. The COVID-19 pandemic is also driving digitisation on the continent, encouraging more Africans to engage in digital activity. As a result of these dynamics, more investors are paying attention to the potential of African technology. 

“Between January 2020 and December 2021, funding for African digital startups grew two times faster than global rates. Proven exit paths are also emerging for early investors with the increase in mega-rounds, liquidity events, and unicorns.

“The combination of these events has primed Africa’s technology landscape for success. However, there remains a ‘white space’ for investors to consider. Due to the quantum of deals in the $1million to $5 million range in the last year (600), relative to the $5million to $50 million range (~150), it is unlikely there will be sufficient supply in the market as companies from the $1 million to $5 million range graduate to larger ticket sizes. 

“With the right financial support, the current excess of innovation can be more effectively leveraged to drive even more development and prosperity on the continent.”

The report, which further offered a roadmap to successfully navigate the opportunities that are emerging, added that Africa’s digital economy is approaching a period of rapid, significant growth that will positively impact the continent’s GDP, job creation, and overall economic outlook.

Speaking on the projected growth, Tosin Faniro-Dada, chief executive officer and managing director, Endeavor Nigeria, said Africa was set to be the digital growth frontier.

With this, according to him, the level of funding, investors, and the economy will increase.

“Africa is the next digital growth frontier. The combination of our young and digitally savvy population, an emerging technology ecosystem, and the impact of the COVID-19 pandemic on behaviours, is set to trigger an inflexion point in our digitisation journey,” he said.

“We have been excited by the increased levels of funding that our entrepreneurs are attracting but we want to make it even easier for more investors to bring out their chequebooks to catalyse the growth that we believe is pending.”

On his part, Topsy Kola-Oyeneyin, partner at McKinsey and Company, said the report gives investors a prior idea of the opportunities the continent will bring. 

She argues that a number of sectors across the continent are still underpinned by informality and fragmentation, limiting the availability and affordability of products and services.

“These opportunities for disruption abound across the continent and this report will make it easier for interested investors to adjust their business models effectively to capitalise on these opportunities,” she said.

Founded in 1997, Endeavor is a global organisation with a mission to unlock the transformational power of entrepreneurship by selecting, supporting, and investing in the world’s top founders.