Population Growth, Technological Adoption, And Economic Growth in Africa

Africa is the next big growth market – and for a good reason. The continent has young, growing populations, a promising consumer class, and a quickly developing digital ecosystem.

We all know that the African continent is rich in natural resources, fertile land, and youthful talent. That is why it’s so devastating that many countries continue to struggle with poverty and inequality while development in other regions of the world marches ahead.

However, over the next few years, Africa is set to become a major player in the global digital market as it experiences new innovation and digital expansion levels. Ten percent of its population is increasingly able to surf the internet and access smartphones and other devices, enabling them to participate in the global marketplace. Today’s tech boom will help drive tomorrow’s unprecedented economic growth as African internet users grow up and begin to consume with incredible speed, making this the next major growth market.

Africa's Economic Growth

Africa is at a crossroads in economic development efforts. Despite some successes, Africa remains the least integrated region globally, with only 16% of trade occurring between African states. In contrast, intraregional trade within Latin America and Asian countries is 57% and 55%, respectively. Only seven out of 50 African countries have access to fast internet, and most Africans don’t have credit scores. Some 20 million people remain displaced internally or as refugees across Africa—a number that continues to grow. And poor governance from weak institutions and too much corruption cost significant financial resources: GDP growth would be two percentage points higher if corruption were eliminated.

Even though the signs are unsettling, we believe digital technology can be a game-changer for Africa—if the right steps are taken to reap its benefits.

Digital technology is enabling a shift away from traditional ideologies and ways of doing things. However, Africa’s economic growth has stalled. While the continent is home to many opportunities, 437 million people live in extreme poverty in sub-Saharan Africa, and 10 of the world’s 19 most unequal countries are there. Still, if real action is taken to address this now, Africa can meet its potential.

As the only continent where its workforce is growing over the next decade, Africa offers a unique context for harnessing new opportunities that can transform it into one of the leading economies in the world. But to ensure this happens, Africa needs strong health systems and quality education that create an enabling environment for employment opportunities.

Africa is predicted to have 2.4 billion people by 2050, and 48% of the continent will be living in urban areas, most of it in mega-cities. As a result, governments will need to invest heavily in infrastructure and education to tap into these potential workforces.

Since 1960, the African population has grown rapidly and far beyond any other continent. Today, with 1 billion inhabitants, it accounts for 16% of its population. In addition, by 2050, Africa’s share of the world’s population is projected to rise to more than 25%. This means that Africa will have some of the largest mega-cities in the world.

Digital Innovation And Technology in Africa

On the one hand, Africa arguably remains the frontier that it has been for most investors. Yet, nearly 50% of African countries now pay out more in interest than they receive in foreign investment.

Digital technology has enormous potential to accelerate economic and social development across Africa, but many countries are not yet in a place to fully seize the opportunity. Moreover, the potential of digital to drive substantial economic growth across sub-Saharan Africa is much broader, extending beyond connectivity to the creation of jobs, improvements in the business climate, and innovations that enhance efficiency and accessibility in essential social services.

The pace of digital evolution across the continent creates both opportunity and peril. African countries that innovate and collaborate to develop their technical, social, and political capacity can reap benefits from the economic and social opportunities that flow from digital connections and new manufacturing opportunities. Those systems will not just bring jobs and prosperity but also boost Africa’s agricultural sector—a critical source of livelihood for about half the population of sub-Saharan Africa.

Hoshistech is building a new reality for technology and advancement in Africa. We're accelerating startups with innovative products to drastically improve the quality of life. Visit us to learn more.