Tech sector to add £67.4 billion, three million jobs to economy
Nigeria’s technology sector is projected to create three million jobs and generate £67.4billion for the economy by 2021.
This is according to the United Kingdom Digital Minister, Matt Warman, as quoted by UK’s Department for Digital Culture, Media and Sport, on Monday, at the first-ever UK-Africa Investment Summit in London.
The UK’s Department, while inviting African tech firms to join the UK-led growth project, through the Go Global Africa, said the plan would enable them to take their businesses and ideas to the next level.
Go Global Africa, a scheme run by the Department for Digital, through its International Tech Hub Network, aims to build links with the UK’s thriving digital sector and pave the way for future economic partnerships.
The successful programme, which first launched last year, is currently open to firms from Kenya, Nigeria, and South Africa developing tech solutions in finance, agriculture, health and clean energy.
Entrepreneurs, who have developed products that are ready to go to the market and already raised investment are invited to apply.
Warman said: “Africa is home to a rapidly growing tech sector and it is great to welcome leading figures from across the continent to the UK-Africa Investment summit. Through the Go Global Africa project, we are giving entrepreneurs the support they need to grow their business and benefit from the UK’s world-leading tech and innovation expertise. This will allow them to continue developing technology to improve lives around the world. I encourage all those with the talent and ambition to succeed to apply for a place on this exciting project.
“Africa is home to a rapidly growing tech sector. Its start-ups raised 50 per cent more venture capital in 2017 than in 2016. The majority of this is being invested in South Africa (£130 million), Kenya (£114 million), and Nigeria (£89 million).
“Nigeria’s tech sector generates more than 10 per cent of the country’s economic output and the sector is projected to create three million jobs and generate £67.4 billion for the economy by 2021. Kenya’s technology sector is growing rapidly and is worth more than 11 per cent of the country’s economic output. It is considered one of the most vibrant, advanced and successful in Africa.
“South Africa attracted a record amount of investment in tech of any African country in 2017. It raised almost £128 million and research by the World Economic Forum ranks it as the best place to do business in Africa.”
According to Warman, the Digital Access Programme aims to boost digital skills and connectivity and build the cybersecurity capacity of partner countries.
The UK minister said it will also help create a thriving digital ecosystem that will stimulate innovation to address local development challenges, create skilled jobs and generate partnerships between the UK and Africa.
The launch of Go Global Africa 2020 coincides with the start of the UK-Africa Investment Summit in London, which will bring together businesses, governments and international institutions to showcase and promote investment opportunities across Africa.
In a related development, a €60 million grant has opened to technology startups in Nigeria, South Africa, Kenya, and other parts of Africa with focus on developing solutions for the attainment of the Sustainable Development Goals (SDGs).
Championed by Janngo, through its dedicated investment vehicle Janngo Capital Startup Fund, it was announced on the eve of the 50th World Economic Forum.
The fund is a first of its kind Venture Capital & Impact vehicle investing from seed through growth stage across Africa and targeted at least 50 per cent of startups founded, co-founded or benefiting women. This initiative is part of Janngo’s broader commitment to financing the SDGs in Africa, as a member of the Goalkeepers Community and the Global Future Council on the New Economic Agenda of the World Economic Forum.
Already, the report said in Africa; only three million jobs are created every year when at least 20 to 30 million jobs will be needed to absorb its fast-growing labour force in the coming years. In this context, unlocking entrepreneurship is a critical lever to massively increase the supply of decent jobs and bridge the unemployment gap, both in the formal or informal sector.
Executive Chair of Janngo and Managing Partner of Janngo Capital, Fatoumata BA, explained that “In 2050, we’ll be roughly 2.2 billion people in Africa, which means that we need to find now massive ways to feed, educate, house, care for and employ more than one billion people in less than 30 years. We believe traditional development models have failed because they were unbalanced and unsustainable either only focusing on commercial returns or too heavily aid-based: our thesis strikes the right balance between delivering solid returns to our investors while being socially accountable, solving key market failures and leveraging technology to help leapfrog development. That’s our ikigai, our reason for being, as Janngo means “Tomorrow” or “Future” in Fulani.”
African women are known to be the most entrepreneurial in the world with a 26 per cent total entrepreneurial rate in Sub-Saharan Africa, where they are twice as likely to start a business than elsewhere (Source: Roland Berger). Yet, there is currently a $42 billion funding gap for women entrepreneurs in Africa according to the African Development Bank. Additionally, the larger the ticket size, the harder it is for women in emerging markets to get access to capital with only 10 per cent of women entrepreneurs able to raise money from Series A vs 49 per cent at the seed stage.
“At Janngo, we believe that talent is equally distributed between men and women but opportunities aren’t; especially in terms of access to capital. That is why we are proud to be a female-led VC fund investing 50 per cent of our proceeds in startups founded, co-founded by or benefiting women,” said BA, adding that Sustainable Development Goals in Africa needs a stakeholder approach to accelerate progress towards delivery in the next decade.
With a €60 million investment vehicle 100 per cent dedicated to African startups achieving both an economic performance and a social impact, Janngo’s commitment is paving the way for SDGs financing in the Venture Capital Space in Africa. This pool of capital includes a €15 million ticket from the European Investment Bank (EIB), the world’s largest multilateral financial institution and the biggest provider of climate finance.