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Africa Rising: Startups as Catalysts for Economic Change in Africa

Oct 21, 2023 10:00AM ● By Okechukwu Nzeribe

Photo by Monstera Production

Africa, often referred to as the dark continent by many whose opinion varied extensively from that held by the acclaimed Welsh journalist and explorer Henry Morton Stanley, who according to history had labeled Africa as such due to its mysterious landscapes, culture, and people, has experienced an emergence as the next frontier for an emerging ecosystem of business startups.

Driven by its unmistakable bulging youth population with rich human capital possibilities, the continent is poised to unlock the full potential of Africa and its people thereby driving innovation, economic growth, and social change.  

With the current challenges faced by Africa, especially with regard to the growing unemployment amongst the youth, growing awareness exists that maintains that startups may hold the key to realizing Africa's full potential and advancing its interests.

According to the Jobs for Youth in Africa publication report by the African Development Bank, it was pointed out that “of Africa’s nearly 420 million youth aged 15-35, one-third are unemployed and discouraged, another third are vulnerably employed, and only one-in-six is in wage employment. Youth unemployment roughly double the rate of adults, with significant variation by country. The problem is not just unemployment but underemployment, which peaks at just over half of youth in the labor force in low-income countries”.

Between 2018 and 2022 the continent witnessed the emergence of more than 7600 startups across various regions of the continent with the major players being Egypt, Nigeria, South Africa, and Kenya. Within the same period, startups in Africa raised above $2 Billion USD, while in the first quarter of 2023, they were able to raise up to $3.1 Billion.

The World Bank estimates that African startups have the capacity of upwards of 22 million jobs in sub-Saharan Africa in 2030.

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With a growing presence in several industries like Fintech, Consumer/Lifestyle, Hospitality, Agriculture, e-commerce, logistics, and transportation, several traditional supply chains have experienced massive disruption in their processes and this has given rise to the creation of new business models.

Companies KongaFlutterwaveM-Pesa and many others have continued to stimulate economies, foster trade within and outside the continent and place Africa on the map as the next best investment destination.

Despite the limitations experienced by several startups such as infrastructure, entrepreneurs within the ecosystem are continually developing imaginative solutions to address local problems.

Anti-counterfeiting solutions like the one produced by mPedigree have been of great influence in combating the menace of fake drugs.

Image: Twiga foods warehouse in Kenya. Source: Twiga Foods

In agri-tech, companies like Twiga Foods in Kenya connect rural farmers directly to retailers which provides the farmer a ready market for his/her produce.

Fintech companies like FlutterwavePiggyvestPaystack in Nigeria have offered financial services to the unbanked by providing access through various mobile banking solutions. This has revolutionized the traditional banking system by ensuring people have more inclusion in the banking infrastructure. 

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Startups are answering the question, “What are the possibilities that exist in Africa”? The possibilities are endless and this beautiful continent has much more to offer than the negative stories that occasionally find its way to mainstream media. They are also seizing every opportunity to serve as a catalyst for transformative change.

Investors must begin to seize the myriad of opportunities that lie in wait in a continent with a great percentage of its productive workforce within the ages of 15-45. Through Venture BCapital funding, investors can also play a role in supporting startups that prioritize social and environmental sustainability.

Africa awakens to a new dawn and the best time to invest was yesterday.

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 Okechukwu Nzeribe works with the Onitsha Chamber of Commerce, in Anambra State, Nigeria. He loves unveiling the richness of African cultures. [email protected]

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