It has become a bit of a cliché to speak excitedly about tech, entrepreneurship and talent in African countries. As what might be termed an African entrepreneur myself, who employs many brilliant Africans, there is no doubt that there are particular hubs on the continent for tech-savvy and entrepreneurial talent. The majority of software developers, for instance, can be found in Nigeria, South Africa, Egypt and Kenya, my home country. These hubs attract the most investment across the continent — especially venture capital.

At the same time, it is crucial to focus on underlying factors when it comes to forecasting Africa’s progress on tech, entrepreneurship and talent.

Nairobi is working on creating a ‘silicon savannah’. Cape Town has successfully promoted itself as a hot-spot for data centres and call-centre outsourcing. And as a share of gross domestic product, research and development (R&D) expenditure of South Africa, Kenya and Egypt top the charts on the continent. 

Yet, with too much focus on these major hubs, investors risk missing out on the creative and tech-savvy individuals and firms found in many other African countries. 

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Savvy investors are those who diversify their portfolio. A major issue is that there is simply not enough investment into the African continent, and by concentrating in hubs, investors are setting themselves up for failure. There is so much potential and space for investment in other fast-growing economies on the continent, especially given that the IMF is forecasting up to seven of the world’s 10 fastest growing economies in 2023 and 2024 to be African. Rwanda, Côte d'Ivoire, Senegal and Ethiopia are all exciting countries for seeking out skilled, talented labour.

It’s all well and good to be excited about investment into an African software or e-commerce company, but poor infrastructure holds back latent market demand. Similarly, if medical products from the US or China are subsidised as ‘aid’ and protected by global intellectual property rules, this will limit local firms in innovating adapted solutions. Yes, African governments spend the lowest proportion of their budgets on R&D worldwide, but this is because their fiscal space is highly constrained, meaning the opportunity cost of R&D spend is higher than elsewhere. The alternative is primary education, basic water or road infrastructure. 

That’s why it’s important to focus and invest not just on the individual stories of African creativity and talent, but to look at and work on the big picture. This includes increasing cheap global finance for infrastructure or advocating for easier global intellectual property rules for African countries. This is the only way the current gains in these markets will become sustainable.

Hannah Wanjie Ryder is the CEO of consultancy Development Reimagined and senior associate at the Center for Strategic International Studies Africa Program.

E-mail: hannahryder@developmentreimagined.com

This article first appeared in the June/July 2023 print edition of fDi Intelligence.