Africa’s digital economy to reach $712bn by 2050

Africa's technology ecosystem is on the verge of a significant boost, as a new report from Endeavor Nigeria forecasts that the continent's digital economy is set to soar to $712 billion by 2050. The rapidly expanding GDP, flourishing consumer spending, burgeoning youthful population, and escalating digital penetration are all contributing to this optimistic outlook for the region's digital economy. Tosin Faniro-Dada, the CEO of Endeavor Nigeria, highlighted these key factors in a recent interview with CNBC Africa. Faniro-Dada emphasized the transformative impact of Africa's growing economy, making a compelling case for the continent's potential in the digital space. One of the crucial drivers identified in the report is Africa's remarkable economic growth trajectory. Faniro-Dada illustrated that Africa has outpaced other regions in GDP growth, tripling since 1990. The continent has demonstrated a substantial increase in consumer spending, fueling economic activities and propelling GDP growth further. Moreover, Africa's youthful and digitally astute population is a significant asset, with projections indicating that by 2050, the continent will be home to 1.6 billion working-age adults and a third of the world's youth population. This demographic dividend presents a vast pool of talent and entrepreneurial potential. Additionally, the escalating digital penetration in Africa is a pivotal factor in driving the continent's digital economy. With over 300 million people accessing the internet between 2010 and 2019, the digital landscape is ripe with opportunities for innovation and growth. The report also sheds light on the funding dynamics within Africa's technology ecosystem. While there is a substantial influx of investments at the seed stage, there is a noticeable drop of 84% at the Series A stage. This funding gap poses a challenge for startups looking to scale and evolve. Global investors predominantly focus on growth-stage businesses, leaving a void in early-stage funding. Local investors are gradually rising to address this gap, primarily focusing on seed and preceding stages. The report aims to empower investors to take bold steps in funding early-stage startups and bridge the investment divide. Faniro-Dada underscored the resilient spirit of African entrepreneurs and investors amidst economic uncertainties. Despite challenges such as inflation and recession in key markets like Nigeria, Kenya, and South Africa, there is a growing appetite among investors to diversify their portfolios in emerging markets. The report advocates for a renewed focus on building and scaling businesses, leveraging untapped opportunities across various sectors. One of the critical areas highlighted in the report is the need for nurturing tech talent to meet the industry's evolving demands. While tech talent shortages persist globally, African markets are witnessing a surge in demand for skilled professionals. Investing in training and upskilling initiatives is crucial for fostering a robust tech ecosystem and nurturing future innovators and entrepreneurs. Consumer spending in Africa is projected to witness a steady rise, driving economic growth despite inflation concerns plaguing the region. Faniro-Dada emphasized that consumer spending has continued to grow even during periods of recession, positioning Africa as a resilient market with substantial growth potential compared to other regions. With a focus on leveraging Africa's economic momentum, nurturing tech talent, and addressing funding challenges, the report by Endeavor Nigeria outlines a roadmap for the continent's digital economy to thrive in the coming decades, propelling Africa into a global tech powerhouse.