Africa Rising. This was the golden thread woven throughout the third annual AfricArena Summit which took place recently in Cape Town. Issues affecting the African tech ecosystem were unpacked by a panel of speakers comprised of some of the most interesting thought leaders, founders, investors and corporate changemakers of our time.
Opening the event, Silicon Cape Director, Zimkhita Buwa, said: “Africa is synonymous with opportunity. Yes, we have incredible challenges, but we are not waiting on the side-lines for the world to provide us with solutions, we are creating our own solutions using our own technology.”
AfricArena Founder, Christophe Viarnaud, continued: “Africa is rising. The amount of investment in the continent has doubled every year for the last three years, particularly in the tech sector. Last year, we cracked the $1 billion mark for the first time and we think that this amount will be even bigger this year, with over $1.2 billion being invested. Sadly however, this is still less than 1% of global funding that goes towards tech startups. We can’t grow this continent which will have a population of over four billion by the end of the century – the majority of the planet – if we don’t dramatically increase that number. Our mission, as AfricArena, is to create opportunities for investment and make a difference by helping entrepreneurs - the number one asset on the continent – which, in turn, will deliver value to investors and create much-needed jobs.”
French Ambassador to South Africa, Aurélien Lechevallier, shared that at the South Africa Investment Conference held earlier this month, several French companies announced that they would invest more than R20 billion in South Africa in the next three years. “We will ensure that part of this investment will be filtered through small and medium enterprises. France and South Africa share the same belief in the potential of Africa’s tech ecosystem, but we know that the main challenge remains to mobilise enough resources from private investors to make it grow. As President Macron declared, France is committed to support African startups and SMEs by helping some of them to overcome the access to funding gap.”
He went on to say that the French Development Agency has launched Choose Africa to bring support to 10,000 African companies between 2018 and 2022 by mobilising €1 billion, another €1 billion in equity and €1.5 billion in credit lines. Within this initiative, there is a focus on the digital economy and innovation, driven by a dedicated online platform called Digital Africa which will help African entrepreneurs to get in touch with their counterparts as well as financial and industry partners both in France and other African countries. It will also enable them to participate in specific calls for proposals and challenges. President Macron’s launch of a €65 million fund to support the acceleration of startups on the African continent last year is also a very strong signal of France’s commitment towards cooperation in service to innovation.”
During the panel discussion on Next Generation Angels, Tomi Davies a Nigerian British Investor, Entrepreneur and Advisor to companies on technology strategy, posed the controversial question: “Why can’t Africa build Africa? I’m under no illusion that we are going to do it all by ourselves, but I do believe that charity should begin at home.”
Fellow panellist, Nigerian Entrepreneur, Iyinoluwa Aboyeji, added: “More than 50% of the world’s population over the next 35 years is going to be in Africa. Ultimately, this will either be a bomb or a boon for the global economy. Investors that are not betting on Africa, are betting against the global economy. In Africa there is talent that can learn anything, more relaxed governance restrictions and the ability of businesses to grow very fast in contrast to other markets. What we need to do is continually build the infrastructure that makes this possible and support the growth of businesses."
Unpacking some of the gaps hampering Africa’s success was venture capitalist and serial entrepreneur, Vusi Thembekwayo, who explored four areas: The investment approach; the education gap; opportunistic BBBEEE players and the infrastructure gap. “Africa doesn’t need pity, it needs opportunity, so how do we develop mechanisms that create and broaden access, but most importantly democratise opportunity?”
Picking up on this theme, Ketso Gordhan, CEO of the SA SME Fund, said: “Our hope and desire is to make sure that smart entrepreneurs are seizing upon how the world is changing and using new technologies to make the world a better place. Venture Capital (VC), for me, is about the future, it’s about innovation, it’s about economic advancement and solving what seem to be intractable problems speedily. However, in South Africa, some of the biggest problems affecting VC include a lack of access to capital, too few experienced VC fund managers, a weak pipeline of start-ups, high costs of failure - both financial and reputational - and a fractured VC ecosystem.” On this last issue, he urged attendees to concentrate on partnerships rather than competition with each other. Gordhan also announced the launch of a new fund, Digital Africa Ventures, which is dedicated to financing early-stage African startups.
While speaking on the topic of Privacy & Ethics: Who’s responsibility is it anyway? Danai Musandu, Investment Associate at Goodwell Investments, warned: “As much as we can be excited about the booming digital age in Africa, we need to remember some key things about our continent – 54% of the population don’t have access to healthcare, one in six live off an electricity grid, and 70% of people are unbanked. So, when we talk about this continent, we need to be cognisant that we are talking about Africa’s mass population. We can’t talk about digital solutions without looking at the physical reality on the ground. We have to look at the people we are serving on this continent. We talk about all of this exciting digital innovation on the continent, but opportunity also brings with it more responsibility for all involved. We determine the narrative for our ecosystem, and as co-authors, we are equally responsible to ensure we build the right story; a story by Africans for Africa.”
Looking to the future, Thierry Barbaut, Digital and Communications Director at La Guide, said: “Africa will have a population of over 2.5 billion by 2050 and this requires solutions for providing food, water energy and healthcare for all. Technology and communication startups can provide this.” Giving the example of Rwanda, which was war-torn in the 1990s and is now thriving, he highlighted how tech startups are transforming health, energy, education agriculture and other sectors in the country, with many of these models being replicated in bigger countries.
Viarnaud brought the event to a close by stating: “There is no question that Africa is the future. As AfricArena, we will continue working to bring the continent’s tech ecosystem together to ensure that it is a successful one.”