Africa’s internet economy could be worth $180 billion by 2025: Report

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Africa’s Internet economy has the potential to reach 5.2% of the continent’s gross domestic product (GDP) by 2025, contributing nearly $180 billion to its economy, a new report seen by Naija247news released Wednesday by Google and the International Finance Corporation (IFC), estimates.

“Google and IFC have created this report to highlight the role the digital startup sector is playing and other factors driving the continent’s growth, in order to showcase and support the opportunities the continent presents,” Google Africa director Nitin Gajria said.

According to the report, digital connectivity has rapidly expanded across Africa over the past decade. Between 2010 and 2019, more than 300 million Africans gained access to the internet, with nearly 500 million new smartphone connections.

Presently, across the continent, 60% of the population accesses the internet via mobile. By 2025, 167 million more people from Sub-Saharan Africa will have subscribed to mobile services reaching 623 million users, and smartphone connections in the region will more than double. In the next decade, the number of internet users in Africa will grow by 11%, representing 16% of the total global amount.

Google and IFC project that in the next decade, the number of internet users in Africa is expected to grow by 11%, representing 16% of the total global amount. With this increase in internet access, it could mean the creation of 44 million jobs if 75% of the population has access to the Internet.

“The digital economy can and should change the course of Africa’s history. This is an opportune moment to tap into the power of the continent’s tech startups for much-needed solutions to increase access to education, healthcare, and finance, and ensure a more resilient recovery, making Africa a world leader in digital innovation and beyond,” said Stephanie von Friedeburg, Interim Managing Director, Executive Vice President and Chief Operating Officer of IFC.

How internet connectivity will lead to economic opportunities

Of the total GDP for Sub-Saharan Africa in 2018, 8.6% came from mobile technologies and services, translating to a $144.1 billion gain. In addition, nearly 3.5 million people were employed in the mobile sector, and corresponding taxes contributed another $15.6 billion.

Increased connectivity has presented an opportunity for businesses and communities to leapfrog with new technologies, paving the way for economic development. 144 mobile money services are available across Sub-Saharan Africa, serving more than 469 million registered accounts with daily transactions amounting to $1.25 billion by the end of 2019, compared to 298 million registered accounts for traditional bank accounts in 2017.

Across the continent, 60% of the population is accessing the Internet via mobile. By 2025, 167 million more people from Sub-Saharan Africa will have subscribed to mobile services reaching 623mm users, and smartphone connections in the region will more than double. In the next decade, the number of Internet users in Africa will grow by 11%, representing 16% of the total global amount.

Partech Ventures Africa, a global investment platform for tech and digital companies, says that the continent is currently home to 700,000 developers with venture capital funding increasing year-on-year for the past five years reaching a record of $2.02 billion in equity funding raised in the last year.

According to Partech, this growth is due to a combination of factors such as increased access to faster and better quality Internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa’s commitment to creating the world’s largest single market under the African Continental Free Trade Area (AfCFTA).

Investments in infrastructure, consumption of digital services, public and private investment, and new government policies and regulations will play an important role in supporting Africa’s digital growth. The report notes that investment in digital skills will also need to increase in order to help drive technology usage and continue to grow the continent’s talent pool.

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