3 Trends Bolstering Entrepreneurship in Africa

Africa has emerged as one of the most exciting entrepreneurial markets in the world. Nations across the continent have shown great promise with revolutionary products tailored to their own markets. In July, the Global Entrepreneurship Summit was held in Africa, a testament to the continent’s emerging importance on the international stage. Entrepreneurial hubs have arisen in East Africa, West Africa, and South Africa. African entrepreneurship has its own unique flavor that focuses less on driving forward with major technological revolutions and more on tackling and alleviating the social issues faced by large groups of African people. Entrepreneurship continues to grow in Africa, and it is largely being bolstered by the following three trends:


  1. The growing popularity of mobile money. Traditional banking in Africa has largely been eclipsed by mobile money, which began in Kenya under the name M-PESA. According to estimates, about 70 percent of adults in Kenya use M-PESA. In fact, about a quarter of Kenya’s entire gross national product flows through mobile technology. Mobile payments have made transactions more secure and conducting business significantly safer. Entrepreneurs no longer need to carry large quantities of cash. Instead, they can make and receive payments with the click of a button, which keeps their income more secure.

In the past year, M-PESA has begun to grow exponentially across borders as more telephone companies team up to offer the service. In 2014, $48 billion was sent in Africa through mobile money apps. Companies such as Vodafone Group and MTN Group have joined forces for the first time in history to facilitate cross-border money exchanges and to expand access to M-PESA throughout Africa. As the technology becomes more widely accessible, an increasing number of individuals will purchase cell phones, which double as a connection to the Internet.

The growth of mobile money options offers entrepreneurs in rural areas or those who do not have access to reliable traditional banks with a new payment alternative. The ability to make payments across borders will open even more doors for Africa’s small businesses.

  1. logo_mvoiceIncreased use of crowdsourcing. The growing connectivity afforded by cell phones has caused many radical changes in African nations. Apps like MajiVoice.com and Ushahidi have created new forms of infrastructure and brought communities closer together. MajiVoice.com allows individuals to report water service delivery problems from anywhere using SMS. Once issues are reported, water service companies receive notifications so that they can quickly respond to the issue. If problems go unaddressed, they are escalated to the Minister for Water in Kenya. Ushahidi is a platform used by many non-governmental agencies to keep communities informed and connected.

Hundreds of millions of people in Africa have access to cell phones, which makes crowdsourcing a powerful tool. Tanzania used an app based on the Ushahidi platform to crowdsource malpractice information during elections. This sort of app demands a much higher level of transparency from governments and empowers people to ensure that their elected officials are looking out for their best interests. Government transparency is extremely important for the future of entrepreneurship. When individuals create a company, they need to know that they will have certain governmental protections and that those protections are enforceable.

Crowdsourcing may also have a direct role in entrepreneurship through crowdfunding and micro-investments. When linked to mobile money capabilities, crowdsourcing has the ability to draw funding from the community. In addition, entrepreneurs and investors can use crowdsourcing platforms to identify community needs to address through their projects.

  1. internet-148635_1280Governmental focus on improving infrastructure. In recent years, many African governments have placed considerable emphasis on development technology infrastructure, especially Internet access. For example, Kenya invested in sub-marine fiber optic cables to significantly reduce the cost of Internet access. Through this initiative and other improvements, Kenya increased Internet access five-fold in just five years. As of 2013, half of all Kenyans had reliable Internet access.

Nigeria has also made major investments in infrastructure in recent years in an attempt to boost its ability to innovate in the technology field. A report released by PricewaterhouseCoopers predicted that Nigeria would have the 13th largest economy in the world by 2050, largely due to its recent and continued investment in technology infrastructure. The Nigerian people have some of the most promising and revolutionary ideas of anyone else in the world, yet not all of them have access to the technologies they need to make their ideas a reality. The report predicts that Nigeria will pull ahead of South Africa and Kenya in terms of development once a more complete infrastructure is in place.

In many African countries, infrastructure still has a long way to go, from building better electrical systems to constructing more cellular towers. The growing emphasis on expanding infrastructure points to an increasing number of opportunities for entrepreneurs in the coming years. The African Development Bank even proposed a pan-African cloud-computing network that would create an IT infrastructure to fuel a new wave of startups around the continent and expand opportunities into cities and countries where few options currently exist.


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