Africa’s Internet Economy to Contribute $180bn to GDP by 2025
- A report highlights that Africa’s economy will experience more growth due to the expanding urban and mobile population
- The study found that access to early-stage and pre-seed funding is still lacking across most of the continent
- The year 2019 saw venture capital investment in Africa reached an all-time high
A report by Google and the International Finance Corporation (IFC) has stated that by 2025, the Internet economy in Africa could account for 5.2% of the continent's gross domestic product (GDP) and bring in close to $180 billion.
According to the report e-Conomy Africa 2020, Africa's internet economy would undoubtedly experience exponential growth as a result of the continent's expanding urban and mobile population and its immense potential.
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Legit.ng earlier reported that National Bureau of Statistics has revealed that Nigeria's internet user population rose to 154.8 million in the fourth quarter of 2022 with Lagos leading the list. Read more to know about different internet service providers in Nigeria.
In particular, Google and IFC estimate that today's internet p*netration is 40%, and a 10% increase in mobile Internet usage can boost Africa's GDP per capita by 2.5%, compared to a 2% global rise.
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Potential internet contribution could reach $712 billion in 2050
The report highlighted that increasing Internet p*netration to 75% has the potential to create 44 million new jobs. according to report, the projected potential contribution could reach $712 billion by 2050.
Stephanie von Friedeburg, Interim Managing Director, Executive Vice President, and Chief Operating Officer of IFC, analysed the research and stated that the digital economy can and should alter the history of Africa.
He continued by saying that now is the perfect time to harness the strength of Africa's tech startups to develop urgently needed solutions to improve access to finance, healthcare, and education, as well as to assure a more durable recovery, making Africa a global leader in digital innovation and other fields.
He added that digital startups in Africa are driving innovation in fast-growing sectors, including Fintech, Healthtech, media and entertainment, e-commerce, e-mobility, and e-logistics, contributing to Africa's growing internet gross domestic product (iGDP), defined as the internet's contribution to the GDP.
Nitin Gajria, director of Google Africa, stated that Google and IFC produced this research to emphasise the role the digital startup sector is playing as well as other factors that are propelling the growth of the continent in order to highlight and promote the prospects the continent offers.
African startups still having difficulties accessing funding
The study also discovered that much of the continent still lacks access to early-stage and pre-seed investment. 82% of African entrepreneurs reported having trouble obtaining finance in a 2019 poll.
The main problems, however, are a shortage of angel investors, a lack of follow-on finance, and inadequate startup capital.
Additionally, investment in venture capital in Africa achieved a record-high in 2019, rising year over year for the previous five years to reach a record of $2.02 billion in equity money raised in the last year, while the first half of 2020 finished with $493.5M of total funding.
Following e-Commerce in garnering 54% of all startup investments in 2019, fintech businesses continue to be the top recipient of funding.
Nigeria's e-Naira Upgraded With New Feature to Enable Use Without Smartphones and Internet
Legit.ng earlier reported that the Nigeria’s digital currency, the e-Naira now includes a Near Field Communication (NFC) feature, a chip-enabled device that allows its use without smartphones or internet access.
The Central Bank of Nigeria (CBN) said the development will allow wallet owners to transact financial businesses seamlessly with the aid of tags attached to their phones.
This means that going forward, users will need little or no human effort as the NFC technology is made up of a short-range high-frequency wireless communication technology that facilitates data exchange between devices of over a 10cm distance.
Source: Legit.ng
