As the global crude oil price has fallen by more than 50% in recent months, Nigeria, a country that relies heavily on exporting oil and gas, has seen its currency fall accordingly and is now exploring opportunities in the technology industry. Recently, a tech boom has swept across Africa and more than 75% of venture investments in Africa have gone into the technology sector. Economists believe that technology will be the future of the African economy.
The major reason for the tech boom in Africa is that telecommunication infrastructure has improved. The availability of bandwidth, a measure of computer network capacity, has increased by a factor of 200 over the last two years. Multiple undersea cable systems have been installed in Africa, so it now has greater international connectivity.
The banking payments system is being transformed, as mobile devices become broadly used across Africa. Since most people in Africa do not have an international bank account, issues arise when they try to transfer money across continents. Tech startups are now creating ways to allow people in Africa to transfer money via their mobile phones. The rise of mobile phone usage provides opportunities not only for tech startups but also for online retail businesses.
The future of the tech economy in Africa looks positive. First, Africa's urban population is growing younger. This growing population of young people creates growth opportunities for countless tech startups, since young people offer a huge potential talent pool and are willing to take business startup risks. Second, while most emerging economies have been slowed down by the financial crisis, Africa is growing steadily. More investors are turning to Africa for new investment opportunities. The countless African tech startups will benefit the most because they will have more funding from outside investors.
In all, Africa’s economic revolution is necessary because natural resources can no longer provide steady growth. I believe that the emergence of a technology economy will be the best way to ease the current economic woes in Africa.