A new research report published by Google and the International Finance Corp (IFC) has found that Africa’s Internet economy could reach 5.2% of the continent’s GDP within five years, contributing nearly US$180-billion (R2.8-trillion).
The projected potential contribution could reach $712-billion by 2050, Google and the IFC said in a statement.
The report was created on the two companies’ behalf by Accenture.
Driving this growth is a combination of increased access to faster and better quality Internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant start-up ecosystem and Africa’s commitment to create the world’s largest single market under the African Continental Free Trade Area, they said.
“Africa is home to 700 000 developers and venture capital funding for start-ups has increased year on year for the past five years, with a record $2.02-billion in equity funding raised in 2019, according to Partech Ventures Africa,” the firms added.
Google and the IFC published the report to highlight the role the digital start-up sector is playing and other factors driving the continent’s growth, said Google Africa director Nitin Gajria.
In 2020, the Internet economy is likely to contribute about $115-billion to Africa’s $2.55-trillion GDP, or 4.5%. This is up from $99.7-billion (3.9%) in 2019, the report said.
“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,” Google and the IFC said in the statement. The report said investment in digital skills is also needed to help drive technology usage and continue to grow the continent’s talent pool.
“The African Internet economy is one of the largest overlooked investment opportunities of the past decade with potential for profound impact on development,” the report said. “The mobile Internet is transforming life across the continent with the support of growing local connectivity and mobility and a dynamic, young urban population.”
The full report, called e-Conomy Africa 2020, is available here. — © 2020 NewsCentral Media