The African Internet economy has the potential to reach 5.2% of the continent’s Gross Domestic Product (GDP) by 2025, which is nearly $180 billion of the economic output, says a new Google report in collaboration with International Finance Cooperation (IFC).
The report highlights the rapidily expanding digital connectivity across Africa over the last decade.
With 16% of the global population being in Africa, and 60% of this population under 24 by 2025 (1 in 3 youths globally by 2050), the continent is expected to be the only continent with a decreasing dependency ratio globally by 2050.
SEE ALSO: 2019 Global Economy in Review: Sub-Saharan Africa Has the Largest Informal Economy
According to The Inclusive Internet Index, below are the top African countries best positioned for the thriving Internet economies:
- South Africa – 50th globally
- Tunisia – 60th globally
- Morocco – 62nd globally
- Kenya – 64th globally
- Nigeria – 65th globally
16 African countries have been identified as among the early adopters and likely to exceed the average iGDP estimates of 5.2%.
A higher demand for faster and more reliable internet also means the above economies are better positioned and require the development of content in local languages and educational initiatives in digital literacy skills.
Below are some details from the report that inform these statistics:
- 19 out of 20 fastest-growing countries in the world are in Africa
- Africa is home to the youngest and fastest – growing working population in the world
- Nigeria is the largest single market in Africa
- The 54 different regulatory environments across Africa makes it a huge headwind facing the ecosystem when it comes to scaling fintechs across the continent
- Africa’s GDP grow by 4% per year between 2010-2019, moer than twice that of the European Union and Latin America over the same period
- 4.5% of Africa’s GDP in 2020 is Internet economy – up from 1.1% in 2012
- There are 350 million middle-income earners in Africa
- 15 – 20 million educated Africans will join the workforce every single year for the next 30 years
- Africa has a developer community of about 700, 000
- The number of people trying to join the labor market exceeds the number of new jobs created every year by 7 million to 9 million
- 11 mobile money services are available across Sub-Saharan Africa
- 300 million Africans gained Internet access between 2010 – 2019
- 40% of the African population has Internet access
- 60% of Africa Internet access is via mobile
- 3G broadband connections are predicted to account for 54% of all connections by 2025
- 4G connections will reach 31% by 2025
- Fixed broadband to triple by 2023
- Monthly data consumption to increase by over 300% between 2018 – 2024
- A 10% increase in mobile Internet penetration increases GDP per capita by 2.5% in Africa
- 8.6% of Sub-Saharan Africa GDP in 2018 came from mobile services and technologies – a $144.1 billion gain
- Electronic payments in Africa expected to grow by 35% between 2018 – 2023
- 623 million users in Sub-Saharan Africa will have access to mobile internet by 2025 – an increase of 167 million from the current subscribers of money services
- Smartphone connections will more than double by 2025
- Facebook is available in at least 7 African languages
- Google Translate providers translation services in 13 African languages
- Internet users will grow by 11% in Africa by 2025 – 16% of the total global figure
- 44 million jobs will be created with 75% of the African population online
- Active physical hubs that support digital entrepreneurship in Africa have doubled in just 3 years to almost 650 between 2016 – 2019
Speaking about these projected developments, Nitin Gajria, Google Africa Director, said:
“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.”
~ Nitin Gajria, Director, Google Africa
Among the factors expected to fuel the internet economies in Africa include:
- Infrastructure investments
- Private consumption
- Strong developer talent
- Public and private investment
- New government policies and regulations
The report estimates that Africa’s iGDP may have the long term potential to add $712 billion to the continent’s economy by 2050.
The internet economy is growing 6x faster than major emerging markets on average. Technical talent such as software developers and other digitally skilled workers are a key indicator of a country’s ability to take advantage of the Internet economy and digital trade.
As a result, countries such as Egypt and Kenya are well positioned to take advantage of the global digital trade.
Download the full report here.
Google’s mission is to organize the world’s information and make it universally accessible and useful. Through products and platforms like Search, Maps, Gmail, Android, Google Play, Chrome and YouTube, Google plays a meaningful role in the daily lives of billions of people and has become one of the most widely-known companies in the world. Google is a subsidiary of Alphabet Inc.
IFC – a member of the World Bank Group – is the largest global development institution focused on the private sector in emerging markets. The organization worsk in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, it invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty, and boost shared prosperity. For more information, visit www.ifc.org.
RECOMMENDED READING: Africa Accounts for Less Than 1% of the Digital Economy – UN Digital Economy Report 2019