The Internet economy has the potential to contribute $180bn to the economy of Nigeria and other African countries by 2025, according to a new study by Google and International Finance Corporation.
The findings of the study made public on Wednesday highlighted the growth opportunities within the continent and provided a road map for investment opportunities.
The e-Conomy Africa 2020 report noted that despite the delayed economic growth in Africa and the rest of the world as a result of the COVID-19, African Internet Gross Domestic Product might grow to $712bn by 2050.
Analysts said this growth in Internet economy would be driven largely by private consumption, strong developer talent, public and private investment, investments in digital infrastructure, and new government policies and regulations.
Based on The Inclusive Internet Index, South Africa, Tunisia, Morocco, Kenya, and Nigeria were identified as countries with thriving Internet economies.
The report stated that a growing urban and mobile population, a rising tech talent in Africa, and growing tech companies’ investment in subsea and terrestrial fibre-optic infrastructure had tremendous potential to the economy.
According to the report, tech talents in Africa continue to rise with 83,609 tech developers in Nigeria and close to 700,000 professional developers across Africa.
Commenting on the report, the Interim Managing Director, Executive Vice President and Chief Operating Officer of IFC, Stephanie von Friedeburg, said, “The digital economy can and should change the course of Africa’s history.
“This is an opportune moment to tap into the power of the continent’s tech start-ups for much-needed solutions to increase access to education, healthcare, and finance, and ensure a more resilient recovery, making Africa a world leader in digital innovation and beyond.”
The analysts estimated that increasing Internet penetration to 75 per cent had the potential to create 44 million new jobs.
Findings indicated that digital start-ups in Africa were 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 GDP.
“Google and IFC have created this report to highlight the role the digital start-up sector is playing and other factors driving the continent’s growth in order to showcase and support the opportunities the continent presents,” said Google Africa Director, Nitin Gajria.
Google and IFC analysts called for proactive regulation as regulatory inconsistency could hamper market access and limit investment opportunities for start-ups.
According to them, Start-up Acts and regional harmonisation are initiatives that are driving mutually beneficial growth.
They said it had become crucial for entrepreneurs, investors, and policymakers to continue to dialogue with regulators, encouraging environments where digital businesses could thrive.