B2B opportunities will continue to rise in tech and related industries, as will B2C opportunities in line with employment in the sector. MNCs should target established and emerging tech hubs within SSA cities—consumer-facing firms should assess earmarking these areas for their premium offerings. Moreover, MNCs should consider ICT literacy when assessing or developing their local partners’ capabilities—this will become increasingly important in sales and post-sales engagement. Furthermore, increased openness from local partners to engage less in face-to-face interaction provides greater scope for a hybrid model of channel management, offering potential efficiency gains.
Over the past decade, ICT has grown rapidly in SSA, becoming a key growth driver in countries such as Nigeria, Kenya, and Ghana. The sector’s growth surged in 2020. Several West African startups—mostly Nigerian fintech firms such as Flutterwave and OPay—achieved unicorn status (having a value of at least US$ 1 billion) in 2021, amid a flurry of multimillion-dollar investor-funding rounds. According to VISA, e-commerce users in SSA rose 5% YOY in 2020.
COVID-19 accelerated the fast-growing sector in SSA, as it facilitated business continuity during lockdowns. However, tech’s rising relevance will outlive the pandemic, because it has increased firms’ customer reach (via e-commerce) and efficiency (via digital payments). E-commerce has also proved convenient for SSA consumers, who have been averse to transactions without face-to-face engagement. Tech’s ability to facilitate growth in other sectors will particularly benefit financial services, education, and healthcare by allowing service providers to extend their reach more effectively. In addition, its momentum will continue to drive the growth of a relatively well-paid portion of the workforce, boosting consumer demand among a resilient consumer segment. In South Africa, even as total employment in the sector declined between 2018 and 2020, skilled employment in the sector continued to climb, highlighting buoyancy in the higher-income jobs. Moreover, SSA governments will continue to promote ICT initiatives, aiming to improve tech literacy and leverage the industry’s growth for economic development. Not all countries will experience the same tech boom, but more hubs will appear in the next few years, joining Lagos (especially the “Yabacon Valley” area), Cape Town, and Nairobi.
At FrontierView, our mission is to help our clients grow and win in their most important markets. We provide the research, data, and insights you need to outperform the competition. Subscribe to our weekly newsletter The Lens published by our Global Economics and Scenarios team which highlights high-impact developments and trends for business professionals. For full access to our offerings, start your free trial today and download our complimentary mobile app, available on iOS and Android.