African Tech Ecosystems Are Emerging In Unexpected Places
The African tech revolution is in full swing, with countries like South Africa, Kenya and Nigeria getting most of the attention. Yet tech ecosystems are developing elsewhere too, and in the places you would least expect.
Somalia has a reputation as a war-torn country, known to the West for Al-Shabaab and pirates off its coast. That may be, but there is evidence the country is becoming a hotbed for tech.
Somalia has one of the most active mobile money markets in the world, outpacing most other countries in Africa, including that of Kenya, a recent World Bank report found. Somalians make around 155 million mobile transactions, worth $2.7 billion, each month, with mobile money having superseded the use of cash.
This creates some exciting opportunities in the country, offering the chance for entrepreneurs in various spaces – not least fintech – to shine. In general, a tech scene is developing, with the recent arrival of Somalia’s first accelerator and fund – Innovate Ventures – and its first fully-fledged tech hub, iRise.
Abdigani Diriye is a research manager at IBM, and also co-founded Innovate Ventures, which has already invested in a host of early-stage Somali tech startups. He says there are signs of a burgeoning tech scene in Somalia, with more established firms providing digital services to millions of Somalis.
“At the same time we are seeing a lot more startups being launched. E-commerce, ride-hailing and food delivery apps are becoming popular, and hubs and accelerator programmes like ours have been established,” he said.
Assisting with this growth is the government, which has been supportive of initiatives like Innovate and is, Diriye says, committed to creating a vibrant tech scene that generates jobs. The arrival of incubators and accelerators will assist with much-needed support, mentoring and investment.
“Innovate Ventures has been operating for the last few years and what we have seen during this period in our programmes is the quality and quantity of applicants has increased, and we are seeing a larger number of startups go on to be profitable and self-sustaining,” said Diriye.
Funding, however, remains in short supply.
“The Somali startup space is largely untapped and represents an open playing field for new players to establish a foothold in important sectors. We’re already seeing some above average returns for certain startups and this should excite investors both local and international,” he said.
“There is a still a lack of investment at the seed level to help kickstart and provide a longer runway for startups. Ideas that could be transformational and yield profitable businesses end up not seeing the light of day.”
African tech ecosystems under development in previously troubled nations
These challenges are universal, and can be overcome in time. Another country with a chequered recent past attempting to deal with such issues and develop a tech scene is Libya. Still in recovery after its civil war, the country is slowly building a small reputation in the tech space, and recently hosted the Seedstars World early-stage startup competition for the first time.
One of the companies that took part in that event was She Codes, which provides coding and programming training to women. Co-founder Najla Almissalati says war-shattered Libya is witnessing the birth of a new generation of tech entrepreneurs. As in Somalia, the government is supporting it.
“The government is trying to support entrepreneurs by setting up competitions and events such as Libya Startup Expo, the national programme for small and medium-sized enterprises, and different entrepreneur bootcamps in collaboration with the European Union,” she said.
Libya still lags behind Somalia in terms of having local ecosystem support players such as incubators and accelerators, which Almissalati said would help a lot.
“They would allow the existing startups to grow and flourish, and would encourage and make it easier for new startups to be born, which will absolutely improve the Libyan economy,” she said.
Unlike Somalia, however, Libya does have a fund for startups, with the Tatweer Entrepreneurship Campus and the United Nations Development Programme (UNDP) having made cash available to small businesses in a three-year initiative. Serious challenges remain, however.
“The current situation is really difficult and the political instability is affecting everything. I’d say that the economic situation is one of the main issues that faces Libyan tech startup founders,” Almissalati said.
“Moreover, the currency crisis and high exchange rate of hard currency made it really difficult, especially for tech-related startups as there is always the need of hard currency for buying the required equipment.”
That said, there has been slow but steady progress, leading to hopes that previously written-off nations like Somalia and Libya could yet have tech revolutions of their own.
Tom Jackson is co-founder of Disrupt Africa, a news and research company focused on the African tech startup ecosystem.