The hurdles in African technology investments

By Nmachi Jidenma in The Next Web

Investors and entrepreneurs building Internet-based tech companies are essentially banking on two things – exponential growth in the earning potential of the average African and massive increase in the availability of the Internet to more and more Africans over the next decade.

The economic growth numbers of many African countries and decreasing bandwidth prices show that these are good bets. However, the time horizon might be extremely long or short depending on how quickly these bets materialize. In a sense, their actualization should be viewed best as a journey where the absolutes should not be as important as the growth rates.


This highlights how much of a journey the African growth story is. African countries would have to continually grow year after year until there is a clear and thriving middle class. Along the way, robust infrastructure (payments, broadband, transportation & logistics) e.t.c. would need to be built to allow for substantial monetization to support online business models. Then there is the issue of building the local digital advertising market into one that is a lot more mature and that can support advertising based Internet businesses. Some of these issues are being tackled by a myriad firms, but as we can see with the recent shutdowns, it is still early days.


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