Fostering Fintech and Wider Tech Youth Entrepreneurial Empowerment in Africa by Richie Santosdiaz for The FinTech Times
Editor's Choice Fintech Middle East & Africa Partnerships

Fostering Fintech and Wider Tech Youth Entrepreneurial Empowerment in Africa

The African continent is massive – spanning across a diverse range of territories in terms of their cultures, languages, histories and economic development. With the ladder, the continent, particularly its youth, as whole has the potential to grow and further develop its human talent. How can this foster and help Africa?

PROMOTE TECH AND ENTREPRENEURSHIP AT A YOUNG AGE THROUGH EDUCATION

Fintech and wider tech will play a strong role in Africa's digital transformation and economic development
Fintech and wider tech will play a strong role in Africa’s digital transformation and economic development IMAGE SOURCE GETTY

First, promoting fintech, wider tech, and the concept of entrepreneurship at a young age in schools is important. It will help to show the current and future youth that careers in tech and the idea of starting one’s own business is a respected career path – as what many view professions such as doctors, lawyers and engineers – for instance.

Evidence of this is already happening. For example, Mastercard’s signature science, technology, engineering and mathematics (STEM) programme, Girls4Tech™, recently reached its initial goal of educating one million girls. They have an ambition to reach five million girls by 2025.

It is not only just encouraging the future generation to get into tech but to give the youth access to an education and the digital tools such as edtech to learn. Online learning and other resources to transmit knowledge are needed. However, it remains a challenge when it is estimated that 800 million Africans do not have internet.

MAKE IT EASIER TO START A BUSINESS AND REDUCING POVERTY

Countries in Africa such as Rwanda and Mauritius are regarded well in terms of ease of doing business
Countries in Africa such as Rwanda (pictured – capital and largest city Kigali) and Mauritius are regarded well in terms of ease of doing business IMAGE SOURCE GETTY

Second, access to finance and all components to start a business. In addition, as Africa as a whole is an emerging region in terms of economically, there still remains work in reducing the rate of poverty across the continent.

For example, in terms of youth employment, Uganda and East Africa, despite having talent in the area, has a youth unemployment rate of around 80 percent. In terms of poverty, Africa in 2015 had a poverty rate of 41 percent. With infrastructure, 31 percent of the global population does not have 3G coverage, while 15 percent have no electricity. In sub-Saharan Africa, some 600 million people (almost two-thirds of the region’s population) do not have regular electricity.

With starting a business, African countries are not often on the top of the list such as Singapore, the United Arab Emirates (UAE) or the United States. Many countries unfortunately do not rank high in ease of doing business such as that of the World Bank. Saying that, Rwanda (29th  – the second highest in Africa) and Mauritius (20th – the highest in Africa), do rank well. Despite the challenges in Africa as a whole, there are various attempts to change this.

For example, in a press release earlier this year, the African Development Bank Group (Groupe de la banque Africane de Developpement) stated that the group has been at the forefront of driving Africa’s economic transformation, leveraging its diverse resources and unique know-how as an indigenous development finance institution. Its ten-year strategy has shown benefits for millions of Africans, such as a $7.6 billion replenishment by donors of the African Development Fund (ADF), signifying a 35 percent increase. The ADF’s objectives are to contribute to poverty reduction and economic and social development the 38 least developed African countries through providing concessional funding for projects and programmes, in addition to technical assistance for studies and capability development activities.

Another example of the success of the work the ADF has done has been resource mobilisation for women-owned businesses at the G7 summit. Back in August 2019, the President of the Bank Group, Akinwumi Adesina, launched a global campaign of the Affirmative Finance Action for Women in Africa (AFAWA) to mobilise $3 billion for female entrepreneurs in Africa.

USE DIGITALISATION AS THE FOREFRONT FOR CHANGE

Wider digital transformation is a key trend globally, even before COVID-19; in Africa this also applies. With the changes in daily live, both in a pre and pandemic world, aspects of life from payments to artificial intelligence (AI) have strong tech components. Fintech plays a significant role in a country’s digital transformation.

For example, at a recent webinar ‘Nordic-African Webcast 2020’ organised by the Norwegian-African Business Association, H.E. Dr Amani Abou-Zeid, Commissioner for Infrastructure and Energy, participated together with H.E. Ine Marie Eriksen Søreide, Minister of Foreign Affairs of Norway, Mr. Raymond Carlsen, CEO of Scatec Solarand and Mr. Samalia Zubairu, President and CEO of Africa Finance Corporation. The panel discussed opportunities for Nordic-Africa partnership and investments. The AU Commissioner highlighted that despite the pandemic, it provides an opportunity to address challenges in Africa, notably digitalisation, renewable energy and skills for the future.

In terms of closing gaps with digital solutions, for instance, much of Africa is unbanked, such as in Egypt where an estimated that 67 percent of Egypt’s population is still unbanked. This has allowed for African home-grown technology such as M-Pesa to help address challenges in the continent. M-Pesa is a mobile phone-based money transfer service, payments and micro-financing service, launched in 2007 by Vodafone Group plc and Safaricom, Kenya’s largest mobile network operator.

REVERSE BRAIN DRAIN

Tech clusters such as San Francisco attract talent from across the world
Tech clusters such as San Francisco attract talent from across the world IMAGE SOURCE GETTY

Third, reverse brain drain is important to address. It is important to note, not just in Africa as a whole but across the developing world, often the brightest highly-educated often would be lured to developed economies such as the United States, Canada and Western European countries like the United Kingdom and Germany as well as in Asia Pacific such as Singapore and Australia. This is clear with other developing countries such as India, the Philippines, Pakistan and Bangladesh, where millions of their citizens – both low and highly-skilled individuals – seek future opportunity abroad.

For example, Nigeria, Ethiopia, Egypt, Ghana and Somalia were the top countries in Africa where their citizens migrated to the United States. This is not just a problem with emerging economies like the African continent as a whole but even within developed economies like the United States, where in tech for instance the best and brightest will often migrate to tech clusters such as Silicon Valley and San Francisco in California or New York City.

The challenge tech as a whole and specifically entrepreneurship and innovation brings is that if the aspiring entrepreneur leaves their country, they are taking not only their talents but future benefits to the economy such as job creation, revenues in taxes – to name a few – as well as intangible benefits such as innovative know-how and IP of his/her solution to the benefit to tech clusters like Silicon Valley, London or Dubai.

To point out, it is not only encouraging the current populations in Africa to create innovation in their home countries but also to encourage the successful African diaspora either to return back and/or invest in their country of origin.

Converting Africa into significant highly-skilled economy and fintech and wider tech can play a huge component of that. Despite a long-road to doing that, there have been significant steps made. This will continue if human capital and talent are fostered and empowered to generate future African tech solutions.

TFT_Banner_728x90_NewsletterSignUp_Red.jpg

Author

Related posts

DSB to Creates Technology Roadmap

Manisha Patel

Certes Networks Enters Extended Partnership With Leading Cybersecurity Provider in Middle East

Mark Walker

Behind the Idea: Monedo

Gina Clarke