Africa's $180 Billion Internet Economy
Africa's enormous digital potential is attracting major global tech players, prompting both promising opportunities and critical questions about digital sovereignty.
🌟Good morning, entrepreneurs & tech enthusiasts!
By 2050, Africa’s population is estimated to reach 2.5 billion - the equivalent of eight United States. With over half of this population under the age of 25, a tech-savvy generation is taking shape. Combined with steady increase in internet penetration and mobile device adoption, Africa’s digital market can be expected to surpass current leading economies.
Today, Ghana and South Africa boast internet penetration rates above the global average of 66%, at 68% and 72% respectively.
This growing internet access has fueled an increase in digital activities, like social media, online shopping, and mobile payments.
As online services demand escalates, enterprises both large and small are migrating to the cloud. Think banks, telecom companies, insurance providers, airlines, airports, schools, hospitals - all looking for secure, reliable and scalable cloud infrastructure.
The potential for investments is huge! Recent McKinsey research shows that the global cloud value could reach $3 trillion by 2030, with $797 billion of the share in Africa and Europe.
Africa has become a focal point for international tech giants, creating a scramble for a piece of the pie of this growing market and making the continent a primary focus for tech expansion.
In an open letter to the government, Microsoft explicitly addressed China's increasing influence in Africa, calling out the government to strengthen the US-Africa trade and investment relationship to bolster the competitiveness of American companies.
China’s influence is undeniable, with cloud providers like Alibaba, Huawei, and Tencent.
In October 2023, Alibaba launched a cloud region in Johannesburg, South Africa, via a local partner, Telkom subsidiary BCX. A strategy that allows them to gain access to BCX’s big customer base that it has built since 1996.
Meanwhile, as of September 2023, Huawei Cloud had sites in South Africa, Kenya, Nigeria, and Egypt, with additional data centers planned for East and West Africa in the next two years.
Compared to China’s established data centers in over a dozen nations, US counterparts have made more focused investments in South Africa, Nigeria, and Kenya.
Flutterwave entered a five year agreement with Microsoft to build their fleet of payment services on Microsoft Azure.
Microsoft plans to build a new data center in Johanesburg ontop of the two data centers that it already owns in the South Africa.
Google also announced a new Cloud region in South Africa earlier this month.
The influx of international players like the Chinese and American companies have accelerated growth in the continent with their mature, tried and tested products.
Bringing data centers closer to home allows African companies to localize data storage, which guarantees lower latency and faster service processing. Some big investments that have shaken the state of the arts include:
MTN’s launch of its core 5G service on Microsoft's South African Azure region. This investment impacts millions of MTN users than now have access to fast internet.
Old Mutual, one of the biggest and oldest banks in South Africa shutdown it’s physical data centers and migrated to AWS. A move that has reduced downtime of their services by 50%.
Despite the potential benefits of foreign partnerships and these success stories, the question of Africa's digital sovereignty lingers on the sidelines.
As digital data becomes increasingly valuable, how will African governments ensure their nations' information is protected and citizen privacy respected, especially in the hands of foreign companies?
We invite you to join the discussion – what strategies do you envision for upholding African digital sovereignty? Share your thoughts in the comments below!