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Network Infrastructure Magazine | Tuesday, June 14, 2022
One of the solutions to driving Africa’s economic development could lie in the small and medium enterprise (SME) sector.
FREMONT, CA: By 2030, Africa's young population is predicted to reach 1.4 billion, and by 2050, it is likely to reach 2.1 billion. In comparison to Europe, where populations are ageing and shrinking, over 70 per cent of Africans are under the age of 30. This young population has immense potential for economic growth and creativity, but only if it is taken advantage of. According to United Nations figures, Africa boasts 30 per cent of the world's mineral resources and 65 per cent of the world's arable agricultural area. South Africa, for example, possesses 90 per cent of the world's platinum deposits, while Nigeria and Libya are among the top ten oil-producing countries. Africa also has the most cobalt reserves, with the Democratic Republic of the Congo accounting for more than two-thirds of world supplies. Cobalt has become a crucial resource as the globe shifts to green energy sources, particularly in the automotive and power generation industries.
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A BCG report on mobile payment banking points out that Kenya and Ghana have the second and third highest levels of mobile payments usage behind China, highlighting Africa’s great potential. In Kenya, mobile transactions account for 87 per cent of GDP, while in Ghana, it adds up to 82 per cent. To put this into context, by 2025, the African mobile payment market might have 850 million subscribers, which is 100 million more than the total population of Europe.
African firms, particularly SMEs, confront numerous constraints, including a shortage of cash, specialised skills, raw materials, and markets. Lack of acceptance of new technologies is generating plenty of problems for Africa's SMEs, including inadequate planning, a lack of forecasting capability, and a lack of capacity to take advantage of artificial intelligence and machine learning's productivity advantages. Access to new markets for raw materials or finished products could be facilitated by digital supply chains and business network solutions. Innovative use of technology, like mobile banking, might help SMEs overcome immediate problems and spark a new wave of creativity across the continent.
Even though Africa continues to face numerous complicated challenges, the continent is replete with opportunities. For African firms, the moment has come to utilize technology as a strategic resource to drive innovation and growth.
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