If you are reading my work for the first time, I’m sure you might be curious to know what crystal ball I operate with to make predictions about a year. Well, it’s simple; some of us are gifted to recognize patterns before they become evident to many others.
We read global trends, dissect available literature and data, and match it with an intuitive nudge from within. As for me, I’ve been pretty accurate with my predictions over the past few years (see a short clip).
And now that 2020 is coming to an end, here are my predictions for 2021:
#1: 2021 will be a new dawn of the African innovation spirit
When Black Panther premiered two years ago, smashing all Box Office records with $1.3 billion in revenue, we saw the news and took note. At about the same time, Nike broke its sales records in football kits with over 3 million people pre-ordering the Super Eagles World Cup kit. But those weren’t isolated case studies of salespeople creating the Lollapalooza effect by triggering multiple cognitive biases of unsuspecting consumers. Fast forward to 2020. The Disney Animation Studio has entered into a first-of-its-kind partnership with Pan-African entertainment startup Kugali to create Iwájú, an all-new, science fiction series set to debut on DisneyPlus in 2022.
So you say, Tom-Chris, what do you think is happening here, and how do these reports have anything to do with 2021?
Well, in my opinion, those results are proof-positive of the potential of innovations rooted in authentic African narratives. Let’s look at some historical facts. When Satya Nadella, Chief Executive Officer of global technology giant Microsoft, visited Kenya in 2015 to launch the much-anticipated Windows 10, he said that the unveiling marked “the start of a new generation of windows.” And if that launch is of such prime importance to the company, he chose a country in Africa because he, like other global leaders, know what I’m telling you to be true. They’ve seen the numbers. West Africa’s mobile ecosystem alone will be worth more than $50 billion by 2022, according to GSMA. Further analysis from a collaborative study by Google and the International Finance Corporation (IFC) highlights that Africa’s Internet economy can reach $180 billion by 2025, accounting for 5.2% of the continent’s gross domestic product (GDP). And by 2050, the projected potential contribution from the sector could reach $712 billion, representing 8.5% of the continent’s GDP.
When you match that data with transformational works of various African leaders, such as Pastor Chris Oyakhilome, who build bridges and speak faith, confidence, and motivation for innovation into the African youth, you realize that we’re about to witness the storied African innovation renaissance!
#2: Venture Capital inflow will continue to take an upward clip
There’s a reason why global payments giant Stripe pumped $200 million into acquiring Nigerian fintech company Paystack.
As you read this article, venture capital funding in Africa accrues to $1.6billion. That’s a 25% increase from 2019, despite the pandemic. Apart from the fact that more innovations are coming to light on the continent and Africa is a vast developing market of over 1 billion people, such a dramatic rise in VC funding stems from common sense. If you look at what’s happening in places like San Francisco and compare that picture with once forceful ecosystems such as Iran, you’ll begin to get the logic.
When power-drunken governments and policymakers screw up, smart people don’t live with their actions and give up hope. No! They find options elsewhere, either by setting sail, employing their money in different contexts, or both. It’s how the world works.
Investors read the patterns and make decisions accordingly. With a predominantly progressive business climate and a teeming youth population (the youngest worldwide), African economies will continue to flourish. Look beyond fluctuating currencies, logistics challenges, social tensions resulting from poverty and corrupt governments, and other such indexes. The numbers show that with the ongoing regional harmonization efforts, less-restrictive policy frameworks, growing talent pipeline, and digital connectivity, this market will continue to be the region of interest for many years to come.
#3: Regional integration will spark a shift in platform ownership
To quote the e-economy in Africa report by Google and IFC, the Africa Continental Free Trade Agreement (AfCFTA) has the potential to unite a market with a combined GDP of $2.6 trillion. The AfCFTA, which takes effect from January 2021, aims to reduce tariffs on 90% of all goods and facilitate the free movement of goods, services, capital, and people. It will also enable Africa’s regional economic communities to become more integrated and more comfortable to access, including startups’ ability to scale across Africa seamlessly.
In my opinion, these efforts in harmonizing regulatory frameworks, and ongoing investments in infrastructural developments such as subsea and terrestrial connectivity, will spark a shift in platform ownership beginning from 2021. Already, we see the groundworks with platforms such as Strive Masiyiwa’s Africa Data Centres, which they said is Africa’s largest network of interconnected, carrier- and cloud-neutral data center facilities.
For so long, there’s been a growing concern on the need for Africans to have a stake in platforms and tools that process and store their data, food, money, and so on, and I think that we are finally in that era where more African innovators will take leading roles in creating such platforms. Of course, my team at SFAN is not left behind in that drive. We are working night and day to bring fresh perspectives to talent development on the continent through the ReadyForWork.Africa initiative.
This post was first published on SFAN Blog