Think Africa’s economic boom is over? The tech space is about to prove you wrong

A recent piece by Rick Rowden suggests that Africa’s economic boom is over . He couldn’t be more wrong.

In his article, Rowden argues that due to the collapsing commodity prices and the lack of industrialization, the boom is over. Everyone assumes that what Africa has to offer the world is oil, gold, minerals and that industrialization is the only path to a boom. Building an industry is good and Rick makes some important points about how to do that but he misses the real point. Africa’s boom is just starting and it’s a tech boom.

The World Economic Forum is kicking off today with the question “Is Africa leading the innovation revolution?“, Fortune has detailed “Why Africa may be on the verge of an Internet Boom“, The Wall Street Journal has suggested that Africa may be hiding the next Mark Zuckerberg and Quartz Africa has evidence that “African startups are defying the global tech slowdown“.

Twenty years ago, Africa started charting a different course for its boom in the tech industry. Africa leapfrogged the world from no landlines to mobile, which made the continent not only a mobile first but also a mobile-only and mobile-web continent. The years 1995 to 2010 saw the establishment of mobile companies such as MTN, Celtel (now Airtel Africa), Glo, Econet, and others plus Internet Service Providers (ISPs) by private local entrepreneurs like Phuthuma Nhleko, Mo Ibrahim, Mike Adanuga and Strive Masiyiwa, who connected Africans to mobile and the Internet.

Of all the regions in the world, mobile’s impact is greatest in Africa. Mobile phone services account for more than 6% of the continent’s GDP according to the GSM Association (GSMA) in it’s report “Sub-Saharan Africa Mobile Economy 2013”. A 2009 report by the WorldBank on Information and Communication for Development stated that mobile and broadband has more impact in developing than developed economies.

A research report published by Freshfields revealed that investments in the Telecom, Media and Technology (TMT) sector in Africa over the last decade made 19% annualized returns which is higher than the African MSCI Index of 11% and the Oil and Gas sector of six percent.

People like Rowden focus their story of Africa’s growth on natural resources and we all know commodities boom and bust so that’s misleading, what he is missing is the bigger story that the TMT sector made more than double the returns compared to commodities. The title of the Freshfields report is “Africa is poised for tech take-off” and aptly so because mobile growth has laid the foundation for a tech renaissance. The Africa rising narrative is underpinned by an Africa tech rising. The BBC submitted that Africa’s mobile boom is powering the innovation economy .

The arrival of submarine and terrestrial cables from 2010-2015 brought broadband to the masses and catalyzed the emergence of the digital economy. Africa’s millennials and digital natives, instead of looking for job or a way to vacate the continent, have caught on to the development of mobile web applications and are unleashing their creative juices and entrepreneurial prowess to disrupt traditional markets and address key pain-points for both rich and poor customers.

Africa’s 70% youth population are turning themselves into an asset class that now asks less and less about who will help them and more and more about what problems they can solve and which businesses they can build—as a consequence creating employment and paying taxes. By leveraging the Internet this generation is developing programming and business skills—sometimes without any formal education—and, coupled with their need to survive, they are expressing themselves by inventive software and other product solutions. Economist George Ayittey calls these individuals the “Cheetah Generation” and he reckons the salvation of Africa lies on their back.

The rest of the world is over indebted and has an aging population, whiles Africa has lots of room for productive investment and a growing population; Rick points to the risks of that but he misses how entrepreneurship and the tech revolution are fuel that transformation.

The Internet has significantly reduced the entry barriers for starting tech companies addressing problems for everyone from urban consumers to rural farmers. These entrepreneurs are building the next generation of startups that are turning into new SMEs—businesses that in any economy are the true engines of growth and the main creators of jobs. In developing economies SMEs are a critical part of reducing poverty. As incomes increase, this will in turn increase the demand for products and services, generating a virtuous cycle.

This phenomenon is currently prevalent in the economies of Kenya, Ivory Coast, Nigeria, Ghana and South Africa, the “KINGS” of Africa’s Digital Economy. The KINGS countries lead the rest of the continent because of the greater penetration of broadband and development of pro-innovation public policies. They all have mobile penetration rates above 90%, with broadband available to many citizens right on their phones. They also have centers of innovation like the iHub in Kenya, Orange Fab in Ivory Coast, Leadpath in Nigeria, MEST in Ghana and 88MPH in South Africa where millennials and digital natives are unleashing their innovations. Chika Nwobi and Kresten Buch made an assessment in this piece.

Kenya leads the KINGS with her innovation in mobile money, which has become a global phenomenon. The KINGS economies will produce Africa’s unicorn businesses, companies with almost vertical growth rates. A recent Harvard Business Review article named Kenya, Nigeria and South Africa as three African countries where the digital economy is moving fastest in the world .

Steve Case, Co-Founder of AOL and now Chairman of Revolution and his wife Jean Case, CEO of the Case Foundation recently visited three of the KINGS countries, Kenya, Ghana and Nigeria.

“The most exciting thing I’ve seen {in Africa} is great entrepreneurs…they really have great ideas,” said Steve. “Some of them are going to be great businesses that change the world and create a lot of value and create a lot of jobs. It has been encouraging.”

Jean meanwhile said, “You know I have also tried to underscore that the other area that is very impressive here, is the degree of participation by women in the entrepreneurial sector. Everywhere we’ve gone, we’ve seen amazingly talented strong women really bringing it and building some great new enterprises.”

Of course Africa has it’s problems like national security, balance of payment crisis, infrastructure, education, leadership, etc. And tech alone can’t transform Africa and provide the jobs it needs but it stands to be a critical catalyst and it’s importance overlooked. What is needed is for Africa’s leaders to build and implement comprehensive strategies that puts tech as an integral part of our national development. Whether this happens or not, Africa’s tech transformation is racing ahead and leading the way.

Some of these tech companies will become global giants. In the same manner Asia produced Ali Baba, the biggest tech company in the 20th century, Africa stands to produce this century’s dramatic success stories—in digital not commodities. Watch out for the tech boom led by the KINGS of Africa’s digital economy.