Malaria, Ebola, tribalism, war, hunger and devastating poverty have all been used to characterize the Dark Continent as Africa is known. Western countries have continuously poured money to Africa driven by motives of charity to those of profit in an effort to combat these ills. On the other hand, Africa has made a lot of progress as is seen in the numerous advancements in technology.
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Technology is playing a key role as Africa shifts from the margins to the mainstream of the global economy. The emergence of an IT ecosystem has supported regional trends in business, urbanization and investment. This IT ecosystem consists of an integration of entrepreneurs, innovation centers as well as tech ventures merging from one country to another.
The Silicon Valley investment is pouring into South African and Kenyan ventures. Nigeria has also become a lucrative spot for tech startups. Africa’s tech efforts trace back to East and West African countries. Kenya’s technological advancements included a globally recognized crowdsourcing app, mobile money technology and the government having a genuine commitment to the ICT policy.
Nigeria’s technological sector has redesigned Africa’s global linkages. It has become a home for big tech investments and commercially oriented startups. The country has become a hotbed for investors and entrepreneurs alike who are fascinated by the prospect of escalating applications to the large population and economy.
Technological innovations are influencing multiple sectors across African countries such as; agriculture, healthcare, banking, transport, energy, fashion and entertainment. This has been the case in Nigeria, Kenya, Rwanda and Ghana.
One of the requirements of trading in tech stocks is having the ability to foresee future trends. Some of the things to expect in Africa’s technological future include;
- Startups tapping into the informal economy.
Most of Africa’s economic activity is informal and therefore is without services like small business banking, internet access and business enterprise software. This means that venture capitalists will back tech startups to try to scale apps for this informal economy. There is a notable improvement in the penetration of broadband and smartphones meaning the opportunities are endless.
- Competition in ICT between states.
There is also a competition between states in the ICT sector. Each country is trying to outdo the other in the technological sector by improving on its ICT policies and infrastructure. This means that the policies will be favorable enough to attract new investors.
When it comes to investing in Africa, there are two ways you can go about this. It can be a direct approach through Africa specific funds or indirectly through the broader funds which join with other nations to invest in African countries.
To get started in tech investing in Africa, below are a few tips to follow and make the most out of your investment experience;
- Bulletproof your finances
Technology stocks are usually quite volatile. To minimize the risk, have a well-defined investment strategy that covers your time zone, goals and tolerance to risk.
- Find an online brokers
Open an account with a stockbroker who is licensed. Find those who offers an online trading platform. This gives you more freedom to buy or sell shares. Be sure to know beforehand the amount they charge when opening and maintaining an account as well as the documentation required.