Africa's emergent tech sector: It's characteristics impact on development and labour markets

Jann Lay and Tevin Tafese

No 333, GIGA Working Papers from GIGA German Institute of Global and Area Studies

Abstract: This study investigates the characteristics of Africa's tech sector, its digital services, and its impact on economic development, specifically on labour markets. Our literature review and new analyses based on a database of African startups shows that Africa's emergent tech sector is adapting to the continent's constraints on development and, sometimes, contributes to overcoming them. A case in point is the credit constraints that numerous startups have overcome to attract very significant amounts of capital. Tech startups tend to be concentrated in financial services in the "Big Four": Egypt, Kenya, South Africa, and Nigeria. We show, first, that "home-grown" African platform businesses do not simply connect demand and supply, but also invest in logistics and infrastructure; second, that many tech firms offer multiple products that complement the original service; and third, that business models often rely on large networks of agents. We conclude that more evidence on the impact of digital technologies is needed.

Keywords: Africa; digitalisation; startups; development; labour markets; ICT (search for similar items in EconPapers)
JEL-codes: J40 L86 M13 N27 O10 O30 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-afr, nep-ict and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:gigawp:333

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