What Factors Determine the Country to Invest (tech) in Africa?


#1

I have noticed a trend now. In Sub-Saharan Africa, the entry points are usually either of these three countries: Kenya, Nigeria and South Africa as far as tech businesses are concerned. Sometimes the order can take any form, could start with either of the three.

What factors determines where they start, and where they go next, because if a company hits East Africa, they probably do Kenya and Uganda, then head west for Nigeria and probably Ghana. Why not Tanzania, Zambia, Ethiopia, Zimbabwe? Is it the age old internet access and other infrastructure only?


#2

Its because of the data and metrics…the local addressable markets in Kenya,Nigeria and South Africa is in the millions,the internet infrastructure is also better than most countries in the continent and around the world,the local populations are also adopting and relying on tech more for their daily lives i.e MPESA,Mobile payments is also very strong and these countries have more younger people using and consuming the latest and greatest in technology.Also these countries have more flexible internet regulations and their democracies guarantee freedoms of speech and expression that enhances internet access and usage.Lastly,All these countries have growing economies with services,individuals,government and businesses increasingly offering their services online to cut costs/expenses/delivery time and increase income/revenue/profits.


#3

For Kenya, at least, the attraction is our willingness to try new ideas. Most foreigners say we are open to new ideas wherever they come from. I read an interesting analysis about this propensity here. A lot has also been written about the willingness of Kenyan regulators to tolerate untried products without throwing regulatory hurdles. Then of course there are tons of unmet needs. Think of the fast cooking jiko and you have jikokoa, an online bank and you have Branch, solar on the go and you have mkopa, cheap animal feed and you are thinking of lisha bora, an online accounting tool and you have usasibu, among many others. Frankly, i am amazed by the innovativeness of the guys from the west like north America and Europe. Their product ideas are so good that we adopt then pap, instantly. Of course there are also kenyans creating great products like simba pay guys, jambo pay, cullulant, and a few others. The vast majority are just creating mediocre things.


#4

Also I guess due to the economic position and strength of a country. Like since Kenya has a higher GDP (than UG, TZ, SS etc), tech companies can assume that income per family is higher and so their services will be bought and used more in such a country.


#5

Yeah, what @bhattkishan9 said and also the rapidly growing middle class in Kenya. Have you seen how many international companies have set up shop in Kenya in just five years? Also the number of new shopping malls is mind boggling. All these are indicators that Kenya is ripe for the picking. We’re entering an era whereby the global capitalists are starting to take notice and I’m sure that won’t go well for any of us no matter how you think about it.

One more thing; Kenya, Nigeria, and South Africa, in addition to having better infrastructure than most African countries, reward financial malfeasance. International companies hate accountability and that’s why they love tax havens and any other country where they can do some “creative accounting” to avoid billions in taxes.