Internet services across Africa must improve and become cheaper in order for the potential of the continent’s tech startups to be realised, according to panelists speaking at the AHUB.
Disrupt Africa reported the second annual AHUB kicked off yesterday (November 15) in Cape Town, co-located with the AfricaCom event, bringing together startups and investors to share ideas and collaborate.
Panelists discussing ICT for development agreed governments and the private sector need to act now to improve internet access – and bring down the costs of connectivity – across Africa, if local startups are to make the most of the market opportunities presented on the continent.
“I don’t think there’s a glass ceiling for internet-based startups. The growth will be there. But right now, we need to do something [about internet connectivity]and stop waiting for the government to do it,” said Kehinde Oriola, chief executive officer (CEO) of Nigerian e-commerce startup DealDey.
According to Alan Knott-Craig, CEO of Project Isizwe, internet connectivity is key to creating the markets of scale that startups need to unlock their true value.
For example, he says the US and China are able to produce the most tech startups – which scale regionally and globally – only because they have the most people online, and taking up new services.
“Until you’ve got a big enough market for your own goods, how can you expand?”
[African] startups can’t make enough money, because there’s not enough people online,” he said.
However, Thione Niang, ambassador at the US Department of Energy, said the challenge in Africa is not only providing digital tools, but training people to be able to make the most of them. He says not enough young people in Africa are leaving school with adequate tech skills.
“Africa today has a huge opportunity with ICT, to help develop growth and job creation,” he said.
“The problem we see is many Africans are coming out of university and aren’t trained enough in ICT skills.”
As such, Niang called upon government to invest in education and training initiatives in the digital space, to ensure young people are able to take advantage of newly created jobs, and the possibilities of online entrepreneurship.