Author: Evelyn Shumba

Africa's tech habitude is on the rise. Internet usage has risen significantly on the continent. On top of that, the advent of the coronavirus pandemic accelerated the prospect of growth in the digital sphere. E-commerce is one such opportunity that affords businesses access to broader market opportunities in every arena. According to McKinsey, a worldwide consulting firm, the e-commerce industry in Africa is expected to grow to a $75 billion industry by 2025.

E-commerce is growing. It is accelerated by a growing and youthful population that is increasingly exposed and has an appetite for greater efficiency and improvement of business to first-world standards. The African diaspora has also contributed to this growing demand as people have become more exposed to what is going on around the world. Technology itself dissolves existing borders and opens up trade regionally and internationally.…

Over $50 billion worth of aid is poured into Africa every year. Most of it is targeted towards poverty reduction, hunger, and achieving sustainable development goals. Yet Africa remains among the poorest of the poor. The level of disease still continues to stay high and mortality rates remain high. Unemployment levels are soaring and the standard of living remains very poor. 

Lack of access to electricity and clean drinking water coupled with lack of food in some areas is very much a reality. 85% of Africans are surviving on an income less than $5.50 per day. In trying to take stock of the situation an assessment of the efficacy of aid is a necessity. 

Given the amounts of aid that have flowed in, there are questions as to why the state of the continent continues to be pitiful. Does aid stifle economic growth? Does aid have the transformative power

The continent faces a stark challenge of energy availability. More than 60% of the population has no access to electricity. Moreover, a lack of clean energy for cooking remains a challenge. Even those with access to power face severe power cuts triggered by load-shedding and faults. Both triggers can be traced back to infrastructural challenges, including a lack of adequate generation capacity and aging infrastructure.

 According to the World Bank’s State Of Access To Modern Energy Cooking Services Report, only 10 percent of sub-Saharan Africa has access to modern sources of cooking energy.  

The effect of this inadequacy creates a ripple effect of problems. In terms of health, people are affected by diseases such as respiratory illnesses born out of using unclean energy sources. 

Further, the environment suffers. In order to obtain firewood for cooking and other purposes, people are forced to cut down trees, often most indiscriminately. In

The realities on the African continent are unpalatable. The levels of financial, education and energy poverty among several other scales of poverty are extremely high. Yet the continent lies on a bed of natural resources and is adorned by some of the most beautiful scenery in the world. 

On top of that the biggest resource—its people—are capable of churning out ideas and innovation that can change the narrative on the continent. Africa is far from hopeless. Recognizing this, the African Union has set out to take steps towards achieving the realisation of a first class economic powerhouse by 2063. 

The African Continental Free Trade Area (AfCFTA)

In a bid to achieve this agenda, a free trade area that seeks to create one common market through the integration of African countries was born. Of the 55 African countries 54 signed the agreement with Eritrea choosing to watch from the

In 2013, the African Union penned the Agenda 2063 policy meant to revolutionize Africa into a formidable powerhouse among global players. 

Key pillars of the policy include a thrust toward poverty eradication and sustainable development. The key to the achievement of this policy and any other that promotes Africa’s future lies in transforming the economic fortunes of its people. 

Africa’s population is on a growth trajectory and is expected to double by 2025.One of the most significant challenges that the continent faces addresses the critical issue of absorbing these large numbers into meaningful income-generating opportunities.  

Currently, the employment gap vis-à-vis the growing employable population is widening. This is in part due to the coronavirus pandemic that created a situation of dwindling demand in labor after lockdowns and travel restrictions. Also, the current education gap creates a lack of access to education as well as skills training among employable youth.  As

A number of African stock exchanges have been hit by an IPO drought in recent years—an indicator of ineffective capital markets. Some exchanges have seen an increase in de-listings.  For instance, Ghana's stock exchange is reported to have been struck by a wave of de-listings. The crux of the matter is, apart from the biggest stock exchanges, African capital markets have not lived up to their potential as investment harnessing hubs.

Stock Exchanges in Africa 

There are currently 29 exchanges in Africa; most of these are affiliated with the African Securities Exchanges Association. Included in the list of exchanges are two regional bourses. The Bourse Régionale des Valeurs Mobilières (BRVM) in Côte d'Ivoire which is an amalgamation of Benin, Burkina Faso, Guinea Bissau, Côte D'Ivoire, Mali, Niger, Senegal, and Togo.   The other is the Bourse Régionale Valeurs Mobilières D'afrique Centrale (BVMAC) which caters to Central African Republic, Chad, Democratic Republic

Fintech has the potential to revolutionize the African financial services landscape. Already mobile payments and microloan technologies are taking root rapidly across the continent.

The success of mobile money provider M-Pesa in many countries such as Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania, and Tanzania among others is an example of the potential of fintech on the continent. 

Read Also: Mobile money making Africa bankable

Financial Inclusion

In Africa access to traditional financial services is limited. Transaction costs with banks are usually very restrictive. This coupled with poor infrastructure, lack of employment and rural environments has created room for fintech innovators in financial services provision.  

62% of the African population remains un/underbanked. Mobile phones are relatively more accessible which has increased the reach of mobile money services. In sub-Saharan Africa mobile money transactions account for 10% of the region's GDP against an average of 2% in other economies; this

READ ALSO: Why the African free trade area could be the game-changer for the continent& economies

Why Are Micro And Small Business A Subject Of Concern?

According to the World Bank, SMEs make up 90% of businesses in the world and cover more than 50% of the world’s employment. Formal small businesses contribute significantly to GDP. This contribution to GDP is significantly amplified when the informal sector is taken