As many industries go online or adapt to new technology, the race is on to become the world’s new tech hub. Could Africa win this race and, if so, what are the key industries where the continent could stand out against the competition?
Online casinos are growing in popularity
The casino industry has undergone one of the most significant transformations this century, as new online casinos have appeared all over the world. For the moment, many of the casinos that operate here are based offshore and work under licences from other parts of the world, such as the UK and Curacao. However, moves such as South Africa’s issuing of new legislation to cover the licenses for new gambling sites could help to move the industry forward.
In terms of opening new sites, operators tend to use casino software to immediately gain access to thousands of games in one place. This gives them the opportunity to create a customised site with a game lobby where they pin their favorite games, together with all of the tools needed to run a successful casino. In this way, they can quickly launch their site in the relevant countries and then market it.
Africa may lead the way in fintech
The fast-growing fintech industry is currently one of the world’s key industries, and there are signs that Africa could soon be leading the way in it. Indeed, the figures from 2021 show that 63% of all tech funding was in the fintech sector and that Africa is a major player right now. Part of the reason for this could be that it fills a gap in the market that exists here, helping the unbanked to open accounts and making it easier to send money abroad.
Figures from 2022 show the best-funded fintech companies on the continent include OPay ($570 million), Interswitch ($321 million) and Wave ($290 million). In 2020 and 2021, the rate of new tech start-ups being created in Africa tripled until it reached over 5 000 a year.
A report by McKinsey suggests the financial services market on the continent could have an annual growth rate of 10%, taking it up to a revenue level of $230 billion by 2025, with $80 billion of that coming from South Africa.
Crypto-currencies may continue to flourish
Although there is potentially some crossover with the fintech sector, the crypto-currency industry is now big enough to warrant its own section. Interestingly, Africa is classed as the smallest but fastest-growing crypto market in the world, with the highest figure for transactions coming in 2021 when $20 billion was bought and sold.
The emergence of new legislation in this area could prove to be the key factor that determines whether crypto-currency companies can flourish. In Sub-Saharan Africa, only a few countries regulate digital tokens, including South Africa, and some have completely banned their use. Their usefulness in helping Africans to send money and invest means this sector could be hugely influential if given the chance, while the potential introduction of central bank digital currencies could be crucial too.
These are three of the technology sectors that could prove to be among the most important for Africa in the next few years, but it’s worth keeping an eye on other industries, such as gaming, telecommunications and agritech.