Africa’s internet economy projected to grow to $180bn by 2025

Africa's internet economy is projected to see significant growth in the coming years, with estimates suggesting it could reach $180 billion by 2025. Google and the International Finance Corporation (IFC) have released a report highlighting the potential of the continent's internet economy, which could contribute nearly 5.2% to the overall GDP. This growth is being driven by a thriving start-up ecosystem and Africa's commitment to the Africa Continental Free Trade Area. To discuss the findings of the report, CNBC Africa spoke with Nitin Gajria, Director at Google Africa. Gajria shared insights from the report, emphasizing the exponential growth expected in the internet economy. Currently valued at $115 billion, the forecast predicts a surge to $180 billion by 2025, translating to 5% of the continent's GDP. Looking ahead to 2050, the estimate is a staggering $712 billion, underscoring the immense potential for expansion in the digital landscape. One key aspect outlined in the report is the developer ecosystem in Africa. With around 700,000 active professional developers across the continent, there is significant room for growth and enhancement. Gajria noted that while countries like South Africa have a comparable proportion of developers to the United States at 1%, other regions like Nigeria exhibit lower rates, indicating untapped potential for developing a robust developer community. In terms of funding and regulatory environments, Gajria highlighted the progress seen in venture capital inflows, with $2 billion raised in 2019. However, challenges persist, particularly in early-stage funding, requiring collaboration between government and the private sector to create a conducive investment environment. The implementation of the Africa Continental Free Trade Area offers an opportunity to harmonize digital policies and attract more investors, fostering innovation and growth. The growth of various sectors within the internet economy was also discussed, with FinTech experiencing significant momentum and considerable venture capital investment. E-commerce is poised for expansion, especially given the current global shift towards digital platforms amid the COVID-19 pandemic. This momentum in e-commerce is expected to cascade into related industries such as logistics, driving further growth and innovation. Addressing concerns about skills development, Gajria pointed to the growing number of developers in Africa and the continent's youthful population as positive indicators. With a median age of 19, there is a large demographic eager to engage with technology, signaling a pool of potential talent. However, efforts are needed to scale up skill development initiatives to meet the demands of the evolving digital economy. In conclusion, Africa's internet economy holds immense promise for substantial growth by 2025 and beyond. With the right strategies in place to address funding, regulatory, and skills challenges, the continent is well-positioned to harness the full potential of its digital landscape. The report from Google and the IFC serves as a roadmap for stakeholders to leverage the opportunities presented by the burgeoning internet economy in Africa.