On yesterday’s episode of “being up for the Africa race”, it was an American tech multinational with plenty of wins to its name pledging to spend a 0.1 percent equivalent of its entire net worth on fueling the work it has started in the world’s largest unconnected populace in the next half-a-decade.
Google, the internet giant that is one of the few trillion-dollar firms in the Silicon Valley wetland, has put aside USD 1 Bn to further the cause that is closing the longstanding digital divide that has been in the way of Africa’s overall economic transformation.
To connect the over 1.3 billion people living in this continent, the American company will prioritize the provision of cheaper and faster internet connectivity while keeping an eye on investment opportunities into the startups existing to aid said transformation.
USD 1 Bn more or less stands as the largest-ever of its kind towards Africa and doesn’t seem to take into account how much Google has spent—on setting up an AI shop in Accra, providing internet access in Lagos and Abuja via Station, and creating tools to address the region’s ever-growing digital needs among many other high-profile commitments—ever since it made inroads into the continent.
Basically, the internet bigwig isn’t trying to “set up shop”—because it long has—but simply expanding its footprints in the continent. Google isn’t new to investing in Africa, but the latest endeavor announced on the sidelines of its virtual Google for Africa event does come off as a benchmark breaker. Other United States tech giants have courted Africa, but mostly by establishing tech hubs, building teams, and keeping up the social work.
But why is Google taking Africa more seriously now than ever? The billion-dollar involvement comes at a time when many believe Africa is at the cusp of its digitization. The tech infrastructure needed to pull the continent fully into an electronic era is what Google is trying to build—by connecting subsea cables Facebook-style—and support—by backing the African startups doing the most to enable the region to leave its analog days behind.
Nitin Gajria, Managing Director of Google for Africa told Reuters that the company is currently building an undersea cable system to connect the continent with its European neighbors by the second half of 2022. This, expectedly, will increase internet speeds fivefold and make internet accessibility about 21 percent cheaper in countries like Nigeria and South Africa—uncoincidentally the two biggest economies in the continent.
According to a 2020 IFC report, the internet economy in Africa will reach a projected value of USD 180 Bn (equivalent to 5.2 percent of the continent’s cumulative GDP) in 2025, a figure that is exactly 180 times bigger than the USD 1 Bn Google has pledged. Indeed, no less than 300 million people in Africa are said to be coming online over the next five years, the majority of whom would be young, entrepreneurial, creative, and tech-savvy.
According to the IFC report, tech startups are helping to drive the continent’s internet economy, making references to companies like Stripe-acquired Paystack, genomic firm 54gene, and Visa-backed fintech unicorn Interswitch.
No wonder Google is taking out USD 50 Mn for a VC vehicle called the Africa Investment Fund, which will see the company take equity in high-growth companies looking for capital. That adds to the giant’s already existing Google for Startups Accelerator Africa and the recently launched USD 3 Mn Black Founders Fund.
Google, like Facebook, Microsoft, and their tech fellows, can be said to be finally taking Africa seriously. Why? At the very least, it is projected that by 2030, there will be no less than 230 million jobs available in the region, all of which would require a substantial level of digital capabilities.
More so, come 2100, one in every three people in the world would be living in Africa, according to World Bank estimates. It makes sense to plan the tech infrastructure needed to keep these approaching numbers more connected than the present ones are.
Today, many of the world’s top tech companies now have offices in Africa, and will seemingly do anything to stay put in an ecosystem whose growth signs are now more evident than ever. This, combined with the numerousness of other development prospects, is forming the soil upon which the heavily-anticipated “Silicon Savannah” can be properly established.
Image Courtesy: FT