Watch the Next Big Frontier: Africa
It is one of the worlds biggest and fastest growing populations and a massive free trade zone.
Add to that a young population with an average age of 19 and in the world where youth drive innovation this is critically important. They will also make more money as they enter the workforce. Sixty percent of Africa’s 1.25 B people are under the age of 25. That is a massive 750 million people.
This young population is going to be the biggest workforce in the world in a few decades. And it’s growing fast.
“More than half of global population growth between now and 2050 is expected to occur in Africa. Africa has the highest rate of population growth among major areas. The population of sub-Saharan Africa is projected to double by 2050. A rapid population increase in Africa is anticipated even if there is a substantial reduction of fertility levels in the near future.”
With the growing trend here in massive urbanization, deep familiarization with smartphones and mobile payments as they have had Mpesa for over 13 years now, they have skipped legacy systems like landlines. So Mobile first is the default with Mpesa on payments and the now emerging Chipper Cash. (full disclosure this is a portfolio company). I expect that due to lack of infrastructure they will continue to skip technology queues. There is a real opportunity for technology leapfrogging effect here. Similar to what occurred in China with the rise of advanced consumer applications like Wechat/Wepay and the corresponding ecosystem that grew around it.
One other interesting factor is the various countries’ experience with inflation and currency mismanagement. The most gross example being Zimbabwe. In regimes of massive inflation, locals quickly get the importance of Cryptocurrencies for example. Similar to how Argentineans, Greeks, Cypriots or Venezuelans were the first to fully understand the use case of Bitcoin because of their own painful experiences at home. They were the first to fully adopt it and use versus people in the so-called Developing markets where our financial systems work well enough (for now).
All of these factors from a macro trend level, add up to one of the most interesting business opportunities ahead of us. I’ll be paying very close attention to the growing tech ecosystem. And personally, there is a good chance I’ll be focusing much of my own attention in ten years’ time after Central-Eastern Europe (2021–2025) and Latin America (2025–2030). Stay tuned here.
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