According to the 2019 Digital Economy Report (PDF) by the United Nations Conference on Trade and Development (UNCTAD), four countries — Nigeria, Egypt, South Africa, and Kenya — accounted for 60% of digital entrepreneurial activities in Africa.
Ghana, Morocco, Senegal, Tunisia, Uganda, and Tanzania made up 20%, while the remaining 44 African countries contributed a combined 20%.
In cities like Lagos, Accra, CapeTown, and Nairobi, digital entrepreneurship began way earlier than in other African cities, and as a result, they lay claim to more diverse digital enterprises.
UNCTAD based the report on data from statistical bodies of various countries and annual survey questionnaires on the ICT sector and ICT usage sent to UN member states.
The report listed the bottlenecks of digital entrepreneurship on the continent to include limited entrepreneurial knowledge, lack of a highly skilled workforce — developers, designers, and data scientists — and limited access to finance.
Also, the existing culture in the African market relies heavily on tangibility, and as a result, digital platforms in Africa have to invest more in physical assets than their foreign counterparts.
In light of this, digital entrepreneurs in developing countries are unable to compete with global giants in markets they already dominate. In some cases, very successful ones are often acquired — case in point is the acquisition of ROK Studios by Canal+.
Though they rarely operate outside their home cities, African digital enterprises are able to leverage the digital space and a sizable African market to become giants without serving other markets.
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New Report: Nigerian startups raised $24.7 million in Q2 2019, 40% higher than Q1. Find out more in the latest quarterly edition of the Nigerian Startup Funding Report here.