It is projected that 1.3 billion people will be living in Africa’s cities by 2050, an increase of almost 1 billion from today, and largely driven by young people migrating to urban centres in search of work. As the continent’s urban population grows, cities will need to adapt by nurturing new economic ecosystems to create jobs, while managing the environmental, social and political pressures that urbanization brings.
The evolution of Africa’s cities is critical for meeting the demands of its youth population and must be co-created with them. Africa’s young innovators are already proving to be an asset in shaping the future of African cities and, if they are allowed to flourish, they could be at the forefront of finding much-needed solutions to the continent’s vast urban challenges.
Growing tech hubs
African countries are increasingly benefitting from growth in technology ecosystems, which are often clustered within cities. There are currently more than 600 tech hubs helping to incubate innovative solutions across cities in Africa. Between 2015 and 2020, the number of start-ups receiving funding grew six times faster than the global average. In 2021 alone, start-ups raised over $4billion in funding – twice as much as in 2020.
But significant challenges remain. While the number of new start-ups is an encouraging indication of the entrepreneurialism and creativity of Africa’s youth, job creation on the level required will demand that they grow and scale up to generate more and higher quality jobs. Research on scaling up in Africa is sparse but research by Endeavor suggests that in Nairobi – one of Africa’s top tech ecosystems – only 5 per cent of companies are able to sustain growth of 20 per cent or more each year, yet they created 72 per cent of new jobs in the previous three years. For Africa to fully harness the potential of digital innovation, making cities the best place for young people to launch ideas and grow them into thriving businesses must become a priority policy for African governments.
Barriers to scale
On the most basic level, business growth needs access to the services that make cities more liveable and help both urban residents and firms become more productive, such as healthcare, transport, water and sanitation. African cities already struggle to provide their residents – in particular the poorest and most vulnerable – with equitable, reliable, affordable and quality access to these services, in a sustainable manner. And these challenges will only get more acute as urban populations rise rapidly, often without any kind of integrated planning.
For example, an estimated 70-80 per cent of municipal solid waste in Africa is recyclable, yet only about 4 per cent is currently recycled, with more than 90 per cent of waste ending up in uncontrolled dumpsites and landfills. As Africa’s urban population grows, these conditions are likely to worsen – unless there is urgent action. New technology has the potential to help by creating a positive feedback loop between innovation, service delivery and growth. For example, to bridge the waste management gap, innovators are exploring various tech-enabled circular economy models. These solutions are often ground-breaking and have the potential to leapfrog traditional waste management infrastructure. Crucially, they are also formalizing a largely informal sector and creating new jobs.
Across the continent, start-ups like Kaltani, Mr Green Africa and Freetown Waste Transformers build processing facilities to turn waste into energy or reusable products, such as construction materials. Others, like Scrapays, Regenize and Soso Care, are helping households and businesses sell off their recycled materials for cash and virtual currencies or exchange them for critical services, such as micro health insurance premiums. Such start-ups help empower informal waste pickers or agents with tech-enabled tools and target low-income urban communities that would not normally prioritize recycling.
Help or hindrance from the top?
But Africa’s young people cannot do this alone – government decision-makers must become catalysts for entrepreneurial leadership. This requires nurturing a mindset that sees young innovators as Africa’s biggest resource, not a threat. While the importance of young people to Africa’s development is acknowledged in various high-level regional treaties, patterns of inhibition and outright hostility from political ‘elites’ suggest that the disruptive nature of technology start-ups and their access to significant capital through venture capital funding models – unlike existing rent-seeking business models with government control – threatens the political establishment.
The growing use of tech solutions also leads to increased transparency and efficiency of service delivery, which in turn leads to increased demand for government accountability and pressure to adopt more liberal policies. Until there is a shift towards catalysing entrepreneurial leadership, there is a stronger incentive for political elites to leverage their powers to co-opt successful technology businesses, or otherwise try to control them for political gain, than let them flourish. This shift in mindset will be critical to unlocking the full potential of Africa’s young innovators.