The African internet economy could see massive expansion in the near future, with its contribution to the continent’s gross domestic product (GDP) surpassing $700 billion in three decades.
According to a recent e-Conomy Africa 2020 report, released by Google and the International Finance Corporation (IFC), the potential of the African internet economy, which includes such sectors as e-commerce, e-logistics, edtech, entertainment, fintech, and healthtech among others, “is one of the largest overlooked investment opportunities of the past decade.”
The analysis shows that the sector may reach $180 billion by 2025 and account for 5.2 percent of the continent’s GDP compared to around $115 billion and 4.5 percent expected this year. By 2050, the projected potential contribution could reach $712 billion, equivalent to 8.5 percent of the continent’s GDP.
This means Africa’s digital economy, driven by growing access to faster and better quality internet connectivity, a rapidly expanding urban population and digital startup ecosystem as well a growing tech talent pool, will expand by more than sixfold in 30 years. It will also be nearly 25 times bigger than it was in 2012, when it was estimated at roughly $30 billion.
The coronavirus pandemic is not expected to affect the development of the sector as so far the African internet economy has proven broadly resilient, the report stated. It noted, however, that the continent’s digital economy will be transformed in the aftermath of the Covid-19 outbreak, but “exactly what this transformation will look like remains to be seen.”
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