African tech investments must shift beyond software to target local hardware manufacturing and reliance on imported equipment, says Nicholas Williams, information, communications and technology operations division manager at African Development Bank Group (AfDB).
While expanding fibre optic networks and financing digital start-ups remain critical pillars, Williams says more needs to be done to address local physical production.
Funding breakdown shows digital entrepreneurship and skills represent the largest share of the AfDB tech portfolio at 47%, connectivity and data infrastructure account for 23%, tech hubs make up 18%, and digital policy and regulation sit at 12%.
The continent cannot fully unlock its tech potential if it remains solely a consumer of foreign-made technology.
While Asia currently leads in production, there is significant room for regional collaborations that will enable more investment in hardware manufacturing within Africa, says Williams.
Mainland China and Hong Kong have long anchored Africa's supply of telecommunications equipment. In 2025, African telecom imports reached $12.2 billion, with Hong Kong telecom exports to Africa accounting for $3.01 billion—25% of total telecom imports.
"We know more needs to be done to encourage actual technology production on the continent. Asia currently leads in production, but we see potential for partnerships that will allow more investment in production in Africa,” Williams says.
While the AfDB continues to back software and entrepreneurial ecosystems—most notably through its $618 million Investment in Digital and Creative Enterprises project in Nigeria—the institution is now advocating for physical supply chain development.
To model this shift, the AfDB points to Ethiopia, where a growing domestic device manufacturing and assembly ecosystem demonstrates how strategic partnerships and industrial policy can build local hardware capacity.
"Ethiopia provides an example of this, where there is a growing device manufacturing base," Williams says.
Nations across the continent are scaling up local assembly to hedge against global supply volatility.
In Kenya, the East Africa Device Assembly facility has scaled production, with a capacity to build between 1.2 million and 3 million low-cost 4G smartphones annually.
Meanwhile, Egypt is leveraging tax incentives, customs exemptions, and dedicated state electronics funds to establish itself as a regional hub for mobile production.
Continent-wide, building a competitive tech manufacturing sector requires capital, specialised skill sets, and institutional de-risking.
The AfDB strategy centres on creating enabling environments and structuring international partnerships to attract production capital.
“We look to provide additionality as a financier, using our tools not only to invest in but also to de-risk projects, bringing over 60 years of institutional knowledge to bear,” says Williams.
He emphasises that African nations do not need to build every segment of their digital economy in isolation. Regional public goods—such as shared digital infrastructure and cross-border trade framework policies—allow nations to specialise and scale production capabilities for broader regional markets.
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