Foreign Direct Investment (FDI) and improved internet connectivity is helping Africa attract funding and a large percentage of business leaders on the continent say its tech start-up ecosystem will attract over US$10-billion in funding by 2025.

This is according to market research conducted by blockchain-based MNO World Mobile, which showed that 54% of African senior executives expect this level of spending on tech start-ups.

The research was conducted among senior executives at companies with average annual revenues of US$70-million based in Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, South Africa and Tanzania.

This compared with the US$4.9-billion raised last year, the company stated, and around one in six (16%) believe more than US$15-billion will be raised.

World Mobile added that based on its research, around three-quarters (75%) believe the investment will come from Western countries, while 66% believe China will be a major source of investment. Nearly six out of 10 (57%) believe dramatic improvements in internet connectivity will be the main support for expansion as it drives education, healthcare, and business.

The research also found nearly half (45%) believe Africa will be a tech superpower within ten years.

They point to the development of Africa’s tech ecosystem - nearly 90% of those interviewed expect it to grow by at least half its current size in the next three years with 15% expecting it to double in size during that period.

“That in turn will expand Africa’s role in supplying technology to the rest of the world - around 60% of executives expect that to grow in the next five years with one in 10 predicting dramatic expansion,” World Mobile added.

Micky Watkins, CEO of World Mobile.

Micky Watkins, CEO of World Mobile said: “Africa is seen as ripe for economic expansion by its own business leaders and technology will play a vital role in delivering the development.

“The potential is huge as currently Africa only accounts for 0.2% of the global money invested in technology start-ups so there is capacity for growth and huge interest from Western and Chinese foreign direct investment.

“Much of it hinges however on improving internet connectivity and particularly in areas which are hard to reach and ignored by traditional companies. We are committed to playing our part in supporting the development of technology businesses throughout the continent.”

Limited infrastructure

Africa’s tech progress is impacted by limited infrastructure, a concern shared by two out of three (65%) of African business leaders, according to World Mobile.

Additional research by the company showed that business leaders worry that a lack of infrastructure is stopping traditional telecommunication companies from delivering the internet connectivity the continent needs.

Watkins told ITWeb Africa: “… the research with business leaders detects some scepticism with more than a quarter of senior executives saying they expect no change in connectivity over the next five years and pointing to potential roadblocks such as bureaucracy and a lack of innovation. Improving internet connectivity is vital to delivering the potential of Africa, which is not just good for global economic growth but also for improving living standards across the continent and we are focused on playing our part in supporting innovation.”