Africa has long been the poorest continent in the world. Its economy is smaller than the economy of India and it has fewer US-dollar millionaires than Hong Kong, a city with 0.5% of its population.
There are more discomforting indices that are beyond the scope of this piece, writes Chinedu George Nnawetanmam a development professional with over a decade of experience in designing and delivering social innovation programmes and projects, who currently leads strategic partnerships at Nigeria’s Sterling Bank.
Though gradual progress has been made across sectors like healthcare and banking in recent years, the reality remains that the continent is still far off from where it needs to be. Africa needs exponential growth and fast-tracked development, not gradual progress. It must grow at a faster pace than the rest of the world to be able to catch up.
According to the United Nations, Africa’s economy is forecasted to grow by 3.7% and 4% in 2025 and 2026 respectively. These figures fall short of the average annual growth rate of 9% witnessed in China since its economic liberalization in 1978, which has transformed it into the world’s second largest economy and lifted more than 800 million people out of poverty. It is also well below the projected 6.5% average annual growth rate that will propel India to become the world’s third largest economy by 2030.
For Africa’s narrative of underdevelopment to change, it must implement drastic measures that will affect all facets of its economic, social, and political landscapes. Critical small wins like sinking a water borehole and mounting street lights in a rural African community should be complemented by giant leaps that will fundamentally transform the continent. And this can only be achieved through technological and social innovation.
Innovation has always been a key driver of development around the world. From the invention of the steam engine that gave rise to the industrial revolution to advances in electronics and manufacturing that helped countries like Japan, South Korea, and Singapore achieve accelerated economic growth, innovation has strongly and positively correlated with human progress.
Today, innovation continues to advance rapidly. Technologies like artificial intelligence are transforming the way that businesses, economies, and societies operate, creating unprecedented opportunities for those who key in. A comparison of the economic performance of the United States of America and the European Union over the past few years clearly shows how investments in innovation can make a huge difference, even in economies that are already significantly developed.
A few years ago, the world’s two most advanced economies were essentially at par. The US had a GDP of $14.4 trillion and the EU had a GDP of $14.7 trillion in 2009, albeit with the United Kingdom still in the union. Fast-forward to 2025, the IMF forecasts that the size of the US economy will be well over $30 trillion by the end of the year while that of the EU will hover around $19 trillion. Even if the British economy is hypothetically reintroduced, the US economy will still be about 30% larger than the EU economy.
Beyond just the GDP, many other metrics used to measure economic performance, like the market capitalization of leading companies and unemployment rate, point in favour of the United States. America’s widening economic dominance over the EU – despite the EU’s larger population and numerical advantage – boils down to higher labour productivity, which in turn is largely a result of higher levels of innovation. The United States is simply doing more with less thanks to innovation. America significantly outspends the EU in research and development (R&D), leading to more technological breakthroughs and the early adoption of new technologies by US firms.
In 2022, investment in new technologies and R&D spending made up about 5% and 3.5% of GDP in the US, respectively, compared to about 2.8% and 2.3% in the eurozone, respectively. The depth and sophistication of America’s tech startup ecosystem is unmatched and it is backed by the biggest venture capital scene in the world. This steady flow of capital encourages risk-taking and experimentation with novel technologies, and this has made the US the global hub of many groundbreaking innovations like generative AI.
While Africa clearly does not currently have the skills and financial resources needed to embark on large-scale experimental tech projects, it can be a great adapter like China and India. China is well-known for using and modifying foreign innovations to meet its unique needs and become a global tech competitor.
India has also developed one of the most effective, practical-oriented STEM education systems in the world. Emphasis is placed on mastering existing technologies and using this knowledge to create solutions for the local market and export IT services and talent to the rest of the world. It is no coincidence that the CEOs of some of the leading tech companies in the world like Alphabet (Google), Microsoft, Adobe, IBM, and Palo Alto Networks are from India.
Seeing that Africa shares similarities with China and India that cannot be overemphasized, it follows that the continent can draw valuable lessons from their approach to innovation. Africa’s innovation model in the interim should revolve around leveraging available technologies to develop leapfrog innovation solutions that will address the continent’s immediate social and economic challenges.
Mobile banking is a good example of this. It has enabled the seamless flow of capital across the continent and bridged the financial inclusion gap, all with the simplicity of an inexpensive handheld device. Education technology is another remarkable example that is gradually gaining traction.
Other tech-driven solutions that will democratize access to essential services are worth exploring and so are technologies that will allow African countries to move up the value chain and shift from primary sector dependence to more diversified economies.
For Africa to build up the right capacity to develop and deploy leapfrog technological solutions that are affordable, convenient, and accessible, it has to lay the necessary groundwork. A key strategy would be educating and upskilling the present and future workforce in STEM fields.
Students should be introduced to basic coding and other foundational tech skills as early as the primary school. Young professionals and recent graduates can be enrolled into digital literacy programs. It is crucial that emphasis is placed on impact rather than quantity.
STEM education and digital literacy initiatives on the continent often get caught in the pitfall of focusing on enrollment numbers rather than demonstrable skills. Policymakers and implementers must shift from familiar sound bites like “100,000 youths trained” and “1 million women empowered” to measuring actual proficiency and ensuring that the skills acquired are practically applied to drive tech and social innovation.
Most times, knowledge and skills alone are not enough, especially in a continent like Africa where 35% of the population lives below the poverty line. Knowledge and skills have to be paired with capital to achieve the desired results. Governments, private organizations, and individuals can help Africa’s tech talent to leverage their skills to build products and services by providing seed funding.
Simultaneously, supportive infrastructure will improve the likelihood of their solutions succeeding. When companies do not have to worry about generating their own power or tarring the access roads to their offices, their operating costs will come down. This will encourage the growth of local startups, attract global tech firms, and boost the innovation ecosystem.
