Five Tech Megatrends that can Transform African economies in 2021 and beyond

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The world has been experiencing massive digital disruption with the relentless rollout and adoption of disruptive and innovative technologies. Embracing digital disruption is daunting, since it is extremely unsettling with the rapid change brought about within societies and the severe impact on unskilled labor. Even if the African continent will not be spared by digital disruption, Africa cannot afford to be left out of these global technology (Tech) trends. If technology is wisely implemented, developing African countries are able to hop on the digital bandwagon to rapidly undergo a digital revolution that can boost their respective economies.

While disruptive technologies like artificial intelligence, additive manufacturing, augmented and virtual reality, and others are becoming more and more relevant for developed economies with a highly skilled workforce, there are many technology applications, that are still relevant in the African context. These technologies are able to not only create new jobs for Africans, but also build new economic foundations for African countries. Below are five tech megatrends that can transform African economies in 2021 and beyond.

First, clean technology (CleanTech), especially in the energy sector, is relevant for Africa. With the global climate change impetus to move away from the traditional fossil fuel-based economies, green energy, like biomass, hydro, solar and wind, can power African economies as well as provide them opportunities to transition away from fossil fuels. This will also put African countries in a better position to adapt to climate change in a post-oil era.

Moreover, cleantech will put environmental sustainability at the forefront of the African development with the creation of new jobs in the renewable energy sector and others like environment and water management as well as recycling and waste management. Cleantech will spur a whole new thinking about the sustainable economic development models that Africa can adopt in the future. This will transform industries into green finance, green transportation and others. With cleantech and sustainability in mind, African countries should be able to embrace new approaches to urban planning and management, so as to build future sustainable cities.

Second, access to education is crucial for a skilled workforce and educational technology (EdTech) can boost access to knowledge for everybody. While edtech is mainly about educating children and young adults, virtual vocational training for adult workers provide them opportunities to move into higher paying jobs. Continuous learning via edtech for educators and everyone bring about new skills and knowledge.

With the coronavirus pandemic and closure of schools in many African countries at the moment, the availability of edtech has become a matter of urgency and importance. Unfortunately, the coronavirus pandemic is not going to end anytime soon. Hence, to avoid having a lost generation who is illiterate, edtech is the solution to widen access to education and knowledge so that Africans are better equipped to evolve in the new digital economy.

Third, the poor public healthcare infrastructure in Africa has been a major weakness in fighting the coronavirus; hence the availability of healthcare technology (HealthTech) and medical technology (MedTech) can act as potential bulwarks against the spread of the virus. While healthtech focuses on preventive care and the overall health of the individual, medtech is about medical devices and technologies that diagnose and treat illnesses.

In the coronavirus context, not only healthtech collect and analyse big data in a central repository to provide greater visibility about the viral spread, but it also enables African governments to make better decisions in dispensing limited healthcare resources to affected regions. Medtech like telemedicine provide expert advice from medical specialists to healthcare workers in remote regions. Overall, healthtech and medtech can provide basic healthcare and medical services in a cost-effective manner to a wider segment of the population without the need for them to physically travel far to the nearest hospital.

Fourth, digital commerce and marketplace provide incentives for Africans to trade more among themselves and globally. More than just creating a website and doing e-commerce, digital commerce is about the whole ecosystem surrounding the buying and selling of goods and services online as well as offline. Digital commerce can provide not only greater visibility of what goods and services are available, but also greater transparency in terms of competitiveness, demand and pricing.

In addition, digital commerce greatly amplifies the reach of both buyers and sellers. While small African traders mainly work locally or regionally, digital commerce provide tremendous opportunities for cross-border trade; thereby increasing the intra-African trade, especially with the African Continental Free Trade Agreement (AfCFTA). With increasing trade and connectivity, digital commerce will spur the growth of potential product manufacturing to cater for local and regional demand. Besides, it provides a conducive environment for the rapid growth of new digital services like financial technologies (FinTech), digital finance, digital payment systems, digital marketing, digital supply chain and many others. As a result, all these activities will boost the overall African digital economy.

Last by not least, food security has always been a major issue in Africa, especially with a growing population and poor agricultural productivity. Innovative agricultural technologies (AgriTech) have the potential to not only address the problems of food security in Africa, but also attract and create new jobs for young Africans. Many of the world megacities are found in Africa and feeding the population within these megacities will always be a challenge. Some solutions are already within reach. For instance, agritech in urban vertical farming and aquaculture has the potential to cater to some of the needs for fresh produce in these megacities.

In addition, big data analytics from a wide variety of agritech devices and sensors – from weather patterns and pest control, to soil agronomy, to plant growth and livestock health – is extremely useful to agri-related stakeholders like governments to provide farm subsidies, agriculture financiers and insurers and even the African farmers to increase their own farm productivity. Consequently, many new digital services around the agritech sector can be designed and conceived.

Digital disruption is here to stay. Left to its own devices, technology is very disruptive. However, if African countries are able to harness the power of technology, they will embark on a digital revolution, boosting their respective economies now and in the future.

Author: Richard Li
Richard Li is a Partner with STEEL Advisory Partners, a management consulting firm that serves clients across industries. Having spent his working career in strategy consulting, he worked with various global clients and covers themes such as Corporate Strategy, Transformation, Digital Innovation and Risk Management. He is an avid observer of World Affairs and Emerging Markets, particularly the African continent.