Africa, with a population of over 1.4 billion people, has some of the world’s fastest-growing economies. Despite its rapid growth, the continent has struggled for decades with high unemployment rates. According to the World Bank report, the sub-Saharan African unemployment rate is 7.9%, with some countries reporting rates as high as 30%. This situation is not only concerning for policymakers, but it also poses a challenge for the continent’s tech startups. These startups, on the other hand, are tackling the issue of unemployment head-on, employing technology to create jobs and alleviate poverty.
African tech startups have played a critical role in creating jobs for the continent’s army of unemployed youths over the years. The numbers have been very impressive across the big four tech startup ecosystems, with the Nigerian tech startup sector reported to have employed over 19,344 people as of August 2022, with fintech producing the top three startups in terms of employment -Renmoney 892, Cowrywise 570, and Flutterwave 541 – according to a Disrupt Africa report.
Also, in Kenya, 11,462 people are employed by tech startups, and in South Africa, tech startups employed about 11,340, while the over 562 tech startups operating across Egypt as of September 2021, employing almost 13,000 people between them according to Disrupt Africa’s Startup Ecosystem Report 2021.
Furthermore, according to Disrupt Africa’s eighth edition of the annual African Tech Startups Funding Report, the number of jobs created by funded African tech startups nearly doubled in 2022, with the 633 African tech startups funded in 2022 employing 34,201 people at the time of their first raise of the year, or an average of 54 per startup. In 2021, the 564 African tech startups funded employed a total of 17,915 people, an average of 32 per startup.
Egypt was the largest employer, with 131 funded startups employing a total of 11,153 people. Kenya came in second, with 91 startups employing people, and Nigeria, which had the most funded startups (180), came in third, with 6,751 jobs created. South Africa (2,691), Tunisia (993), Ghana (872), and Morocco trailed behind (261).
Ways Tech Startups are Tackling Unemployment across Africa
One way that tech startups are addressing unemployment in Africa is by developing online job platforms. These platforms connect job seekers with opportunities in a variety of industries. Jobberman, BrighterMonday, and MyJobMag are some of the most popular job platforms in Africa. These platforms have transformed the job search process, making it easier for job seekers to find positions that match their skills and experience. Furthermore, these platforms have enabled employers to quickly and efficiently find and hire top talent.
Another way that African tech startups are addressing unemployment is by developing training and skill development programs. These programs are intended to provide job seekers with the necessary skills to succeed in the job market. Andela, a Nigerian tech startup, for example, runs a training program that teaches software development to young Africans. The program not only provides participants with valuable technical skills, but it also assists them in obtaining employment in the technology industry.
Moringa School, also based in Kenya, offers training in software engineering, data science, and other technology-related fields. The school has assisted many young Africans in acquiring the skills required to succeed in the tech industry and secure well-paying jobs.
In addition to job platforms and training programs, African tech startups are tackling unemployment by creating new job opportunities in emerging industries. E-commerce platforms such as Jumia and Konga, for example, have created thousands of jobs in the logistics and delivery sectors. These startups have not only created jobs but have also made it possible for small businesses to reach a wider audience and increase their sales.
African Fintech Startups Proving Employment
Similarly, fintech startups such as Flutterwave and Paystack have created jobs in the financial services industry. These startups have transformed the way Africans transact, making payments and accessing financial services easier and faster. As a result, these startups have created thousands of job opportunities in the financial services sector.
Finally, tech startups in Africa are also tackling unemployment by creating opportunities for entrepreneurs. Many startups provide mentorship and funding programs to assist entrepreneurs in bringing their ideas to fruition. Seedstars, a Swiss-based startup accelerator, for example, provides funding and support to African startups. The program has assisted many entrepreneurs in launching successful businesses, thereby creating jobs and stimulating economic growth.
Conclusively, African tech startups are making significant strides in combating the issue of unemployment. In addition to direct job creation, the sector is developing online job platforms, training programs, and new job opportunities in emerging industries. Thousands of young people across the continent are given hope and opportunities thanks to these startups. Furthermore, by assisting entrepreneurs and small businesses, these startups are fostering a thriving startup ecosystem in Africa, which is driving economic growth and job creation. While the African unemployment problem is complex and multifaceted, it is clear that technology and innovation play a critical role in addressing it.