Africa's population is booming – it's time for business to catch up
Kinshasa is predicted to be Africa’s second largest city, growing to 75 million people in the next 50 years. Photograph: Panther Media GmbH/Alamy
By: Barrett Nash and Peter Kariuki, co-founders, CanGo
With a median age of just 19.4, Unicef predicts that by 2050 two in five of the world’s children will be in Africa. By the end of this century, while all other continents will be shrinking or static in population, Africa’s population will have quadrupled to more than 4 billion people.
The question is how to make this demographic change positive for the world and positive for the people of Africa. While there has been extraordinary progress in raising Africans out of poverty and increasing life expectancy, some predictions still forecast from current GDP growth rates that it would take the average African centuries to converge with the level of economic prosperity of the average American. The current pace of increased economic opportunity is not fast enough to offer African children of this or subsequent generations a fair shot in life.
Likewise, the predominant approach to bringing Africa to prosperity – one in which NGOs, foreign aid and national governments are in the driver’s seat – is also inadequate. While these stakeholders are essential to a prosperous Africa, they alone are insufficient. No country has ever become rich through aid and, while national governments need to act in their people’s best interest, they are not wealth creators.
CanGo bundles Uber-style motorcycle taxi services with supermarket and food delivery Photograph: Cango
The solution instead is to normalise Africa so that it creates wealth the same way wealthy nations create wealth: by allowing capitalism, innovation and entrepreneurship to be the driving force for the creation of new wealth. Yes, making wealth in Africa is a challenge. The middle class in Africa is nascent. Infrastructure is inadequate. Trying to comprehend government bureaucracy would make Kafka roll his eyes. But challenge is what entrepreneurs and animal spirits thrive on. In fact, for an entrepreneur, making a business is easy if there is challenge: one just solves the challenge and sells the solution.
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Thankfully, Africa is full of such entrepreneurial challenge-seekers and there are already plenty of exemplary companies showing the green shoots of a wealth-creating Africa. A key feature that unites Africa’s most exciting companies is not, as in the west, selling products to the middle class, but rather bringing value-added products and services to the bottom of the economic pyramid. Our company CanGo, a super-app that bundles Uber-style motorcycle taxi services with supermarket and food delivery, is the first mover in Kinshasa, the world’s future largest city, and in central Africa, a region of 160 million people. In a city where 80% of transportation happens on foot and the city buses are nicknamed “the Spirit of Death”, CanGo allows families to order affordable cassava flour in bulk, links previously unlinked parts of the city together and provides safe options for vulnerable parts of the population to get from A to B.
We see the future of business in the region as one of truly shared economic opportunity: a model that brings much-needed value to an ever-growing base of customers and profits in return. More companies should take note of the burgeoning opportunity in Africa, more entrepreneurs should see the continent as a route to their ambitions, more venture capitalists should diversify their portfolio with an Africa strategy. We personally believe the first company to at scale understand how to allow Africans to make money from their smartphone will be Africa’s first $100bn valued company. (And we challenge any readers to try.)
If a business or an entrepreneur were to look at a longer horizon of where their economic interests rest, Africa should seem like a fantastic opportunity: growing markets with low competition that are underserved in almost every services category. Any company that aspires to prosper for decades should have Africa as a part of its equation. The upshot is a self-fulfilling prophecy in which making forward-looking investments now enables a bright and prosperous future.