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Nearly 70% forecast the value of start-ups in Africa will more than double in five years
However, cumbersome regulations and internet connectivity to address the digital skills gap could hold back expansion
African business leaders are predicting a boom in start-up businesses across the continent as the number of working age people launching new firms expands, new research for blockchain-based mobile network operator World Mobile shows.
Start-ups across the continent are currently valued at around $7.6 billion – around 0.2% of the total $3.8 trillion value of start-ups globally – but nearly seven out of 10 (69%) of senior African business executives believe that will more than double in the next five years.
The rise in the predicted value of start-ups will be driven by growth in the numbers of people starting companies, the study with African business leaders from companies with combined annual revenues of more than $6.75 billion found.
Before the pandemic around 22% of working age adults on the African continent started new businesses. But the research among senior executives based in Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, South Africa, and Tanzania found they expect that number to grow.
More than two out of five (43%) business leaders believe around a quarter of working age adults will have started their own businesses within five years. Almost all (97%) questioned expect the rate to increase from the pre-pandemic 22%.
Business leaders worry new business creation could be blocked by cumbersome regulations and a lack of digital skills due to poor internet connectivity seen as the biggest issues ahead of limited funding and fragmented markets.
They are hopeful about improvements – 70% expect the regulatory issue to become less of a problem over five years while 60% believe the digital skills gap on the continent will close.