The State of the African Technology, Media and Telecommunications Sector in 2024

The technology, media and telecommunication sector in Africa has been undergoing sustained growth and evolution in Q1 and Q2 of 2024, seeing advancement in both technical development and infrastructure, but also (in some instances), regulation and laws. This article addresses three of the most noteworthy sectors to watch.

The rollout of 5G has been transformational in a variety of industries in Africa. Innovative projects such as enhanced asset tracking and logistics, energy monitoring, healthtech and telehealth, and precision agricultural tools, for example, have seen leapfrog growth in opportunities because of the high bandwidth wireless internet access that 5G offers. Such high-speed connectivity, low latency and efficient data transmission that come with the growing adoption of 5G also mean that cloud-based services such as video or music streaming and gaming are booming across the continent, leading to further opportunities for investment and new and interesting emerging market avenues for growth. According to GSMA Intelligence research, in September 2023, 27 operators in 16 African countries had launched commercial 5G services, with ten further countries committed to launching 5G soon.

This has also enabled newer rollout methodologies for connecting remote areas in Africa. Fixed Wireless Access (FWA) technology, for example, has enabled many countries globally to simplify “last mile” infrastructure for internet connections through 5G. Such FWA solutions use wireless connections, instead of laying physical cables, to connect homes and other users to the internet, thus speeding up infrastructure deployment when compared to fibre rollout. According to recent reports, of all the African markets that have launched 5G, at least 14 are offering 5G FWA.

However, the commercial barriers to these methods have limited their impact. The cost of the user equipment needed to connect to 5G FWA (customer premises equipment) has limited their customer bases. As a result, 5G still remains dominant only in Africa’s big cities, although some markets, such as South Africa, are ramping up. The above-mentioned GSMA report noted that the total adoption of 5G in Africa is still only at around 1% of total connections, which will grow to 8% by 2026 and 22% by the end of the decade.

AI developments, particularly those around generative AI, have dominated headlines, market interest and capital deployment around the world in 2023 and 2024, and Africa was not left unaffected. The region has seen significant AI project startup deals in the last two years, for example with the roughly USD550 million acquisition of InstaDeep, a Tunisian self-learning, decision-making AI startup, acquired by a Nasdaq-listed German biotech company BioNTech SE. Various similar large AI startups are developing across Africa in industries such as digital identification, climate-technology, fintech and marketing.

Africa, however, faces unique challenges with AI adoption. Technical hurdles such as poor data sources or lack of demographic coverage for data sources, low internet access across regions and a shortage of skilled professionals and academics in computer science and machine learning slow the development and scaled local deployment of AI products and solutions.

Regulation of AI is also at a very early stage. No large African territory has issued targeted regulations or laws relating to AI (unlike the EU), and the industry remains largely governed by AI-ancillary laws of general application such as data protection and product liability, depending on circumstances and use cases. Although countries like Mauritius and Egypt have published the first iterations of AI policies and established bodies to develop national AI strategies, most African countries are at a policy development stage in their regulation journey. South Africa similarly published its draft national AI plan in early 2024 (dated October 2023), which is largely a high-level strategic document, as opposed to a positioning paper on regulation.

Whilst this may be accelerated by the EU’s AI Act moving swiftly into full implementation by 2026, it remains to be seen whether African nations will adopt a prescriptive and horizontal regulatory approach (like the EU) or a more principles-based and vertical (industry-specific) approach (like the UK and the US). Africa also faces unique policy trends when it comes to regulating digital sectors, such as a tendency toward data sovereignty, which could prove an obstacle for cloud-based solutions for AI projects that are not locally based.

Fintech has been one of the largest technology sectors in Africa for the past five years, and is regarded as one of the fastest-growing fintech regions in the world. Mobile money in Africa has attracted a swathe of large players, including a movement of the big African telcos into the fintech sector, with some undergoing significant restructurings in 2023 to facilitate this. Countries such as South Africa, Nigeria, Egypt and Kenya have produced multiple fintech US-dollar unicorns since 2020, and seen significant exits through M&A consolidation in some Fintech sectors, such as the payments sector. Although the seed-stage and early-stage venture investment into fintech has tapered off since 2020 in light of global macro-economic circumstances, the sentiment towards the African fintech sector remains positive.

In respect of regulation, there have been interesting developments regarding crypto-asset laws. South Africa, for example, via its Financial Sector Conduct Authority, has started issuing its first Crypto-Asset Service Provider licences under the Financial Advisory and Intermediary Services Act, 2002, with at least 75 approved institutions as of April 2024. Similarly, in Nigeria, the Central Bank of Nigeria (CBN) has lifted its ban on financial institutions facilitating crypto-asset transactions, a ban that has been in place since 2021. This opens the door for the Nigerian Securities and Exchange Commission (SEC) to start licensing in line with regulations it issued in 2022, which have been on hold due to the difference in sentiment between the CBN and the SEC. Such countries are aligning with the global trend towards the regulated use of crypto-assets, such as taken by the EU with its Markets in Crypto-Assets regulation effective from 2023, and the global efforts to “tame” the industry.