Four strategies from North Africa to drive tech investment in SSA

North Africa has benefited from a slew of financial technology investments regardless of conflict, recent reporting shows. In contrast, when it comes to sub-Saharan Africa, the story is different – Kenya, for example, faces the stark reality of an 88% negative sentiment in global news coverage.

This media bias, focusing on conflict and poor leadership – as indicated by a study from Africa Practice – negatively impacts Kenya's ability to attract investments.

For sub-Saharan Africa as a whole to improve its investment prospects in the tech space it could focus on four key areas that North Africa has been utilizing to draw funding to the region.

1. Ramp up digital skills training

One expert noted that while some conditions, such as geographic position or proximity to Europe, are challenging to reproduce, sub-Saharan Africa can draw from North Africa's playbook to attract more tech investments through skills and training.

"Over the longer term, governments must work to provide the necessary education and skills to their local workforces. While there will always be a skilled expat demographic in a given country's tech sector, it is important for governments to ensure their citizens are key players and beneficiaries in this space," said Robert Mogielnicki, an adjunct assistant professor at Georgetown University's Walsh School of Foreign Service.

Related:US-Kenya tech exchange aims to bridge digital gap, boost STEM education

Building on Mogielnicki's point that sub-Saharan Africa needs to train its workforce in the tech space, Dr. Thierry Wandji – who works with US President Joe Biden's administration to accelerate Africa's digital technology and is also the CEO of Cybastion, a company working toward empowering Africa's technology infrastructure – said he advocates for learning opportunities for the world's fastest-growing population.

Experts believe increased tech skills training is an important tool to bring more investment into sub-Saharan Africa. (Source: Image by pch.vector on Freepik)

"One thing that I'm trying to push for is education [and] training. Because, especially in Morocco, they [often go] to Europe and North America and also to the Middle East to train. That's something that we need to do in [sub-Saharan] Africa," Wandji said.

"But instead of having Africans going overseas, we're trying to bring US education into West Africa. We're trying to bring these big tech companies online to train folks because training is a big, big, big part of the success in North Africa," he added.

2. Build more bridges with tech giants 

Wandji also said another strategy for sub-Saharan Africa is to "build bridges with big tech companies so they can come and invest more."

"Because what Egypt, Morocco and Tunisia have done is they have these big tech company [partnerships that bring] high-quality results," he added.

Related:Sub-Saharan Africa remains the least connected region globally

He mentioned that companies like Starlink and Amazon "are on every single continent, but they are barely in Africa."

He said he sees this as an opportunity to build bridges because Africa "is one of the biggest continents with a big population, so when you talk about increasing your sales and getting more influence, you have to be there."

3. Implement investor-friendly policies

North African countries have excelled at attracting tech investors, particularly countries like Morocco, which benefit from its "political stability and world-class infrastructure," according to the US State Department.

Additionally, the country offers investor-friendly environments like tax incentives. These tax breaks in the early years boost investor profitability. 

Many experts point to North Africa's strong ties to Europe as a key factor in its success at drawing foreign tech investment.

"Morocco gets [tech investment] because of [their] French connection. It's a more developed economy and Morocco has a Free Trade Agreement with Europe, and it's attracting a lot of investment," Witney Schneidman, the former US deputy assistant secretary of state for African affairs, told Connecting Africa.

North African countries have succeeded in attracting tech investors through investor-friendly policies. (Source: Image by pch.vector on Freepik)

He also said that when it comes to attracting investments from tech giants, investor-friendly policies play a pivotal role in determining where companies choose to establish their presence.

"You've got Microsoft, you've got Google, they're invested in the largest markets, and there's no way Microsoft is going to be doing more in, let's say, Uganda than Kenya. For that to happen, Uganda would have to make itself an incredibly investor-friendly environment," Schneidman, who is also a senior fellow with the Africa Growth Initiative at the Global Economy and Development program at Brookings Institute, said.

According to the US State Department, Uganda's threats to open and free Internet access – including an ongoing ban on Facebook in place since January 2021 – and the Uganda Revenue Authority's increasingly assertive tax collection practices combined create a challenging business environment.

Morocco continues to make it easy for its investors by being the only country on the African continent that has a Free Trade Agreement with the US, according to Schneidman. 

4. Embrace geopolitical consequences

Sub-Saharan Africa could also take the lesson from North Africa's ability to navigate geopolitical challenges, like how they did when the US employed strategies to counter China's influence in the region through its Free Trade Agreement. 

However, there are questions about how active the incoming Republican administration will be in Africa going forward.  

Wandji says he thinks US President-elect Donald Trump's administration will do work in Africa when he returns to the Oval Office in 2025.

"I think they will remain engaged, to which level, I don't know. But during the first Trump administration, they created Prosper Africa," he said.

Prosper Africa is a US trade and investment initiative aimed at increasing US-African deals.

Trump could sharply pivot in US-Africa relations, with the aim of spotlighting Africa as a key geopolitical battleground to outmaneuver China. It would be a loss, Wandji said, if the US influence continues to wane in Africa.

"Despite the administration, it's in the best interest of the United States to be involved in the digital transformation of Africa; if the United States is not involved, then China will, and other countries. I'm sure the United States wouldn't want to lose the influence in that part of the world," he said.

Republicans will dominate Washington politics in 2025 and have, in the past, consistently opposed China's influence through legislation, and Africa is no exception.

With China heavily invested in African infrastructure and technology, Republicans view Beijing's activities on the continent as a direct threat to US interests.

"You cannot dismiss Africa and hope to remain a giant where you have all the Chinese companies there, and China is the second greatest power on earth," Wandji added.

For Trump, strengthening US-Africa ties would not only counter China's dominance but also serve as a political strategy to claim foreign policy wins, according to Wandji.

This could frame his renewed engagement as a corrective to Biden's perceived neglect of the continent, as reporting has shown.

In this case, Africa's strategy is leveraging geopolitical dynamics and letting the chips fall where they may.