The Rise of AI Software Development Jobs in Africa's Tech Hubs

Africa has been at the forefront of world-class innovation for a long time, especially when it comes to homegrown technology solutions that speak to and solve socio-economic problems in communities across the continent.

One of the most significant is the continent's young and growing population. Africas youth can solve the global tech challenge shortage. Countries such as Kenya and Nigeria and South Africa are establishing intentional tech ecosystems that foster entrepreneurship and skills development, which will open up endless possibilities, particularly for software development and fintech, an industry that is rapidly growing, evolving and one that has often relied on foreign investment.

The demand to hire tech talent is expected to increase by immensely over the past decade. Much of the shortage is based on simple demography. Many European and Asian countries such as Japan and the United States of America, for instance, have had low birth rates for decades. In the United States, the majority of baby boomers will have moved out of the workforce by 2030, but younger generations will not have had the time or training to take many of the high-skilled jobs left behind.

In tech alone, the US could lose out on $162 billion worth of revenues annually unless it finds more high-tech workers. According to the United Nations, Africa has the youngest population in the world, with over 60% of its population under the age of 25.

This young, tech-savvy population is driving innovation and entrepreneurship across the continent. Countries such as South Africa, Kenya and Nigeria have growing youth populations and thus the potential of being the world leaders of young tech-savvy population is great, ultimately servicing the growing demand for tech talent globally.

Nigeria has been experiencing a significant increase in the development of local tech hubs in recent years. These tech hubs are aimed at creating an enabling environment for startups to thrive and contribute to the growth of the technology ecosystem in Nigeria.

Lagos, Abuja, and Port Harcourt are some of the major cities with thriving tech hubs in Nigeria. These hubs offer co-working spaces, incubation programs, and access to funding to help startups grow. The impact of local tech hubs on the Nigerian economy cannot be overemphasized.

These hubs have created job opportunities for young people, reduced the rate of unemployment, and contributed to the development of the Nigerian technology ecosystem. The technology sector in Nigeria has seen significant growth in recent years, with several startups recording impressive successes.

Furthermore, local tech hubs in Nigeria have helped to bridge the digital divide and promote inclusive growth. With the increasing penetration of mobile devices and the internet in Nigeria, tech hubs have become essential in ensuring that the benefits of technology are accessible to everyone, including those in underserved communities. Some of the tech hubs springing up in Lagos include: Co-Creation Hub (CcHub), MEST Incubator Lagos, LeadSpace and Wennovation Hub, among others.

Cape Town is the second-largest city in South Africa, with a population of over 4 million people. It is home to a well-established tech ecosystem. The city strongly focuses on innovation, with various hubs, including iHub Africa and Silicon Cape.

Cape Town has an internet penetration rate of 63% and one of the largest open-access fiber networks in Africa. The city also has the continent's highest number of accelerators, with more than 20, and 25-plus co-working spaces. Overall, the emergence of tech hubs in Africa is an exciting development that is driving innovation, creating jobs, and contributing to the growth of economies across the continent.

As access to technology continues to expand and more young people become involved in entrepreneurship and innovation, the potential for further growth and development is enormous.

The country has been embracing the potential of AI technology to solve local problems and develop solutions for different sectors. The rise of AI technology in Nigeria has been a game-changer, and it is transforming the way businesses and individuals operate.

AI has the potential to open up new economic opportunities for Nigeria while also fostering social progress and promoting inclusive and sustainable growth. Despite the rising number of startups and established companies using AI solutions to provide customer services, AI adoption in Nigeria is still in its early stages.

Major economic sectors in Nigeria still have very little technological innovation. Agriculture despite being a key contributor to GDP and the labor market remains predominantly smallholder and subsistence.

By boosting labor productivity and capital efficiency as well as promoting growth in industries like agriculture, healthcare, education, infrastructure, and energy, artificial intelligence technology has the potential to have an immense positive impact on the economy.

The advancement of AI technology in Nigeria has received support from the national government. By providing funding, infrastructure, and policies that support innovation, the government has created an environment where AI startups can prosper.

The Nigerian government, realizing the potential of AI technology, declared last year that it intends to open a Center for Artificial Intelligence and Robotics with a focus on networking, research development, and information and communication security.

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It is still not commonplace for AI applications to be used in Africa. Most of Africa sadly lacks the essential elements required for technology adoption, and many African nations still lack the infrastructure, governance, data ecosystem, STEM education, and other elements required for AI.

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The lack of infrastructure continues to be a significant barrier to Africa's ability to grow economically. With Africa seen as one of the world’s fastest-growing tech hubs, meeting the demand for key infrastructure has been identified as a priority. 

The quality of life is directly impacted by social infrastructure, which includes water supply, sanitation, sewage disposal, education, and health, which are primary services. Physical infrastructure, which includes transportation, power, and communication through its backward and forward linkages, facilitates growth.

Without this infrastructure, Africa won't experience the levels of growth that are desired or necessary. Therefore, infrastructure planning and investment are essential if Africa is to realize its immense economic potential and developmental potential. Construction of a sustainable infrastructure that can help reverse the situation is essential to helping the continent reach its economic potential.

A recent World Bank study on infrastructure also highlighted challenges in this regard for continental economic development. The study found that the lack of infrastructure in sub-Saharan Africa, including its lack of access to electricity, water, roads, and information and communications technology (ICT), can reduce business productivity by as much as 40% and annually lower national economic growth by two percentage points.

However, steps are being taken to address the connectivity and infrastructure problems within the African nations. The Nigerian government launched the National Broadband Plan, which aims to increase broadband penetration to 70% by 2025, as an example of the actions being taken by African governments. In addition, private companies such as MainOne and Google have invested in building undersea cables and data centers in the country to improve connectivity and infrastructure.

The fifth-generation (5G) mobile service is provided by the subsea cable, which connects Europe to Togo, Nigeria, Namibia, South Africa, and Saint Helena from Portugal along the West Coast of Africa. Its presence in Nigeria has the potential to drastically alter how the more than 214 million residents and businesses of the nation use the internet.

The African Tech Startups Funding Report from Disrupt Africa found that 564 startups raised over US$2 billion in 2021. And the sector seems set to surpass that mark this year, with more than US$3 billion secured in 2022.

A major reason why startups in Africa have continued to raise money amid the global slowdown relates to the sector's ability to solve for primary needs, like access to banking and energy or communication. However, funding for African startups still lags behind the rest of the world, and the sector will require more investment to support its strong innovation pipeline to continue harnessing the power of tech for good and creating new solutions that have global applications.

The fintech sector was the most attractive to investors in 2022, with more startups securing funding than any other sector and a combined total that dwarfed all others according to the disrupt africa report. According to the 2022 African Tech startups Funding Report by Disrupt Africa, South Africa saw a year-on-year (YoY) decline in both the number of startups receiving funding and the total amount of funding received.