Africa’s expanding internet connectivity must now translate into sustainable digital businesses that create jobs, attract long-term investment and retain more economic value on the continent, according to Funke Opeke, Managing Director of MainOne.

Opeke said Africa’s digital economy had reached a point where expanding access alone was no longer sufficient, arguing that governments and technology stakeholders must focus on building businesses capable of surviving market pressures and generating lasting economic value.

Opeke, the founder of MainOne, who became Managing Director of the undersea cable company following its April 2022 acquisition by Equinix, made the call in a LinkedIn post while reflecting on the evolution of Africa’s digital economy, 16 years after MainOne’s submarine cable entered service in 2010.

“Sixteen years on, far more of Africa is online. The harder question is how much of that access we are converting into businesses that last, and recent weeks have not been encouraging,” Opeke said.

MainOne’s founder reflects on Africa’s digital evolution

Although connectivity has expanded significantly across the continent, Opeke said the harder challenge is converting that access into sustainable economic growth.

“Sixteen years on, far more of Africa is online. The harder question is how much of that access we are converting into businesses that last, and recent weeks have not been encouraging,” Opeke said.

She pointed to the withdrawal of Uber from Nigeria after 12 years of operations in September, followed by Moove, whose business depended on Uber’s platform, as examples of the difficulties facing technology businesses in African markets.

Opeke also cited Microsoft’s announcement of the closure of its Nairobi engineering centre, two years after shutting its Lagos engineering centre, as another indication of the challenges surrounding long-term technology investments on the continent.

According to Opeke, technology companies operating in Africa face several pressures, including currency instability, high operating costs, regulatory unpredictability, weak purchasing power and investment priorities determined by international markets.

International technology companies may successfully enter African markets but still struggle to establish commercially sustainable operations, she said, while local platforms face similar economic pressures and competition from businesses with greater scale and stronger monetisation systems.

She argued that the sustainability of technology businesses should become a more important measure of Africa’s digital progress than market entry or isolated success stories.

“The measure that matters is how much new investment we are converting into businesses that stay and grow and create jobs and value that remain in our economies,” she said.

Opeke challenges Africa to find its next digital growth sectors

The MainOne managing director also challenged African technology stakeholders to identify more everyday needs that digital solutions could address at scale.

She pointed to fintech as an example of how technology businesses can expand by addressing fundamental economic activities.

Financial technology companies have grown partly because they addressed universal needs such as money transfers and payments, Opeke said, but argued that Africa must identify other sectors where digital innovation could generate comparable economic opportunities.

“Fintech scaled partly because it met a universal need: moving money and making payments. But the story is not over. Which other basic needs can digital solutions meet, at scale? And how do we ensure we retain value in Africa?” she asked.

Her argument shifts the focus of Africa’s digital-economy debate from the number of people connected to the internet to what those connections produce in economic terms.

For Opeke, the objective should be to build companies and digital services that can scale, remain operational through economic cycles and create employment and other forms of locally retained value.

Africa needs stronger local digital value chains

Beyond developing digital products and services, Opeke called for greater investment in technology value chains within Africa.

She identified telecommunications networks, data centres, cloud platforms, devices and locally developed software as critical components of a stronger digital economy.

Building these capabilities locally, she argued, would allow African economies to retain more of the value generated by their expanding digital markets rather than relying heavily on technology infrastructure and services located outside the continent.

Opeke said global technology operators would not automatically establish these value chains in Africa because investment decisions are influenced by the availability of commercially attractive opportunities, skilled professionals and predictable policies.

“Global operators will not locate these value chains here by default. They go where the economics, skills and policy make it pay to stay,” she said.

She therefore urged African governments and industry stakeholders to create the economic conditions, develop technical capabilities and support businesses needed to attract long-term investment and strengthen the continent’s participation in the global digital economy.

For Africa, Opeke said, the challenge is increasingly about ensuring that expanding connectivity translates into productive economic activity, sustainable businesses, employment opportunities and digital value retained within African economies.