Francophone governments are individually pushing to boost their respective startup ecosystems, but there lacks a coordinated effort among the countries in the region. From Abidjan, the commercial capital of Cote d’Ivoire, where I am residing with fellow participants of the Cyber Africa Forum, Freddy Mpinda, an advisor to the digital minister of the Democratic Republic of Congo (DRC), shares insights on how the Congolese government is actively working to establish the groundwork for a startup ecosystem that aspires to rival the well-established English-speaking Big Four countries – Egypt, Kenya, Nigeria, and South Africa.
These four nations consistently excel across a spectrum of metrics used to evaluate the prowess of a startup ecosystem on the continent. According to data from Startup Blink, a research firm specializing in startup ecosystems, Egypt, Kenya, Nigeria, South Africa, and Mauritius secure the top spots for startup-friendly environments in Africa. This trend is also reflected in funding trends; the Big Four countries have historically attracted the lion’s share of investments, accounting for over half of the continent’s funding in the previous year. Notably, they take the lead regarding startup numbers, IPOs, and successful exits. In contrast, the presence of francophone nations is sparse across these measures.
Despite this, Mpinda remains undeterred, harboring the belief that francophone Africa has the potential to carve out a significant position. He shares with me the various strides the Congolese government took under President Tshisekedi’s leadership over the past four years to expedite the growth of its digital economy.
It’s crucial to recognize that before President Tshisekedi’s tenure, the digital economy hadn’t received attention or action from past administrations. Today, we have a comprehensive national digital strategic plan and, notably, a digital ministry for the first time in years. A dedicated agency has also been established to foster the development of the digital economy, and just last year, a startup act was signed into law.”
According to Mpinda, these measures are already yielding positive outcomes. “In the past, tax collection posed challenges, but now our finance ministry has harnessed technology to enhance the tax collection process. Additionally, when the COVID-19 pandemic hit, we lacked adequate e-learning solutions, but we’ve since developed numerous e-learning options,” he remarked. He humorously added, “Should the pandemic resurface, the DRC is now well-prepared for e-learning.”
Mpinda, however, candidly acknowledges that crafting an ecosystem isn’t the government’s sole responsibility. It’s observed across francophone Africa that the entrepreneurial culture tends to be less prominent, with many young individuals preferring public sector employment over starting their ventures. “Our youth often opt for public service roles instead of entrepreneurship. This isn’t ideal. We need them to explore opportunities in the private sector to generate income. The government’s aim is to inspire them to establish successful businesses,” Mpinda emphasized.
Signs of progress are evident in the fintech sector within the DRC, albeit at a gradual pace. In June, Tuma secured a noteworthy $500,000 in funding—the largest investment round ever attained by a Congolese fintech. Moreover, in August, VaultPay, a DRC-based fintech focused on building essential payments infrastructure for Central Africa, proudly emerged as the third African startup chosen for Y Combinator’s 2023 summer program.
In the Republic of Benin, the government’s endeavors have been concentrated on enhancing internet accessibility and modernizing the public sector, given that the country’s startup ecosystem is still in its nascent stages. A Tier 3 data center has been constructed, and there are intentions to develop additional data centers, as indicated by Maximilien Kpodjedo, the digital project manager for the president of Benin. Kpodjedo stated, “We’re expanding our data center infrastructure to ensure robust storage of our critical data, applications, and systems domestically. Our aim is to locally host our crucial data instead of sending it overseas, where data sovereignty is compromised.” Furthermore, the government has successfully introduced a 3,000-kilometer fiber-optic network, contributing to the escalation of internet connectivity from 20% in 2016 to over 70% by 2022.
To support startups within the nation, the government has implemented tax advantages. Maximilien Kpodjedo shared, “We evaluate and identify high-performing startups to grant them tax incentives for the initial three to five years. This includes exemptions when they import equipment or infrastructure for their business operations.” Speaking in Abidjan, he further explained that these tax incentives, along with an impending startup act, have the potential to serve as a “shortcut” in fostering the growth of startups.
Ouanilo Medegan Fagla, director of Benin’s information and digital systems agency, shared that the government enhances the talent pipeline by entrusting the nation’s youth and providing them with initiatives and scholarships. He explained, “Since 2017, we’ve initiated a national challenge called Hacker Lab. This involves a two-day evaluation of 80 young individuals. After these two days, we select the top performers to join and contribute to the agency.”
Certain francophone governments, including Tunisia and Senegal, have already implemented Startup Acts, and Cote d’Ivoire is on the verge of launching its startup act. In Tunisia, the government operates a nationwide program that also extends startup grants.
The journey of the digital economy in Africa’s francophone region has not always been without challenges. Last month, the Senegalese government employed internet shutdowns to prevent public disturbances. Remarkably, this was the second shutdown in two months, both correlated with the apprehension of Ousmane Sonko, a prominent opposition figure in Senegal.
Instances of politically motivated internet shutdowns aren’t confined to Senegal. In Gabon, the government resorted to internet shutdowns to shape the narrative surrounding recent elections. Regrettably, these actions threaten the advancement of startups and engender a decline in investor confidence. Moustapha Ndoye, CEO of Chargel, a Senegalese logistics startup, lamented these shutdowns as “unfortunate,” emphasizing that they undermine faith in the nation’s startup ecosystem.
While government support holds the potential to drive the startup ecosystem in the francophone region, a more collaborative effort is imperative across all countries. By capitalizing on shared language, currency, and culture, the region can establish itself as a notable tech hub, provided a concerted endeavor is undertaken.