After a remarkable period of investment that saw more than 100 private technology companies reach billion-dollar valuations in the past years in Europe and America, many African countries are finding answers to what recent market speculations might mean for financing in the tech industry in Africa.
Speaking to a financial and investment expert, Femi Adekunle to guide our thoughts and approach before embarking on financial investment in Technology, he beamed new ideas to the minds of tech investors in Africa.
Obafemi who has served at various times as a Vice President mergers and acquisitions at Goldman Sachs Inc and Head of internal audit at citizen bank Boston as well as member of the internal audit team at Société générale in France. He carefully highlighted key points before embarking in financial investment that would dominate the world in the coming years through ICT.
In the outset of 2018, the Nigerian government for example planned to increase Information and Communication Technology (ICT) investment in the country by over $50 billion (about N15.9 trillion), given current official exchange at (N360) in the coming years. Currently, investment in the industry, mostly driven by telecoms segment, has reached over $35 billion (about N11.1 trillion). Obafemi elucidated that technology is being unwrapped to be the next line of thoughts of investors in every nation’s adventure towards being globally competitive and booking an existence in the ambiance of International relevance. You might have discerned that the investment in ICT industry in Nigeria for example, where telecoms segment has become a powerful force, has recently been estimated at over $35 billion, government on its own is targeting to accelerate this figure by additional $15 billion in the next two years.
Obafemi in his points believes that different countries would have different financial dispositions towards technological investment. He opines that before any nation could budget some certain amount of money for technological growth, such country would have done pre-investment in the mechanisms that that would guarantee a productive ICT investment. Among the key things he highlighted was the adequate provision of electric power. “Adequate provision of Electric power supply would spring new technological ideas and it would give the government a clear idea on what to actually invest on” he said. He also added, “This would further create a receiving environment for investment in ICT Infrastructures. And beyond Investment in the Infrastructures, there has to be huge investment provision for the maintenance of already budgeted Infrastructures. Goldman for example spends at least $2.5 billion to $3.2 billion on technology each year, or about 7% to 9% of revenue. And for it to be more efficient with its tech spending.
About 30% of the annual expense goes to maintenance, which covers things like communications, market-data expenses, and software licensing.” Talking about strategic technology investments in Africa, It was gathered from the interview with Obafemi that investing in blockchain technology with the Credit Suisse analysts noting that top investors are always interested in Blockchain/distributed ledger technologies would go a long in making African nations catch up with their counterparts on the world stage. Other investments include Symphony, the instant-communications platform, mobile applications, data analysis technologies, telecommunications and of course Artificial Intelligence.