General
Igniting Innovation-Based Growth in Africa
By Tolu Oyekan
Despite being the second largest continent by population and its huge landmarks, Africa still lags behind in several indicators vital for a successful industrial revolution. The region is still behind in the most important measures of innovation capacity.
Although Africa has 18% of the world’s population, it accounts for only 0.3% of global R&D spending and 0.5% of patent applications. Trade statistics paint a picture of a relatively low-tech, low value-add region: Africa produces 0.4% of global high-technology exports and 0.8% of middle-technology exports, such as industrial machinery, autos and chemicals.
Unlike previous waves of industrial change, competing in the digital age doesn’t require deep scientific expertise or massive capital investment. Instead, innovators and entrepreneurs in emerging markets are in a position to tap into flows of talent and digital knowledge; and convert them into novel goods, services and business models.
Specifically, Nigeria has been making steady progress in digitalization, technological advancement and innovation. The advent of the internet has impacted Nigeria positively; connecting businesses, individuals and enterprises in a seamless manner. Internet access and mobile phone usage have grown dramatically, as has Science, Technology, Engineering and Mathematics (STEM) education.
Nigeria has the potential to unleash innovation that could transform industries and improve well-being across the region. These innovations can be seen in the transport, health, education, payment and fintech sectors.
Nigerian startups have attracted hundreds of millions of dollars in equity funding. Voltron Capital is one of the well-known active investors in Nigeria tech startups and Africa at large.
Since its inception in 2014, it has invested in 33 startups. The Fintech (Financial technology) sector is one of the major and fastest-growing start-up ecosystems in Nigeria and these companies in Nigeria are driving tangible change for businesses.
According to a study by Boston Consulting Group (BCG), the number of African tech startups receiving funding between 2015 and 2020 increased by 46%, nearly six times faster than the global average.
However, the progress Africa has achieved has been concentrated in a handful of nations: Nigeria and five other African countries (Egypt, Kenya, Morocco, South Africa, and Tunisia.) These six countries account for half of all African mobile communication subscriptions, for example. Internet access and mobile phone usage have grown dramatically.
In 2021, Nigeria had 108.75 million internet users. This figure is projected to grow to 143.26 million internet users in 2026. Four nations receive around 85% of the continent’s venture capital investments and 70% of STEM graduates.
South Africa, Egypt and Morocco account for 70% of public R&D spending in Africa. By their analysis, only two nations—South Africa and Kenya—have comprehensive regulations related to innovation.
In a recent report by BCG, Morocco’s 200-company automotive cluster is launching R&D initiatives linking manufacturers to universities and Kenya has emerged as a hotbed for fintech. South Africa’s dynamic health technology ecosystem includes more than 120 companies. Incubators, entrepreneurship training and investment funds are making Egypt the region’s fastest-growing startup ecosystem.
The good news is that talents in the region who are trained in the skills needed for fields like AI and advanced analytics are proving that they can integrate seamlessly into global value chains.
Freelance workers in such digital disciplines are in high demand, and the COVID-19 epidemic has made leading corporations far more receptive to remote work. This means that, for once, governments that invest in training can create jobs at home that will contribute to socio-economic development and innovation in Africa—rather than a brain drain.
Given the region’s diverse markets, there is no uniform approach to building and nurturing an innovation-driven economy that will work in all of Africa. The most appropriate strategies and mixes of policies will depend on which types of innovators—such as Multinational corporations, local champions, or startups—are being targeted.
There are, however, three basic steps that African governments need to follow to activate their national innovation system: build a national innovation strategy, stimulate domestic innovation activity, and enable the new national innovation ecosystem.
Building a National Innovation Strategy
Governments need to set their sights on innovation-driven fields that can create value well into the future by defining a national ambition and targeting priority innovation sectors. This can be done by considering the evolving opportunities in the emerging, digitally connected, Industry 4.0-driven global economy. Based on this analysis, policymakers should identify industrial sectors that are in the strongest position to achieve key national goals.
Nigeria has taken the initiative to adopt a National Strategy for the development and expansion of the tech ecosystem into communities, schools and innovation-driven enterprises (IDEs), thereby providing an opportunity for various sectors of the economy to leverage technology to transform business models, enhance productivity and efficiency; while also creating jobs and wealth for operators.
Stimulating Domestic Innovation Activity
To successfully launch different innovation clusters to stimulate innovation activity and attract foreign partners, African governments should provide operational, technical and financial support; encourage collaboration, invite open innovation and provide an innovation-friendly regulatory environment.
Enabling the New Innovation Ecosystem
A well-designed policy framework can lay the ground for a thriving innovation economy. But governments—especially in developing economies such as those in Africa—must also play a lead role in driving the investments that are needed to build innovation capacity.
Governments can leverage the success of leading-edge companies to support the development of innovation ecosystems by collaborating with the private sector to build supporting infrastructure, develop the talent pool and actively pursue and support pro-innovation investment.
While there is no single innovation strategy that can work across such a diverse region as Africa, the basic approach of defining national strategies, stimulating innovation activity and enabling the innovation system applies. Success in these areas will require collaboration among all actors in the innovation ecosystem: local companies, small entrepreneurs, academic institutions and investors. The specific policy formula should vary according to each country’s level of economic maturity, existing innovation capacity, competitive strengths, market ambitions and national needs.
As African nations continue to aggressively invest in their innovation capacity and implement the right blend of strategies and policies, we believe the continent is poised to write a new chapter in its economic history. But Africa should move now while there is still ample opportunity to get on the top deck with innovation cycles that are redefining the future.
Tolu Oyekan is a Partner at BCG
By Adedapo Adesanya
The Nigerian Army has arrested 18 suspected illegal miners at a mining site in Izom, Gurara Local Government Area of Niger State, recovering equipment and N2.47 million in cash from the operation.
The suspects were arrested by troops of the 102 Guard Battalion during a routine operation in the area, where the soldiers reportedly discovered unauthorised mining activities.
Following the arrests, the army handed over the suspects and recovered items to the headquarters of the Nigerian Security and Civil Defence Corps Mining Marshals in Sauka, Abuja, in line with established inter-agency procedures.
The operation is part of intensified efforts by security and regulatory agencies to curb illegal mining, which has been linked to revenue losses, environmental degradation and the unlawful exploitation of Nigeria’s mineral resources.
Reacting to the development, the Commander of the NSCDC Mining Marshals, Assistant Commandant of Corps John Onoja Attah, commended the Nigerian Army for what he described as a strong demonstration of professionalism and commitment to protecting the country’s mineral wealth.
“The Nigerian Army has once again distinguished itself through professionalism, discipline and patriotism. The swift arrest of the suspects and their prompt handover to the Mining Marshals reflect a commendable commitment to the rule of law and the protection of Nigeria’s solid mineral resources,” he said.
Preliminary investigations by the Mining Marshals indicated that the suspects allegedly operated without licences, permits or any affiliation with a registered mining company. Investigators also said they could not produce evidence of valid mineral titles or authorisation from the relevant regulatory authorities.
Items recovered from the mining site included motorcycles, pumping machines, crusher engines, communication devices and cash totalling N2,468,750.
Mr Attah said the Mining Marshals would continue to pursue individuals involved in illegal mining and strengthen intelligence-led operations against activities that undermine the formal mining industry and deprive government of legitimate revenue.
He added that the Corps, under its Commandant-General, Mr Ahmed Audi, remained committed to enforcing the provisions of the Nigerian Minerals and Mining Act and protecting Nigeria’s mineral resources from unlawful exploitation.
The Mining Marshals said the investigation had been concluded and that the 18 suspects were being processed for prosecution under the relevant provisions of the Nigerian Minerals and Mining Act, 2007.
By Adedapo Adesanya
The National Agency for the Prohibition of Trafficking in Persons (NAPTIP) has sealed a suspected illegal maternity facility in Port Harcourt, Rivers State, and arrested three people over an alleged N13.5 million baby sale involving a Liberian national residing in Belgium.
The agency said the suspects included the owner of the facility, an alleged facilitator of the baby sale and a member of staff.
According to a statement issued on Thursday by NAPTIP’s Head of Press and Public Relations Unit, Mr Vincent Adekoye, the facility, located in the Elelenwo area of Port Harcourt, was allegedly operating from a residential apartment.
The operation was carried out jointly by NAPTIP operatives from Abuja and Rivers State, in collaboration with officials of the Rivers State Ministry of Health, following intelligence about a suspected child-trafficking syndicate involved in the procurement, sale and unlawful transfer of children.
NAPTIP said preliminary investigations indicated that the Liberian national arrived in Nigeria without evidence of pregnancy but allegedly took custody of three children within about one month.
The agency said intelligence available to it suggested that approximately ₦13.5 million changed hands in connection with the transfer of the three children.
Investigators are now working to establish the identities, whereabouts and welfare of the children, as well as determine their biological and legal parentage.
The investigation will also trace the financial transactions linked to the alleged transfers and establish the roles played by medical personnel and other individuals who may have facilitated the suspected criminal activity.
NAPTIP said the facility was sealed to preserve potential evidence while investigations continue.
The agency said the operation formed part of its nationwide crackdown on fraudulent maternity and healthcare facilities allegedly operating as so-called baby factories.
NAPTIP Director-General, Mrs Binta Bello, expressed concern over the alleged activities of some maternity and health facilities, particularly their suspected involvement in illegal adoption, child sales and trafficking.
She said, “I am particularly disturbed that foreign nationals now come to Nigeria to patronise these suspected criminal elements and procure children like a common object of trade across the border. This is sad and totally unacceptable.
“We have spread our dragnet to fish out all those involved in this case, and they shall be made to face the full wrath of the law,” she said.
She further said the investigation remained active and that anyone found culpable would be prosecuted in accordance with the law.
“I wish to reaffirm that the matter remains under active investigation and that all persons found connected to it will be subjected to due process under the law. The Agency will ensure that anyone found culpable is brought to justice, while the safety and welfare of the affected children remain its foremost priority,” she added.
The NAPTIP chief urged members of the public to remain vigilant and report suspected cases of child trafficking, illegal adoption, baby-selling and other forms of exploitation to the agency through its nearest zonal or state command.
NAPTIP said the latest operation followed an earlier directive by Bello to intensify surveillance of suspected maternity facilities across the country after intelligence suggested that some had become centres for fertility scams, child sales and trafficking.
By Adedapo Adesanya
The chief executive of Oando Plc, Mr Wale Tinubu, says the African Export-Import Bank (Afreximbank) is now the largest financier of oil and gas projects on the African continent.
Mr Tinubu said the bank has committed over $25 billion in Africa’s oil and gas sector while speaking at the Royal African Society’s conference in London on the next 125 years of mining, oil and gas in Africa, according to a social media post on Wednesday.
“Afreximbank is now the largest financier of oil and gas on this continent, with more than twenty-five billion dollars committed,” he wrote on X.
Mr Tinubu said 20 years ago, when Oando wanted to list on the Johannesburg Stock Exchange, “we were told what would be required of us”.
He said the company was directed to adopt International Financial Reporting Standards (IFRS), while the board was also asked to appoint independent directors who could tell the founder “no”.
“Get on a plane and explain ourselves, quarter after quarter, to people who had never set foot in Lagos. It was uncomfortable. It was also the most valuable thing we ever did to ourselves,” he said.
“I returned to that experience in London at the Royal African Society’s (@royafrisoc) discussion on the next 125 years of mining, oil and gas in Africa, where I was asked what African companies need in order to scale.
“The answer begins at home. Much of African enterprise started out fractured; family-held, informally governed, structurally invisible to anyone underwriting a twenty-year risk. Global capital hesitates over what it cannot examine.”
The Oando CEO said governance is more than a compliance exercise, describing it as an instrument that makes a company legible to the world.
“The second half of the answer sits with the world. When European lenders withdrew from African hydrocarbons in pursuit of their own net zero commitments, they did not end demand for African energy,” he said.
“They ended their participation in it. African institutions stepped into that space.”
Mr Tinubu said African firms have done the harder work “of making ourselves investable”, noting that what does not get financed does not get built, and “there is still much to build in Africa for those willing to build it with African companies”.
In Nigeria, the bank has been a major financier of the 650,000 barrels-per-day Dangote Petroleum Refinery, including a $1.35 billion facility in 2025 to refinance construction costs and a further $2.5 billion underwriting commitment in 2026.
The bank has also supported the development of the 200,000 barrels-per-day Lobito Refinery in Angola, the 60,000 barrels-per-day Cabinda Refinery, and the refurbishment of Nigeria’s 210,000 barrels-per-day Port Harcourt Refinery. It has additionally approved financing for the BUA and Azikel refineries in Nigeria and supported Société Ivoirienne de Raffinage in Côte d’Ivoire.
Beyond refining, Afreximbank committed up to $400 million in guarantees and direct lending to Mozambique’s Area 1 LNG project, one of Africa’s largest LNG developments, to support the extraction, processing and liquefaction of offshore gas.
In Angola, the bank helped arrange a $1.75 billion syndicated facility for Sonangol to support the national oil company’s operating and capital expenditure requirements. It has also been mandated to advise on raising capital for Equatorial Guinea’s $4.5 billion EG-27 LNG project, which is expected to produce about 2.4 million tonnes of LNG annually. In the Democratic Republic of Congo, the lender is supporting preparations for a 200MW reservoir-based hydropower project along the Lufira River, designed to provide electricity to mining operations.
