Francophone’s startup ecosystems wish to rival Africa’s Big Four

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Francophone’s startup ecosystems wish to rival Africa’s Big Four

Francophone governments are trying to accelerate their startup ecosystems but it has not been a concerted effort among the countries in the region.

In a hotel room in Abidjan, the commercial capital of Cote d’Ivoire, where I am staying with other attendees of the Cyber Africa Forum, Freddy Mpinda, an advisor to the digital minister of the Democratic Republic of Congo (DRC), tells me how the Congolese government is trying to lay the foundation for a startup ecosystem he hopes can rival the English-speaking Big Four (Egypt, Kenya, Nigeria, and South Africa).

These four countries lead the continent in almost every metric used to gauge a startup ecosystem. According to data from Startup Blink, a startup ecosystem research company, the four countries and Mauritius are the top five countries for startups in Africa. The funding pattern also agrees; the Big Four have historically seen the most investment and accounted for more than half of funding on the continent last year. As expected, they also lead in the number of startups, IPOs, and exits. In all of these metrics, francophone countries rarely appear.

But this does not deter Mpinda from believing that francophone Africa could have a seat at the high table. He tells me of all the steps the Congolese government has taken under President Tshisekedi in the past four years to accelerate its digital economy.

“You have to understand that before President Tshisekedi, other presidents never said or did anything about the digital economy. Now, we have a national digital strategic plan and, for the first time in years, a digital ministry. We also have an agency to develop the digital economy, and last year we signed a startup act.”

According to Mpinda, these steps are already bearing fruit. “Before now, it was difficult to collect taxes, but now our finance ministry has used technology to improve how they collect taxes. Also, when COVID-19 came, we did not have any e-learning solutions, but now we have many solutions for e-learning,” he said. “If the pandemic comes back, the DRC is prepared for e-learning,” he jokingly added.

Mpinda, however, acknowledged that the government alone cannot create an ecosystem. Across francophone Africa, it has been noted that the entrepreneurial culture is low. “Our young people would rather work in the public sector than build a business. That’s not a good idea. We need them to go to the private sector to make money. [The government’s] goal is to encourage them to build successful businesses,” Mpinda said.

Fintech startups are already emerging, albeit slowly, in the DRC. In June, Tuma raised $500,000 in funding—the largest investment round for a Congolese fintech ever. In August, DRC-based VaultPay, a fintech building core payments infrastructure for Central Africa, was unveiled as the third African startup selected for Y Combinator’s 2023 summer class.

In the Republic of Benin, the government’s efforts have focused on improving internet penetration and digitising the public sector, as the country’s startup ecosystem is still very much in its infancy. The government has built a Tier 3 data centre, and there are plans to build more data centres, according to Maximilien Kpodjedo, the digital project manager for Benin’s president. “We are adding more data centres so we can have resilient storage of our critical data, applications, and systems for the country. We want to host [our critical data] in-house instead of exporting it abroad, where we do not have the sovereignty of our data,” Kpodjedo said. The government has also launched a 3,000-kilometre fibre-optic network that has boosted internet connectivity from 20% in 2016 to more than 70% in 2022.

For startups in the country, the government has introduced tax benefits. “We try to analyse and see the best-performing startups to provide them tax incentives during the first three to five years. When they import some equipment or infrastructure to do business, they receive exoneration,” Kpodjedo told me in Abidjan. He added that these tax incentives and an upcoming startup act could act as a “shortcut” for the development of startups.

Ouanilo Medegan Fagla, a director of Benin’s information and digital systems agency, told me that the government is improving the talent pipeline by “trusting the country’s youth” and supporting them with programmes and scholarships. “Since 2017, we have had a national challenge we call Hacker Lab, where we take 80 young people and test them for two days. At the end of the two days, we select the best to come and work for the agency,” he said.

Some francophone governments, like Tunisia and Senegal, have already enacted Startup Acts, while Cote d’Ivoire is set to launch its startup act. In Tunisia, the government also runs a national programme that offers startup grants.

It has not always been smooth sailing for the digital economy in Africa’s francophone region. Last month, the Senegalese government shut down the internet to prevent disturbances to public order. This was the second time in two months that the government shut down the internet. Both shutdowns have been associated with the arrest of Ousmane Sonko, an opposition leader in Senegal.

Politically motivated internet shutdowns are not peculiar to Senegal. In Gabon, the government shut down the internet as a way to control the narrative of its recently conducted elections. These actions threaten the growth of startups and reduce investor confidence. Moustapha Ndoye, the CEO of Chargel, a Senegalese logistics startup, called the shutdowns “unfortunate” and told TechCabal that they erode trust in the country’s startup ecosystem.

Government assistance in the francophone region could go a long way in accelerating the startup ecosystem, but there needs to be a more concerted effort from all the countries to allow a region that is connected by a similar language, currency, and culture to establish itself as a regional tech powerhouse.

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