Tech investors eye Africa’s education, financial sectors

AFRICA’S education and financial services sectors offer the best opportunities in the post-COVID-19 period as the pandemic speeds up a shift into digital ways of living and working, two prominent investors said on Tuesday.

Digital infrastructure businesses at this point in time are probably the ones that investors are most excited about.

Jihan Abass, founder and CEO of Kenyan digital insurance platform Lami, has seen her firm, which sought to upend the said insurance world of the East African nation by allowing consumers to buy motor insurance on their mobile phones through instalments, has seen increased demand since the pandemic started.

Nigeria’s Iyinoluwa Aboyeji, the general partner of Fund for Africa’s Future, an investment vehicle focused on African start-ups, believes investment in education technologies will offer attractive returns as the sector bounces back.

The hardest hit sector in the COVID-19 era was education because authorities were so unprepared for the tsunami.

Technology solutions to support learning in all institutions are low-hanging fruits.

They are so under-invested in terms of new technologies to assist them.

But the exuberance about the opportunities in tech is being tempered by new regulatory hurdles, as governments look to generate revenue from the fast-growing digital services sector.

Kenya, a key player in the sector due to innovations like mobile money platform M-Pesa, which is operated by Safaricom, introduced a new digital services tax this year.

Moves like these will discourage investments in the sector and curb technology’s potential role of encouraging export of goods and services, which could be a better way for governments to boost a revenue.

If you squeeze off your digital ecosystem with taxes on day one, you are going to end up with nothing because the talent is extremely mobile, it will just leave.

Governments on the continent should instead be offering incentives for tech start-ups due to their potential to drive up traditional businesses like insurance.

These incentives are things that are still lacking.

If you look at Africa, only 3% of people have insurance so the regulators need to nurture the industry and help it grow.