In 2024, early stage investors are navigating a complex and evolving landscape in the African tech ecosystem, resulting in an increasing focus on three critical concerns that are influencing start-up operational success and, by implication, valuations across the continent. This article presents my perspective on these challenges and how to go about navigating them to tap into the immense potential of Africa’s tech sector.

The prospect of a global economic downturn is a significant concern for us all with rising inflation, interest rate hikes, and geopolitical tensions fueling fears of a recession. This economic uncertainty could severely increase the already restricted access to capital African start-ups experience, particularly from international investors who are becoming more risk-averse. Additionally, a slowdown in consumer spending, as inflationary trends and currency devaluations continue, will put considerable pressure – not just on SMEs but also on start-ups that rely heavily on strong domestic demand.

In this climate, early stage investors have become more discerning, favouring start-up ventures with solid financials, proven business models, and clear trajectories towards profitability. Well-capitalised start-ups addressing fundamental consumer or enterprise needs are now in a much stronger negotiating position than those burning cash on luxury or non-essential product/service offers. As we say, pain-killers please not vitamins…

Political instability remains a critical risk factor across the continent with almost one-third of African countries hosting one-fifth of Africa’s population expected to hold elections in 2024. South Africa just concluded and several other nations, including Rwanda, Tunisia, Mozambique, Mauritania and Ghana, are heading into high-stakes elections in 2024. MORE: https://www.yumpu.com/en/document/view/68747120/accomplish-magazine-july-2024