What’s the first thing that comes to mind when you think of Ghana?
The Ashanti kingdom? Relaxed and easy-going people? Jollof rice wars with Nigerians?
For many years the West African nation has been known for its prominent natural resources: Gold and Cocoa. It’s the world’s second-largest producer of cocoa and the only African country among the top ten gold producing countries.
Compared to other continent heavyweights like Nigeria, South Africa and Kenya, Ghana has mostly been in the background in terms of tech in Africa. But Ghana’s budding tech scene has caught the attention of many and appears to be on the way to becoming a major export.
Recent moves by big tech companies — Twitter setting up its African headquarters in Ghana and the 2019 launch of Google’s AI lab in Accra, the nation’s capital — are roaring examples of the dawn of Ghanaian Tech.
TechCabal visited Ghana in July to get a first-hand view of Accra by connecting with key players and rising stars.
Here’s what you should know about Ghana’s tech ecosystem, beyond cliches.
The people and prospects
With a population of about 31 million people growing at 2.2% annually, Ghana is currently the 13th most populous African country. Approximately 57% of its population is under the age of 25, a sign that Ghana and other African countries will supply a disproportionate percentage of the world’s working-age people in the coming years.
Adult literacy at 79% (as at 2018) has eased the adoption of tech products by its population.
Foster Akugri, the founder of Hacklab Foundation, a not-for-profit organization focused on preparing young people for future jobs, believes the population is becoming more tech-savvy.
“We are seeing more Ghanaian tech talents being headhunted by global companies. Now there are two ways to look at this, you can call it brain drain or that Ghana is producing the quality talents for global firms to consider hiring. I choose the latter.” Akugri told TechCabal.
Ghana has 16 regions but its leading tech regions are Accra and Kumasi, the country’s most urban and commercial centres. Of course, this pattern of concentration happens in other African countries like Nigeria where Lagos is the hub or Kenya where it’s Nairobi.
“In the past three years,” Jorge Appiah CEO Kumasi Hive said, “other regions like Tamale, Cape-Coast, Takoradi, Volta and Wa have been developing.”
Internet connection and the use of smartphones help to create thriving tech markets. How does Ghana stack up in this regard?
Its internet penetration stands at 46.5%, which is higher than the African average of 39.3% and its neighbouring West African countries. But it lags behind the world’s average of 58.5% and Kenya’s 85%.
Funding: Cash Flow is increasing
Tech ecosystems are built with a lot of resources — time, people, and mostly money.
Venture capital investment in Africa has grown over the past five years, from $400 million in 2015 to $2 billion in 2019, according to Africa-focused VC fund Partech Africa. But Ghana has been behind South Africa, Kenya, Nigeria and Egypt.
Based on Partech’s 2020 report, the top five were Nigeria ($307 million), Kenya ($304 million), Egypt ($269 million), South Africa ($259 million), and Ghana ($111 million) displacing Rwanda which was fifth in Partech’s 2019 list.
The four markets above Ghana can refer to their population sizes as justification for why they have received more funding. But like other African countries, Ghana can do more to encourage startups to incorporate there and hence attract more venture investment.
A major snag for foreign startups setting up a base in Ghana is the minimum capital requirement. In the case of a joint venture between a Ghanaian and non-Ghanaian, the non-Ghanaian has to contribute at least $200,000. For wholly-owned foreign startups, they need to have a minimum of $500,000 capital.
The threshold increases to $1,000,000 with a minimum of 20 skilled Ghanaians employed if they commence commercial activities in Ghana. Many startups that are bootstrapping do not have access to large amounts of capital.
That said, Ghana is beginning to live up to predictions that it is well-positioned to attract more capital.
So far about nine Ghanaian startups — mPharma, Jetstream, Zeepay, OZÉ, AgroCenta, Redbird, Complete Farmer, BezoMoney and SFAN — have raised money this year, which suggests that more are on the way.
But as funding increases, it’s important for local investors to back the ecosystem.
“I look forward to the first wave of founders becoming the next wave of angel investors. That’s the next tipping point I’m interested in seeing.” Will Senyo, CEO Impact Hub Accra and Venture Partner at Ingressive Capital said.
In terms of local investors, we have the likes of Sangu Delle who runs Golden Palm Investment and Africa Health Holdings, Walter Baddo and Peter Orth of 4DX Ventures, Kwamina Afful of Pave Investments and Ato Bentsi-Enchill of Black Adam Africa Capital Management.
But beyond money, hubs and accelerators help shape an ecosystem. Who plays these roles in Ghana?
Start-up ecosystem builders
Let’s take a look at the country’s leading hubs, accelerators, venture firms, leading entrepreneurs, and other power brokers.
In 2017, the Ghanaian government established the Accra Digital Centre equipped with two hubs – the Ghana Innovation Hub and the Ghana TechLab – to run incubation and accelerator programs for startups.
A product of the Ghana digital centre project, the Accra Digital Centre provides an enabling environment for startups to run their operations. It currently houses 36 startups, which enjoy discounted rent costs (about one-third of the regular rates) with flexible payment plans. David Ofori, Head of Operations at the Accra Digital Centre, says it has become the nerve centre around which most digital innovations are driven in Ghana.
Last year, the Bank of Ghana created an office for Fintech and Innovation, to drive the regulator’s cash-lite, e-payments, and digitisation agenda. An indicator that the government means business. It also launched the Fintech sandbox which gives startups a springboard to try out products without being restricted by license and capital requirements. In September, the Apex bank plans to roll out the first of a three-pilot-phased nation’s digital currency.
In terms of private endeavours, the Meltwater Entrepreneurial School of Technology (MEST) has supported startups for over a decade. In that time, they’ve had startups move on to internationally acclaimed programs like YC, going on to raise significant funding and claiming some exits along the way. Closely related to this is the Catalyst Fund Inclusive Digital Commerce Accelerator, a program that helps six commerce startups scale by providing them with a $120,000 equity-free grant each along with a six-month venture acceleration support.
Established in 2013, Impact Hub Accra is a co-working space that houses over 50 startups yearly and provides a venue for tech events. Beyond supporting startups, it has also inspired the creation of other hubs.
“When Impact Hub Accra started, we were pretty much the only Hub in town,” Kelechi Ofoegbu, COO Impact Hub Accra, said. “Today there are nearly 10 other hubs across Accra and easily over 30 hubs across the entire country.”
In addition to these, the Stanbic Bank Incubator, a corporate social initiative by Stanbic bank Ghana, provides access to training, funding and market for startups. Kosmos Innovation Centre (KIC) is focused on supporting entrepreneurs building agritech solutions.
Outside of Accra, the Kumasi hive which started in 2015, has trained over 1,000 startups so far. A number of established Ghanaian tech companies like Hubtel, Farmerline, Sayetech, Green Afro-Palms began in Kumasi. Notably, Kumasi has also produced a number of Hardware startups like Dext, SolarTaxi, Nastech, Sesi Technologies and Incas Diagnostics.
To increase the participation of women in tech, organisations like StemBees, Developers in Vogues and Soronko Academy are training young women in programming/software development, and connecting them with job opportunities.
Top players and other power brokers
Mobile Money is a big deal in Ghana and telecom giant MTN is the market leader with 17 million registered subscribers and over 200,000 agents across the country. There are other telco players like Vodafone and Airteltigo.
The ride-hailing and logistics space is dominated by the likes of Bolt, Uber, Yango and new entrant Glovo, while Jumia owns the eCommerce space.
While there’s yet to be a major exit, a few companies like mPharma, ZeePay and Appruv have broken out and achieved continental success. Earlier this year, healthcare startup mPharma entered its eighth market in Sub-Saharan Africa while Zeepay acquired a mobile money company in Zambia.
mPharma CEO Gregory Rockson sees his company’s success as a sign of what other Ghanaian startups can do. “I consider our success as an endorsement of the Ghana ecosystem and the fact that startups from Ghana can expand and build market-leading solutions in other countries,” he said.
The Future and opportunities
Beyond what Ghana is today, there’s a lot to look forward to.
Jorge Appiah, who is also the CEO of SolarTaxi, believes the Ghanaian tech ecosystem is in its early days. “The prevalence of fintech means that we’re laying the foundation for other types of startups that will address lifestyle and social issues,” he said.
Idris Bello, the founding partner of Lofty Inc, a Pan-African investment firm that has invested in four Ghanaian Startups, is keeping a keen eye on the growing ecosystem.
“Ghana has calm founders, maybe not as in hurry like their counterparts in Nigeria. If you’re able to build a strong team you can launch into the rest of the continent from there. That’s one of the reasons I’m bullish about finding strong founders with great networks like the folks at Yemaachi and Tendo amongst others.” he said.
“Whoever I’m investing in has to be building for beyond Ghana. There has to be a way to attract diasporans back to build from Ghana for the continent and we’re going to be deliberate about that.”
Miishe Addy, CEO of Jetstream, a cross-border logistic company believes that like Singapore or Switzerland, Ghana’s relatively small domestic market size forces founders to be practical and creative – very early on – about reaching beyond political boundaries.
“Ghanaians have a reputation for a calm temperament and unusual skill in diplomacy,” Addy said.
“Whether the stereotype bears out or not, it’s a thrill to watch Ghanaian founders build bridges into other African markets and continue our long history of bringing the continent together.”
Excited about the momentum so far, Gregory Rockson, CEO of mPharma, points to “a good education system, stability in governance, and a desire to achieve greatness.”
“Ghana can become the Singapore of West Africa where we attract strong tech talent from other countries in the region to continue their career from Ghana,” he said.
Senyo of Impact Hub believes the big opportunities lie in taking tech to the mass market. “There’s still a lot that’s designed for a class that’s tech-savvy. The true win would be taking to reach a larger market,” he said.
The post The dawn of Ghana’s tech ecosystem: Here’s what you should know appeared first on TechCabal.
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I am the CEO of 9JAGISTLAND.My name is Adedeji Timothy and my co-owner is Oyekola Damilare.This blog is born out of our passion to educating to people in all aspect of internet life.We are enthusiastic about writing posts and articles online.
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