Africa’s entrepreneurial ecosystem raised $1.5 billion in equity in 2024. To a layman, it is huge and quite impressive. However, experts have knocked the continent for underperformance.

Statistics show that Africa contributes about five per cent to global gross domestic product, GDP, and boasts of an 18 per cent contribution to world population.

So, experts are arguing that attracting just $1.5 billion, which is mere 0.6 per cent of the global $275 billion funding attracted in 2024 underscores a broader challenge. It shows that Africa’s funding levels do not align with its size and stature.

They  wondered why a continent, home to 1.4 billion people, could attract roughly the same start-up funding as Miami ($1.8 billion),which is the 12th highest equity-raising city in the US last year.

According to Head of Mobile for Development at the GSMA, Mr. Max Cuvellier Giacomelli, this disparity reflects a persistent gap in the global investment landscape. While talent is universally distributed, opportunity is not, and many investors continue to underestimate the potential of Africa’s entrepreneurs and markets, missing transformative opportunities in the process.

Performance in context

In 2024, Africa’s equity fundraising declined by 11 per cent year-on-year (YoY), aligning with global funding trends that showed a modest 4 per cent YoY growth. When compared to other regions, Africa’s performance was mixed:

Asia: A significant decline of 27 per cent YoY, driven by China’s sharp contraction (-56 per cent). However, India, a market comparable to Africa in population and GDP, experienced strong growth (over 40 per cent).

North America: Growth of 21 per cent YoY.

Latin America: A 9 per cent YoY increase.

Despite the contraction, Africa’s resilience stands out when viewed over the longer term. Comparing 2024 to pre-heatwave funding levels in 2020, Africa recorded remarkable growth of 62 per cent ($1.5 billion vs. $0.9 billion). In contrast, other regions such as Latin America (-33 per cent), Asia (-54 per cent), and notably China (-78 per cent) remain well below their 2020 levels. Even globally, start-up funding contracted by 11 per cent over the same period, while Africa emerged as the only real outlier with sustained positive growth.

A silver lining

Africa’s long-term performance highlights its potential as a dynamic and evolving market for investors. While the continent still faces challenges in attracting equitable funding, its resilience and recovery underscore the strength of its entrepreneurial ecosystem.

Investors must rethink their approach to Africa, recognising the untapped opportunities that lie within its markets. With consistent support, Africa’s entrepreneurs can drive innovation and deliver transformative solutions that resonate globally.