The last 3 years have seen the African tech ecosystem grow in leaps and bounds with African (based/focused) startups raising more than $4B in 2021. This is more than the amounts raised in 2019 and 2020 combined. In the last 3 years we also saw a significant startup exit (Paystack) and a number of home grown startups achieve unicorn status. If the few conversations to which I have been privy and the entrepreneurs I have spoken to in the last few weeks are anything to go by, there is no reason why this figure cannot be matched or even eclipsed in 2022, barring any surprises.
Based on the same conversations and my personal observation, there is a significant challenge facing the region that could threaten the growth and long term viability of the tech space in Sub Saharan Africa.
There is no need to mince words here. The challenge is talent.
Talent , talent , talent.
Let’s discuss this using Nigeria as a case study. Though a lot of what I say here could apply to many countries in the Sub Saharan Africa region.
To be honest , this threat is not new. Availability of talent has been a challenge since around 2009 /2010 when it became apparent that tech entrepreneurship could one day become a thing in the region. At the time the nature of the challenge was slightly different. Most of the tech startups were still trying to find their feet and only the biggest names could boast of more than 30 full time developers on their payroll. At the time as a tech entrepreneur, the challenge was to find enough developers to enable your team to grow beyond the 3–5 founding members to the point when you could look to raise or move beyond seed funding. Even though this is still a challenge , the ecosystem has been able to forge ahead somehow. In my opinion, this is largely thanks to what I would call ocean boiling through community oriented initiatives like:
- Efforts on the part of the local entrepreneurs to source and nurture and recruit raw talent
- The massive investments that the likes of Google and Meta (Facebook) have made in the tech community in the last 10 years. E.g Google Developer Groups , Meta Developer Circles and Google Student Clubs
- Entrepreneurs who have seen the business opportunity in solving this problem for their fellow entrepreneurs though startups like Andela, Gabeya ,Semicolon, Moringa School, AltSchool Africa, Decagon, Univelcity, HNG Internship to mention a few
- Grassroot Community driven initiatives like Data Science Nigeria , Data Science Africa, Open Source Africa , She Codes Africa
- Tech hubs and community physical spaces across the region that implement or support a number of talent development initiatives
The obvious question then arises :
Why is there a tech talent shortage in Sub Saharan Africa? Especially given that the region has the youngest population in the world. As always the answer to that depends on who you ask. My take, which is also echoed by many stakeholders, is that the root of the problem lies in the education system.
The root cause
To put it bluntly, when it comes to computer science (and related spaces) education , graduates of most universities in the region who rely solely on what they are taught in school are not equipped with the basics that will enable them kickstart a career in tech. By “kickstart a career”, I mean get hired into an entry level role that enables you to learn on the job. The few that are able to make any headway are those who leveraged extra curricular initiatives like the ocean boiling initiatives above to better themselves. The main exception to this is South Africa that boasts of a critical mass of decent computer science university programs.
If you compare this with regions that have gained a lot from exporting or outsourcing their technical talent like India or eastern Europe, you will find that year after year, their universities continue to churn out graduates who at the very least have the basic skills to kickstart their careers and meet industry demand. And I am not talking about initiatives like the elite India Institutes of Technologies (IITs) that produced the likes of Sundar Pichai, I am talking of even the tier III colleges. Graduates of these colleges come out with enough skills that enable them to get in and learn on the job. This is the force that has powered India for decades now . Not so in most of Sub Saharan Africa. That the ecosystem has achieved the milestones mentioned in the beginning of this article is testimony to the amazing resilience of everyone involved.
The salt in the wound
But you may say that this has been the case for a while now, so what changed? If you are familiar with the African ecosystem please skip to the next section as there is not much to learn here, if you are not then permit me to share a few reasons that come to mind.
We have established that what should be the biggest talent conveyor belt (the education system) has major issues in the region. I believe that in the last few years, this has been made worse by the following:
Ecosystem Growth and Expansion
The ecosystem is becoming a victim of its own success. While the ocean boiling initiatives mentioned earlier have moved the ecosystem forward in spite of the talent challenges, the problem has also mutated like a stubborn virus and scaled with the ecosystem. In the past, the big challenge for tech entrepreneurs in the region was about scaling your dev team from 3 developers to 10. While that is still a problem, we now have startups who are fresh from raising successful seed rounds looking to scale from 10 to 20 developers and others who are beyond the seed stage looking to scale from 20 to 50 or more developers.
Just 5–6 years ago, you basically had a few medium sized startups like Konga and Andela competing for the best tech talent with some of the traditional companies like the telcos and the banks as they were able to match them in terms of compensation and benefits. The rest of the tech ecosystem was left to make do with whatever these companies left behind. The game has changed. With the amount of funding coming in these days and the crazy demand for talent, it is not strange to see talent moving from these established companies and startups to much smaller companies once the price is right.
Brain drain and remote work
We have all heard that talent is evenly distributed but opportunity is not. But then consider that there is the kind of talent that seeks out or creates opportunities where there are none. Most of the tech talent in the region that we see today are self starters who have persevered against considerable odds to grow and better themselves. They are the Ninjas or Navy Seals because in the bid to survive and grow, they developed traits that make them able to adapt and operate in any environment. This makes them highly sought after not just in a place like Nigeria or Africa but globally. Sometime around 2014 to 2016 when Andela began to take off and Mark Zuckerberg visited the region, the rest of the tech world was clued into the existence of this talent. Their interest was piqued and it did not take them long to figure out that anyone who could make progress in the face of this level of adversity must indeed be a ninja. This led to a lot of tech talent landing jobs with companies in Europe , the US and Canada initially as one off gigs on platforms like Upwork and Toptal and quickly evolving into full time gigs with the talent relocated to the country in question or remote work where the talent could work from any African country and earn a salary in USD or GBP (a.k.a the expat’s dream). All of this to the detriment of the local tech company that is not able to compete in terms of compensation. This has not been helped by the fact that some of the countries in the region (e.g. Nigeria) witnessed a sharp economic downturn that encouraged many people who ordinarily would not have done so to seek better opportunities for themselves and their families abroad.
The pandemic and the great resignation
It is no longer news that the Corona Virus affected so many aspects of the business world. One of these aspects was people management and recruiting. First of all remote work went from being a thing to becoming THE thing as companies realized that you did not actually need to have all your talent in one location (Silicon valley, New York, London, Berlin etc) to build great products and so all of a sudden, companies that earlier hesitated to hire those Ninjas from Nigeria or Ghana because they were not willing or able to sponsor their immigration were now more inclined to do so. Add to this the trickle down effects of the Great Resignation which made the labor market even more competitive and forced many of these companies who would not ordinarily have done so to consider talent from far and wide. Given the ever increasing cost of talent from India and eastern Europe, Africa is becoming a leading search destination for recruiters looking for quality talent.
The solution? Two schools of thought
So what is the way forward? How can the talent risk be mitigated? From my conversations, I have been able to distill two main schools of thought.
One school of thought (School 1) says that the governments should do the right thing and invest in education. The thinking is that there is no way that a country or region can produce tech talent at the scale required to achieve similar results to India and China unless there is a deliberate attempt to increase investment in education at all levels. This school of thought will tell you that no matter how impactful and well intentioned the ocean boiling initiatives are, they cannot and will never achieve results on the scale needed to address what many now see as an existential threat facing the ecosystem and the sooner the government gets its act together, the sooner this challenge can be addressed.
The other school of thought (School 2) says that whoever is waiting on the government to wake up and fix things is going to wait for a long , long, long , long time (or as we say in Nigeria “is on a long ting”). And given the situation, the only hope is through self help i.e. boiling the ocean. The thinking here is that if we figure out a way to get more heating elements in the ocean , we can get the Atlantic to boiling point. If we could get a tech (developer, data science , product manager etc) community chapter and a tech hub in every town, then we might be able to produce talent at the scale that would rival or surpass that of the formal education system. In fact some ardent subscribers to this school of thought would go as far as telling you that the formal education system will likely be disrupted by the community.
So which school of thought do I subscribe to?
I will confess that given the roles I have been privileged to play in the region at various times in my career, I have at different times subscribed to one of the above schools of thought or the other. Reason is that this is a complicated and hairy problem. Some would say it is “a wicked problem”.
Advocates of both schools of thought should keep pushing because a hairy and multi-dimensional problem such as this cannot be neutralized by just one silver bullet, but by a load of lead bullets.
So permit me to add another lead bullet to the arsenal. My goal here is mainly to prove that there are many ways of approaching this problem and hopefully inspire us to look at the challenge from yet another angle and perhaps arrive at a 3rd school of thought.
One more lead bullet
I agree with School 1 that there are limitations to what can be achieved by the community led initiatives in terms of scale and predictable outcomes when compared to what could be achieved by getting things right with the formal education system. But then I also agree with School 2 that the urgency of the situation and the high stakes (possibly the future of an entire generation) is such that waiting on government to invest in the education sector and for those investments to bear fruit is at least a 5–10 year journey (that is assuming the right policies come into play the day after I publish this article).
My suggestion is effectively a turbocharged version of School 2.
What can we learn from the past?
Sometimes the way to the future is hidden in the past. Is there something we can learn from two of the leading sectors in Nigeria?
After the banking sector deregulation in Nigeria in the 90s and the rapid expansion of the banking sector, the banks found themselves in a similar space as there was a talent shortage though for slightly different reasons. But the bottom-line was that there were not enough banking and finance graduates to meet demand. The GSM telcos (MTN and Econet Wireless) faced a similar challenge when they were granted licenses to operate in Nigeria in the early 2000s as there were barely any GSM engineers in the country. The most that the country could boast of at the time were a few hundred networking engineers working at the likes of Telnet (the country’s leading networking infrastructure service provider at the time) and a number of internet service providers and networking companies across the country. This was nowhere close to what was required to rollout a network that would connect the 120M people of Nigeria.
So what did they do? Pack up and go home?
They were able to implement and roll out (graduate) trainee programs (e.g. GTB training school and the MTN Global Graduate Development Programme) that have today turned into conveyor belts of banking , business and network engineering talent powering the banking and telecom sectors that have grown to be among the most formidable in Africa. Products of these programs are today adding value to so many sectors of the economy not just within the banking and telecom sectors but across other industry verticals within and outside Nigeria as alumni of these programs carry their skills to other sectors and countries.
A couple of things to note here.
These training programs were not sponsored by the corporate social responsibility or “for good” arms of these companies. They were funded and implemented as part of top company business priorities.
These programs have been successful even though not everyone who attended these programs ended up building a career in the said bank/telco (or even in banking or telecommunications in general)
So what can we learn from this?
I think there is an opportunity to do the same in the tech space.
Imagine building out similar programs aimed at equipping motivated people who have little or no tech skills with the basics that they need to create value for an employer.
Sound familiar ? Some would say that sounds like some of the community initiatives mentioned earlier in this article. Specifically the likes of Andela, Gabeya ,Semicolon, AltSchool Africa, Decagon, Univelcity , HNG Internship and the Google Africa Developer Scholarships.
I would agree but I would also point out that there are two key differences.
First is the probability of getting hired after going through the training and second is the potential to scale. Both are connected in the sense that the higher the probability of getting hired when one goes through the program , the more scalable the program can become. The higher the probability of getting hired after completing the training and meeting all requirements, the more people are incentivized to participate. But it’s a bit of a chicken and egg because you need to find an organization (or organizations) with the capacity that can absorb the talent and that is willing to invest in this for it to make sense. This, in my opinion, is the brick wall that many of the above organizations have come across which has limited their ability to scale.
So what to do?
This is exactly why it has to be a corporate funded training program / initiative where the aim is to provide tech talent for the organization(s) funding the program. This will close the loop and lead to the synergy required to drive the scale that is needed. It’s that simple (right? ). With the right synergy a model like this could yield tangible return on investment for all stakeholders in as little as 18 months.
The good news is that thanks to all the ecosystem initiatives that are already taking place, the foundation is already laid and the land is not barren relative to the 90s and early 2000s when the banking and telco revolutions were struggling to take off.
So which corporations would be the one to sponsor this and what is in it for them?
What’s in it for …?
Permit me to share some ideas of some organizations that might want to do this and why it could make business sense for them to do it.
Banks, Telcos and Insurance companies
They have the deep pockets to make it happen but why would they? Well, the reality is that the successful bank, telco or insurance company of the future is the one that sees itself not as a bank, telco or insurance company but as a digital company with a banking, telco or insurance license respectively (or even all three licenses ) . Somehow this is not yet apparent to many banks, telcos and insurance companies of today but the day of reckoning is not far off. If you doubt me, talk to a Kenyan or Ghanaian banking exec about the impact of Mobile Money or any telco exec about the impact of VOIP or any Nigerian banking exec about fintech. The truth is that digital convergence as predicted in the 90s is not just real, but is happening right before our eyes and only those organizations that are able to innovate (at scale) will see the new dawn. To innovate at scale, you need talent at scale. Some telco , banking and insurance execs who think they get it want to achieve the same goals with offshore outsourcing , well here is a newsflash: When it comes to building, deploying, scaling and sustaining innovative solutions, offshore outsourcing can only take you so far take you so far (this is probably worth an article on its own). If you want to operate at scale, you need to begin to build a solid pipeline of local talent simply because it is way more efficient and economical. For context, when I wrote this Airtel India had about 530 open software engineering roles. Makes you wonder what they are building and why they have not outsourced those roles?
Venture Capital Firms
This is indeed an interesting one. Please hear me out. Why would a VC be interested in investing in training talent for the sake of the talent vs investing in a talent training company for the returns that come from training talent? Well I can propose one good reason. Whenever I ask any of my Investor friends (especially the ones focused on Sub Saharan Africa) what challenges they are facing apart from finding the right deals, talent is something that always comes up. They are thinking of how to secure talent for their portfolio companies. Sometimes they are able to help with sourcing senior talent i.e. Director level and above but have not figured out a scalable way to ensure that their portfolio companies have the required pipeline of software engineers, devops , product and program managers needed to deliver the required ROI. Here is a radical math problem. If you are a VC and you have invested up to say $10M — $20M in African startups , would it make sense to invest 1% of that amount in an initiative that would create a direct pipeline of talent for your portfolio companies and make it one less thing for your CEOs / CTOs / Founders to worry about? I know that is not quite how funds work (I am a novice in these things) but someone who is good with spreadsheets should do the math and tell us if the ROI makes sense or not.
Whenever there is a conversation around a major investment needed in the tech sector in emerging markets, sooner or later someone would ask “why doesn’t <insert name of your favorite Big Tech company here> do it? After all they can afford to do so and they are gaining so much from our country”. The talent conversation is no different. The big tech companies could certainly gain from investing in creating this conveyor belt of talent in the region as indeed some of them have (See the initiatives mentioned above). There is a slight difference though. Most of these initiatives are targeted at creating builders who build using the tools of these tech companies which is different from creating builders for hire by the said tech companies. The second scenario will only happen as these companies look to establish or expand their engineering presence in the region and until that happens, it may be tough to make a hard case to train talent for direct hire. The recent initiatives by Microsoft’s Africa Development Centre and Meta’s new product experimentation team are a step in this direction and as they look to expand, there will be a need to invest in development of local talent for hire at scale. Until this happens, the dream of reaching the “next billion” or “unconnected” with locally relevant tech will remain just that, a dream.
To close this out (assuming you are still reading up to this point) , let me paint a picture of one way this could work.
What if a corporate like MTN Nigeria or GTBank strikes a partnership with one or some of the training initiatives mentioned in this article (or even acquires one of them) and commissions them to run a training program that feeds straight into their recruiting pipeline? Basically all they need to do is to specify the skills they need (with an eye to where the world is going) and figure out a way to hire the best of the best. If they feel that they do not have the capacity to manage the recruited talent within their company structure just yet, there are models that help with this too as pioneered by the likes of Andela.
A VC could do the same, i.e dedicate some budget towards a partnership with some of these talent factories that would guarantee a pipeline for their portfolio companies.
The biggest barrier to this working is that the Banks, telcos, Insurance companies and VCs do not believe that this investment will yield the desired returns. While I see their point, I would caution that whoever figures out a solution to this talent problem first will probably leave the rest choking in their dust.
And if you are among those left behind choking, you will figure out soon enough what many before you learned the hard way.
Dust is not nutritious.
If you made it to this point, here is your reward, and remember I wrote this just as a conversation starter and I am always open to reading different perspectives and counter arguments.