Startups are reshaping Africa’s economies, generating opportunities for young people and driving into new markets. Yet their potential is still held back by funding gaps, a shortage of skilled workers and weak infrastructure.
Sub-Saharan Africa faces a spiraling youth employment crisis, with technology startups emerging as a promising, yet geographically concentrated, source of new jobs and innovation.
According to the International Labour Organization (ILO), approximately 27 million young people in the region were unemployed in 2023, representing a jobless rate of 8.9%. Compounding the issue are 62 million NEETs (Not in Employment, Education, or Training), accounting for about one-quarter of the population aged 15 to 24. With over 30 million new entrants expected to join the labor market annually by 2030, pressure is steadily mounting.
Tech's Real Impact: Job Creation Data Confirmed
Recent data confirms that African startups are increasingly impacting employment figures. The African Tech Startups Funding Report 2022 found that the 633 funded startups across the continent employed 34,201 people at the time of their first capital raise, nearly double the workforce recorded in 2021. On average, funded startups employed 54 people in 2022, up from 32 the previous year, signaling a growth in the ecosystem's robustness and absorption capacity.
Nigeria exemplifies this trend. According to Partech, its startup ecosystem alone generated over 19,000 direct jobs in 2022, with nearly half concentrated in fintechs. Egypt followed closely with 11,153 jobs recorded across 131 funded startups that year, while Kenya and South Africa also showed significant job creation levels. These figures show that startups, particularly in the most dynamic digital hubs, are already absorbing some of the young workforce often marginalized by the formal sector.
Persistent Challenges Hinder Widespread Growth
Despite these advances, significant obstacles remain. Partech’s Africa Tech Venture Capital Report 2023 highlighted that four countries—Nigeria, Egypt, Kenya, and South Africa—captured over 80% of the funding raised on the continent. This concentration excludes many young entrepreneurs in still-emerging ecosystems.
The mismatch between training and market needs is another major concern. The World Bank notes that many African companies identify the digital skills deficit as a constraint on their growth. The Brookings Institution estimates that 230 million jobs will require digital skills by 2030, generating a demand for 650 million training opportunities. Furthermore, the issue of sustainability is critical: startups, dependent on financing and markets, remain fragile and often short-lived.
A less visible but equally crucial challenge is inclusion. Barriers to entry for young people without networks or collateral, particularly regarding gender, locality (rural vs. urban), and access to finance, remain serious. Post-training support, market linkage, and sustained entrepreneurial coaching are often insufficient.
Path Forward Requires Strengthened Strategy
Addressing these limitations requires massive investment in training and support. Initiatives like the Orange Digital Centers, 42 Campuses, and the Andela program seek to close the skills gap by offering practical, accessible curricula aimed at aligning youth competencies with actual business needs.
The focus on inclusion remains central. Young women, rural inhabitants, and those excluded from traditional financing often miss out on entrepreneurial dynamics. Without proactive policies to broaden access to innovation beyond the established hubs, the disparity risk is likely to worsen.
Samira Njoya
