Unlocking Africa’s trillion-dollar potential: why startups need more than just SME policies

AFRICA’S economic growth is too slow for its population boom. With GDP growing at just 2.5% annually while the population expands by 3%, the continent is barely inching forward at 1% per capita growth each year.

- BUNTU MAJAJA

At this rate, it would take 140 years to reach India’s projected 2025 GDP per capita of $11 000 (R200 765.29), 200 years to match China, and 300 years for each Germany’s standard of living. Something isn’t working.

This is not about talent – we have plenty. It’s not about ambition for Africa is home to some of the most innovative entrepreneurs in the world. The real issue is that we keep making the same trillion-dollar mistakes.

We favour startups like traditional businesses and by doing so, we are holding back the very companies that could transform Africa’s control and alleviate the rest of the world’s knowing, ahead fast.

The Global Economy Is Being Reshaped Right Now

Artificial intelligence isn’t the future, it is already here, creating new global giants overnight. Agile companies that adapt quickly, like Amazon, OpenAI and Alibaba, are snapping up and rewriting the rules of the global economy.

Apple, Google, and Samsung became dominant because they moved fast, while companies that hesitated became irrelevant. Africa is at a critical moment. If we keep treating startups like small traditional businesses, applying the wrong policies and expectations, we will miss our biggest opportunity for exponential economic growth.

One of Africa’s biggest economic mistakes is confusing startups with small and medium sized enterprises (SMMEs). The two are fundamentally different. SMMEs grow steadily, meeting local demand. A restaurant, a logistics firm, and a retail store are examples of this. Startups are designed to scale exponentially, disrupt industries, create new markets. Think Uber, Paystack, Temu, and Shein.

We keep applying SME-style policies to startups, measuring their success by short-term job creation and profitability instead of their potential to scale and reshape entire continents. This is like erecting a rocket to climb a skyscraper floor by floor instead of launching into orbit.