Google Announces $1 Billion Investment in Africa

Rabat – The developing world holds the greatest potential as a growth market for large internet companies, and the largest tech giant, Google, recently outlined its strategy to take advantage of this potential.

Google announced a $1 billion (MAD 9 billion) investment through an event named “Google for Africa” to support “digital transformation” in the African continent. The plan will include landing a subsea cable on the continent to speed up internet speeds for small businesses, offering low-interest loans to small businesses, investing in African startup companies, providing skills training, and more.

Sundar Pichai, Google and Alphabet CEO, led the announcement of the plans – positioning the company’s most senior executive at the helm of the event is a reflection of the high priority Google is placing on the initiative.

“We’ve made huge strides together over the past decade — but there’s more work to do to make the internet accessible, affordable and useful for every African. I’m excited to reaffirm our commitment to the continent through an investment of $1 billion over five years to support Africa’s digital transformation, to cover a range of initiatives from improved connectivity to investment in startups,” said Pichai.

With the initiative, Google says it plans to invest in projects that will be implemented across the continent, including in Nigeria, Kenya, Uganda, and Ghana.

Africa will be connected to Europe via the subsea cable that crosses South Africa, Namibia, Nigeria, and St Helena. Nitin Gajria, Managing Director for Google in Africa, said the cable would provide a network connection with approximately 20 times the capacity of the last cable built to serve Africa.

“This will lead to a 21% reduction in internet prices and increase internet speed in Nigeria and almost triple in South Africa,” said Gajria.

As the digital economy grows in Africa, it is projected that about 1.7 million jobs will be created in Nigeria and South Africa by 2025.

Announcing the launch of the Africa Investment Fund, Google stated that it would invest $50 million in start-ups operating on different continents, giving them “access to Google’s employees, network, and technology in order to help them build meaningful products for their communities.”

In accordance with the fund’s investment thesis, Google’s managing director said that the company has no preference for any specific sectors or countries.

Even though Nigeria, Kenya, South Africa, and Egypt are all among the Big Four in terms of startup and venture capital activity on the continent, the accelerator accepts startup applications from nations and regions that are less-funded and overlooked.

These countries include Botswana, Cameroon, Ghana, Morocco, Rwanda, Tanzania, Tunisia, and Uganda, to name a few.

“We are not restricting ourselves to certain verticals. We are focusing on investments where we believe that Google could add value,” Gajria said. “If there are founders building interesting products solving real challenges in Africa, that would fall squarely within our investment thesis.”

The tech giant added that it will also provide an additional $10 million in low-interest loans to small firms in Nigeria, Ghana, Kenya, and South Africa, with the goal of alleviating disruptions caused by the COVID pandemic. The project will be conducted in collaboration with Kiva, a nonprofit San-Francisco-based lending organization. The institution has pledged $40 million to nonprofit organizations dedicated to improving lives in Africa.

“I am so inspired by the innovative African tech startup scene. In the last year, we have seen more investment rounds into tech startups than ever before. I am of the firm belief that no one is better placed to solve Africa’s biggest problems than Africa’s young developers and startup founders. We look forward to deepening our partnership with and support for, Africa’s innovators and entrepreneurs,” Gajria said.