Google to invest $1 billion in Africa over five years

Google plans to invest $1 billion in Africa over the next five years to ensure access to fast and cheaper internet and will back startups to support the continent’s digital transformation, Reuters reported.

The unit of U.S. tech company Alphabet Inc made the announcement at a virtual event where it launched an Africa Investment Fund, through which it will invest $50 million in startups, providing them with access to its employees, network and technologies.

“We are specifically looking at fintech logistics, e-commerce, local language content but again we are not limiting ourselves to these verticals but we are really looking at this across a number of verticals. We are looking at areas that might have some strategic overlap with google and where google could potentially add value in partnering with some of these startups,” said Nitin Gajria, the managing director for Google in Africa

According to the report in collaboration with not-for-profit organisation Kiva, Google will also provide $10 million in low interest loans to help small businesses and entrepreneurs in Ghana, Kenya, Nigeria and South Africa so they can get through the economic hardship created by COVID-19.

Small businesses in Africa often struggle to get capital because they lack the necessary collateral required by banks in case they default. When credit is available, interest rates are usually too high.

Google said a programme pioneered last year in Kenya in partnership with Safaricom that allows customers to pay for 4G-enabled phones in instalments would be expanded across the continent with mobile operators such as MTN, Orange and Vodacom.

Gajria said an undersea cable being built by Google to link Africa and Europe should come into service in the second half of next year and is expected to increase internet speed and lower data costs, Reuters reported.

“We are expecting a 21 percent reduction in data cost, we are expecting 3-5 times faster internet speed in South Africa and Nigeria, as an example. We are also expecting job creation about 1.7 million jobs to be generated across South Africa and Nigeria through both directly in the digital sector, but also in the peripheral sectors.” Nitin Gajria said.

The team also launched the project ‘Cradle of Creativity’ under the Google arts and culture product to promote African ancient and contemporary art works digitally.