Three breakthrough innovations—financial, ecosystem, and social—could unlock prosperity for over one billion Africans left behind by traditional development approaches.
There is a word that perfectly describes the condition of most Africans: nonconsumption. Nonconsumption is the inability of a person or business to purchase and use (or consume) a product or service required to help them overcome a struggle. And in Africa, nonconsumption is everywhere. This phenomenon is often attributed to the cost, complexity, and inconvenience of existing products on the market.
On a macro level, Africa’s nonconsumption is vast. Despite contributing almost 20% to the world’s population, its share of global GDP and global trade are both less than 3%, and global foreign direct investment (FDI) to the continent hovers between 4% and 6%, but trending down. This means that most Africans wake up everyday and experience struggle without the ability to “consume” appropriate solutions to make progress. This makes for an incredibly difficult life.
The vastness of the continent’s nonconsumption can be seen in virtually every sector. In agriculture, fertilizer usage per hectare is 26 kg compared with the global average of 119 kg; fewer than 5% of land cultivation is mechanized; and less than 10% of farmers have access to appropriate financing. This translates to low consumption of foods such as chicken (7.25 kg per capita vs. the global average of 17 kg per capita), eggs (2.35 kg per capita versus the global average of 10.3 kg per capita) and fish and seafood (10 kg per capita versus the global average of 20 kg per capita).
In finance, credit to the private sector is only 33% of the continent’s gross domestic product while the global average is 147%; credit per capita is $590 while the global average is $19,000. In healthcare, the data is even more sobering: 15 million people are forced into poverty annually due to medical bills arising from health care issues. Education, a sector supposed to give and inspire hope in future generations is just as painful as 80% of African youth in school aspire to work in high skilled occupations but only 8% do.
On a micro level, the normalization of nonconsumption across Africa is the normalization of suffering for Africans. And the sheer ubiquity of it suggests there is significant opportunity to create new consumption that can help more than one billion people live more flourishing lives. Solving Africa’s nonconsumption challenge, however, requires these three innovations at scale.
Financial innovation: Crowding in capital
Leveraging philanthropic capital to crowd in additional investment is critical for solving nonconsumption in Africa. Research has shown that, for every dollar of concessional capital, four additional dollars can be mobilized in Sub-Saharan Africa. Considering the opportunity to target widespread nonconsumption across Africa, investing in financial innovation that has the potential to quintuple philanthropic capital’s impact will be well worth it.
Philanthropy alone, no matter how well-intentioned, is insufficient to solve the deeply entrenched structural challenges that underpin poverty; the scale of the problem far exceeds the pool of available philanthropic resources, which accounts for approximately half a trillion dollars globally, compared to more than $210 trillion in global investable capital. However, philanthropic capital can play an essential catalytic role—it can absorb early risk, validate innovative models, and venture where pure private sector capital is unwilling to go and de-risk investments.
Ecosystem innovation: Boosting productivity
I explained the importance of ecosystem entrepreneurship in a prior blog. Progress in Africa cannot be achieved without improving the ecosystem in which millions of micro-entrepreneurs find themselves. Sub Saharan African economies are only 8% as productive as high income countries. This structural unproductivity severely dampens every dollar invested in the region’s many micro-entrepreneurs. As the Economist put it, Africa has too many businesses, too little business. Africa has too few ecosystem entrepreneurs.
Ecosystem entrepreneurs are interconnected networks of people, resources, and organizations necessary to solve a specific problem that creates value for a specific group of people in society. These entrepreneurs are often motivated by access and empowerment of others, including micro-entrepreneurs. They often provide products and services, at scale and at low cost, to a majority of the citizenry.
Their activities include mass production, marketing, distribution, financing, standardization, specialization, and others. They reduce the cost of production and effectively increase productivity. In doing so, they increase incomes for people and improve affordability. Another term for them is market-creating entrepreneurs. They make complicated and expensive products simple and affordable so many more people can afford them. I’ve written about them here.
By investing in ecosystem entrepreneurs, philanthropic partners are directly accelerating the impact of the localized ecosystem solving nonconsumption in Africa.
Social innovation: Fairly distributing value
Most Africans, especially women and youth, own a disproportionately small share of assets compared to their global counterparts. This severely limits their ability to build wealth and participate fully in the economy. As a result, they live in perpetual poverty regardless of how hard they work.
Across Africa, approximately 80% of women in the workforce are engaged in vulnerable employment–jobs that lack social protection, safety nets, or security to guard against economic shocks—making them more susceptible to falling into poverty. In Nigeria, for instance, just 2.5% of Nigerian women own a home by themselves, and 6.6% own one jointly. Youth, meanwhile, face even steeper barriers to accumulating meaningful assets, largely due to limited access to credit, education, and formal employment opportunities.
By designing a system that more fairly distributes value to the millions of new workers necessary to solve Africa’s nonconsumption challenge, philanthropists can unlock a pathway for them to access the broader socio-economic benefits of entrepreneurship and asset ownership from which they have long been excluded. In doing so, this innovation doesn’t just expand incomes in the short term; it builds enduring economic security, improves intergenerational wealth prospects, and strengthens the foundations for more inclusive prosperity. Given the vast nonconsumption across Africa, this more inclusive path to prosperity could become the new standard for development in the world’s youngest continent. Harvey Koh and Laura Amaya have written about this here.
The scale of Africa’s nonconsumption is daunting—but it is also the greatest opportunity of our time. These three innovations—financial, ecosystem, and social—can light the path forward. The question is no longer whether Africa can rise, but whether we will innovate in ways that allow it to create inclusive prosperity.
