The Leapfrog Model: Venture Capital as a Cure to Africa's Funding Paralysis

Abstract

Based on current trends, Africa’s population is projected to double in size by 2050. Lagos leads this exponential population explosion as the fastest growing city in Africa, growing at 77 people per hour. By 2030, Africa’s middle- and high-income groups are expected to grow by 100 million. Africa’s 1.1 billion population is expected to have doubled in 2050 and quadrupled in 2100. This significantly increases the consumer population and makes Africa a rapidly expanding market that attracts investors. Despite these projections, the African continent is palpably unprepared. This paper argues that the financing of startups in critical sectors of Africa's economy through incentivized venture capital funding can be strategic in developing Africa's economy.