The Current Unstable World Economic Situation, A Torment to African Tech Startups

Over the last few years, the African startup ecosystem has been bustling with innovative projects and ideas in areas such as health, agriculture, finance, and other reliable tech sectors. Most of these startups have done incredibly well in business, raising significant figures, and some are still predicted to raise more income in the future.

But the increasing economic woes in the world are taking a toll on many of these tech startups, making it difficult and unhealthy to stay in business. The unstable economic distress that has hit the world due to the Covid-19 pandemic and the recent Russia-Ukraine war has forced the world into a tight economic unstable position.

The African tech ecosystem has tasted its fair share of the current economic situation, forcing many tech companies into a problematic situation and causing them to cut costs. The decision to lay off some staff members, pay cuts, and other unforeseen decisions has been some of the difficulties companies have had to go through. Last month, Nigerian startups Kuda and 54gene reportedly laid-off workers, while Kenya's Marketforce also let go of some of its workers in August. Meanwhile, staff at Quidax, Eden Life, and GetEquity are also reportedly taking salary cuts.

Furthermore, the rise of inflation in Ghana is taking a toll on many companies. Ghana's inflation rate in the last 11 months has kept hitting higher numbers. According to Blomberg, Ghana's inflation rate hit 31.7% in July, up from 29.8% the previous month. The highest figure the country has recorded in the last two decades.