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


Oct. 13, 2022, 1:30 p.m.

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.

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The suffering of African Tech startups.

According to a recent report by, Ghanaian company DOBIISON, a virtual reality startup, is struggling to stay in business due to the rising cost of fuel which has made traveling around Ghana, an essential part of its business, costlier.

DOBIISON helps businesses across Ghana boost their online presence and also helps them drive conversation by creating interactive virtual reality and digital experiences for their products and services.

Selasie Awitym, the startup's founder, said the free-falling cedi is hurting the business because the startup pays some of its contractors and buys equipment in dollars. Seeing that earning in cedi is not sustainable for the business, the startup started charging its clients in dollars instead of exclusively in cedis.

Jetstream, a Ghana-based tech startup that moves and pre-finances cross-border shipments, has doubled the revenue from its double-pre-financed logistics business from 2021.

As Ghanaian exporters pay more to export their goods abroad due to the rising exchange rate, it also takes weeks to get dollars to pay their suppliers and global carriers. So they turned to Jetstream, who earmarked $1 million for SME exporters that are hit the hardest.

To deal with this influx and ensure it is not losing money, Jetstream, which raised a $3 million seed round in June 2020, is making its lending less risky by ensuring that it only funds cargoes it can control through its logistics team.


tag: SMEs, 54gene, African Tech Startups, DOBIISON, Kuda, Jetstream,


Enoch Siaw Ntiamoah Author

Enoch is a content writer for Digital Times Africa, who is passionate about writing interesting topics in Entertainment, Sports and General News