Expanding to the IT sector in Africa? Consider this trusted market entry strategy

$1.5 trillion.

This is the impressive amount that AI and other emerging technologies are expected to contribute to Africa’s GDP by 2030 – a timeline only 5 years away.

Currently, funding for this sector is also growing:

The IT sector in Africa is undergoing a powerful surge, a trend that only seems to be looking up. But how do you expand in Africa from here?

How do you turn your vision into reality, how can you lay down the groundwork now to reap the benefits of this booming sector in time?

Employer of Record (EOR) – A low-risk, low-effort market entry strategy

Risk is part and parcel of any expansion strategy, regardless of the sector you expand into.

While there’s no such thing as a completely risk-free approach, it is possible to minimise risk significantly, and that’s exactly what an Employer of Record (EOR) in Africa offers.

A compliant and proven market entry solution, the EOR model is trusted by listed multinationals, NGOs, and SMEs alike. This is because it is low-effort, low-risk, and low-commitment.

An African EOR like Africa HR Solutions will:

• Take care of admin
• Absorb employer-related legal risks
• Offer vital local market and cultural insights

Here are 4 key ways an African EOR supports low-risk expansion into the IT sector across Africa:

1. No local entity required

With an EOR in countries like Nigeria, there’s no need to register a local company. The EOR provides the legal framework so you can operate compliantly, while maintaining full control over your team.

Employees are legally employed by the EOR, but you manage them as your own. The EOR carries the legal responsibility for employment matters.

This enables much faster market entry (weeks instead of months) and avoids extra costs, such as office setup, which some countries require for legal entities.

Exiting is also simpler, without the red tape of closing a company.

2. Hire local talent at local rates

Working with an African EOR gives you access to qualified professionals at local market salaries. Instead of relocating expensive international staff or consultants, you can build a capable local team.

For example, hiring a marketing manager in Nairobi or Accra could cost significantly less than in London, while still delivering excellent quality. Local hires also bring cultural fluency and deep market understanding.

An EOR helps you avoid inflated costs while building strong local teams.

3. Stay compliant, avoid penalties

Labour laws in Africa vary greatly and can be complex. Mistakes in compliance, contracts, taxes, benefits, or terminations can lead to fines or reputational damage.

An EOR stays up to date with all legal obligations and handles these on your behalf. Whether it’s Kenya’s statutory contributions (e.g. NSSF, NHIF) or South Africa’s strict labour protections, the EOR ensures you’re fully compliant from day one.

You can focus on business growth without navigating local legal systems.

4. Outsourced payroll

Payroll in Africa can be tricky: varying tax rules, fluctuating exchange rates, and in some cases, manual processes.

An EOR handles the entire payroll process, including salary calculations, deductions, tax payments, and payslips in local currency. There’s no need for you to open bank accounts or invest in country-specific software.

This ensures your staff, whether in Nigeria, Kenya, or South Africa, are paid accurately and on time, every time.

5 African countries consider for expansion in the IT sector

1. Kenya: The Silicon Savannah

Kenya is a leading African tech hub, with Nairobi at its heart. The government backs innovation through projects like Konza Technopolis, a planned smart city under Vision 2030.

• Market: Over 66 million mobile subscriptions and groundbreaking platforms like M-Pesa show Kenya’s digital potential. The digital economy is set to contribute 9.24% of GDP by 2025.
• Support: Government initiatives such as the National Broadband Strategy improve access and quality.
• Infrastructure: Connected via undersea fibre-optic cables, Kenya offers solid internet connectivity.

2. Nigeria: The African giant

With over 200 million people, Nigeria offers Africa’s largest consumer market. Lagos leads its tech scene and is dubbed the “Silicon Valley of Africa”.

• Market: Over 100 million internet users make it a prime IT and telecom market.
• Investment: Attracts global interest, particularly in fintech (e.g., Paystack, Flutterwave).
• Ecosystem: Yaba is a hotspot for startups, education, and innovation.
• Success: Nigeria hosts Jumia, Africa’s biggest e-commerce platform.

3. South Africa: The technological pioneer

South Africa is a well-established tech leader, with Johannesburg and Cape Town at the forefront.

• Infrastructure: Among the best in Africa, with the 2nd fastest internet on the continent. Over 41 million internet users.
• Maturity: An advanced digital economy with 80% internet penetration.
• Talent: Strong focus on tech education and a highly skilled workforce.

4. Rwanda: The rising star

Though smaller, Rwanda is making big moves in tech, driven by its vision for a knowledge-based economy.

• Initiatives: Projects like Kigali Innovation City and a $100M Innovation Fund support startups.
• Connectivity: Extensive 4G coverage and growing fibre network.
• Business Climate: Ranked 2nd in Africa and 38th globally for ease of doing business.

5. Egypt: The gateway to the Middle East & Africa

Strategically located, Egypt bridges Africa, the Middle East, and Europe, with a growing tech ecosystem centred in Cairo.

• Market: Over 100 million people offer vast demand for IT and telecom.
• Support: Government backing through initiatives like TIEC to boost entrepreneurship.
• Location: Ideal for regional operations and market access beyond Africa.

Choose an African Employer of Record (EOR) partner with IT industry expertise

Africa HR Solutions is a trusted African EOR backed by the ADvTECH Group, with deep experience supporting businesses in technology and digital sectors across the continent. With over 15 years’ experience operating in 46+ African countries, we understand the unique needs of IT companies: from scaling tech teams to navigating local compliance.

Whether you’re expanding into software development, cloud services, fintech, or telecoms, we have the expertise to support your growth.

Speak to one of our consultants today to learn how we can help you establish a compliant, low-risk IT presence in Africa.