Seeds of Opportunity: The African Growth Series
March 2024 | Issue 1
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: Digital Transformation in Agriculture
- AFRICA OPPORTUNITY: Unlocking Africa's AI Potential
- AFRICA OPPORTUNITY: Africa’s Eurobonds are Beginning to Pay Off (And Out)!
- AFRICA OPPORTUNITY: Insights - Cape Town's 1st Annual SWAN Smart Water Metering Workshop
AFRICA OPPORTUNITY: Digital Transformation in Agriculture
Africa's agriculture sector is poised for a technological revolution. Emerging innovations in AI, precision farming, and blockchain offer the potential to boost yields, enhance sustainability, and increase food security for the continent and the world.
Key innovations include AI-powered solutions that optimise crop selection, predict and mitigate pests and diseases, and safeguard livestock health. Additionally, precision farming techniques enable targeted irrigation, fertiliser application, and resource management for increased efficiency and sustainability. Finally, blockchain traceability offers solutions for ensuring food safety, meeting evolving consumer demands, and adhering to strict regulations.
The Farming 4.0 market in Africa presents substantial growth opportunities, with a projected CAGR of over 25% through 2030.
AFRICA OPPORTUNITY: Unlocking Africa's AI Potential
In 2024, Africa stands at the precipice of an Artificial Intelligence (AI) revolution. With a projected market size of USD 18.33 billion by 2030, the continent is poised to harness the power of AI to tackle pressing challenges such as poverty alleviation, improved healthcare delivery, and agricultural efficiency. These AI-driven solutions hold the key to unlocking unprecedented growth and sustainable development.
The potential for AI in Africa is vast, with a particular focus on the Machine Learning (ML) industry, which will account for 71% of the market by 2030. Machine learning enables systems to learn and adapt from data without explicit programming. This capability is particularly valuable in Africa, where datasets are often large and complex, making ML ideal for identifying patterns and trends to drive transformative solutions. As the African AI market experiences a CAGR of 17.68% from 2024 to 2030, the continent has a unique opportunity to leverage this technology for sustainable development.
One key opportunity lies in the education sector, where AI-powered tools can help bridge the gap in skilled workers. AI can provide personalised learning experiences, adaptive tutoring systems, and automated grading that allow educators to reach more students and provide targeted support. By 2030, the number of AI tool users in Africa is expected to grow from 3.64 million to 14.47 million. This user surge can be attributed to the increasing demand for AI-driven solutions in various sectors, such as healthcare, agriculture, and finance, highlighting the need for widespread AI literacy and skills development.
In healthcare, AI can help improve disease detection and prevention, while in agriculture, it can optimise crop yields and combat challenges like locust infestations. In finance, AI can facilitate smoother B2B transactions and promote financial inclusion in Africa's rising markets. However, the rapid expansion of AI presents challenges that must be addressed. For example, only 14% of companies are ready to integrate AI into their operations, and just 6% have trained more than 25% of their employees to use it. In addition, Africa currently has one of the lowest rates of employee training on Generative AI at 3%.
To capitalise on AI's opportunities, African nations must prioritise training and upskilling their workforce to ensure a smooth and effective integration of AI technologies. This will improve productivity, create new jobs, and stimulate economic growth. Moreover, the ethical use of AI must be a priority. Clear AI governance frameworks that respect human rights and values are essential to ensure the technology is used responsibly. Governments and businesses must collaborate to create a trustworthy AI development, use, and outcomes environment.
In conclusion, Africa's AI market is set to grow exponentially, presenting many opportunities for sustainable development and growth. By investing in AI education, training, and ethical practices, African nations can harness the power of AI to transform the continent and create a brighter future for its people.
AFRICA OPPORTUNITY: Africa’s Eurobonds are Beginning to Pay Off (And Out)!
Since their issue began in 2024, the Eurobonds have catalysed the appreciation of the West African CFA franc and the Kenyan shilling to the US dollar. The countries covered in Frost and Sullivan’s previous post – Benin and Cote d’Ivoire – use the West African CFA franc, which has appreciated notably following the bond issuance. Kenya first issued its Eurobonds in 2018 and has since exhibited longstanding and stable growth rates, with the 2024 issuance further boosting the growth to 602,3 Kenyan shillings to the dollar.
Particularly in Kenya, additional factors have contributed to the appreciation of the African currency, such as declining demand for the dollar and lower oil prices, which decrease the reliance on dollar-denominated imports. The appreciation has boosted investor confidence and thus the strength of the Kenyan shilling, but the bond must still deliver the demanded yield of 10,4%. While the world waits with bated breath, Kenya can enjoy the international investment limelight and its weightier wallet.
AFRICA OPPORTUNITY: Insights - Cape Town's 1st Annual SWAN Smart Water Metering Workshop
Frost & Sullivan participated at Cape Town's 1st SWAN - The Smart Water Networks Forum Metering Workshop. The knowledge shared was on smart water metering innovation being the beacon of hope for tackling Africa's water sector challenges, including ageing infrastructure, variable water quality, and unreliable energy supply, which collectively erode consumer trust. The event highlighted the transformative potential of integrating smart meters with alternative energy sources and telecommunications to offer real-time consumption data, ensuring billing transparency and accuracy. Discussions amongst delegates - including Kamstrup, Ontec Systems (PTY) Ltd, BCX and Bentley Water Infrastructure Solutions, among various experts, emphasised the significant roles of data integrity, privacy, and security in combating cyber threats, theft, and vandalism. The integration challenges of smart meters with outdated manual systems, alongside the importance of post-sales services like management and maintenance, were also examined. Moreover, despite cost concerns, the criticality of connectivity through technologies like satellite for remote areas was acknowledged as vital for extending services and building trust, marking a promising avenue for the growth of the smart water metering market across Africa.
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
