Seeds of Opportunity: The African Growth Series
March 2022 | Issue 1
In this week's issue, you will learn more about:
- Nigeria's Digital Currency - eNaira
- ChatBot Technology in Africa
- Powering up the Sahel through Renewable Energy
Nigeria’s Digital Currency
Nigeria joins the Bahamas and the Eastern Caribbean Central Bank in being among the first jurisdictions in the world to roll out national digital currencies. The eNaira, Nigeria’s digital currency will be one of the first in Africa and is the digital form of the Naira that holds the same physical value and can be used just like cash. Launched by the Central Bank of Nigeria, the eNaira currency is set up on an app (The Speed Wallet) which is downloadable on the Google Play Store and the Apple Store. The central bank digital currency (CBDC) features a centralised distributed ledger technology (DLT) that allows the central bank to issue and control the monetary supply in a manner like the current paper money regime. The eNaira will be purchased through financial institutions and transferred into e-wallets, that is maintained by customers. The aim of the digital currency is to promote economic growth in the country through easier access to capital and financial services. As the country with the largest population on the continent, spearheading this process could signal the start of a regional monetary integration. If digital currency arrangements could work together across the continent, it could solve the challenge of interconvertibility of African countries, facilitating interregional trade.
ChatBot Technology in Africa
Chatbot technology has the potential to radically alter business models, improve customer experience and engagement, to enhance financial inclusion in emerging markets. Globally, the revenue for the chatbot market is projected to be more than quintuple from 80 million USD to over 450 million between 2021 and 2027. The technology uses artificial intelligence (AI) programs that engage customers by simulating human conversation through voice commands and direct messaging. However, Africa has a variety of multilingual countries and chatbots struggle to respond beyond their predetermined path. They fall short in understanding the customer, perceiving the context of the customer's questions, and consistency per customer if they have to chat with the bot over various devices.
Conversational AI through chatbots can transform millions of lives in Africa. With 46% of the Sub-Saharan population subscribed to mobile services in 2020, there are a lot of opportunities for chatbot technology to be a popular method for organisations to engage with their staff and the communities they support. An example of this is nonprofits reaching more people with information and services they need, quickly and at scale. Because of this, AI is growing in popularity throughout Africa with several startups looking to target the gaps in the technology and improve their service offerings to the needs of their consumers.
Powering up the Sahel through Renewable Energy
Access to electricity is a critical driver for economic and human development, yet several countries in sub-Saharan Africa still record below 50% electrification rates. Only 8.4% of the population in Chad had access to electricity in 2019, which is a limitation to the country's economic growth. In line with goal 7 of the SDGs, the African Development Bank (AfDB) is among finance institutions working on changing this landscape. In its recent activities, AfDB is envisaging committing $379.6 million in financing and technical assistance for the Desert to Power G5 Sahel Financing Facility. The facility covering Burkina Faso, Chad, Mali, Mauritania, and Niger will be implemented over the next seven years, as part of the broader AfDB Desert to Power initiative (up to 2030). From the 500 MW additional solar power to be generated by the facility, 659,000 households/businesses will directly benefit. Beyond just economic benefits, this facility plays a significant role in the fight against climate change, with an expected reduction of over 14,4 million tons of carbon emissions. Tapping the renewable energy generation potential through projects like this, is a step in the right direction, given the high reliance on bioenergy in sub-Saharan Africa.
To find out more about opportunities in Africa, please contact Lynne Martin.
