Seeds of Opportunity: The African Growth Series
June 2022 | Issue 1
In this week's issue, you will learn more about:
- Energy Storage Solutions in Africa
- The benefits of Circular Economic Strategies in Africa's Mining Industry
- E-Commerce in Sub-Saharan Africa
- e-Learning in Africa
- Clean Energy Developments in Kenya
Energy Storage Solutions in Africa
Green Hydrogen continues its rightful trend as a key solution to the world’s energy transition. Its suitability across multiple industries makes it especially useful for both developed as well as developing nations. Africa, the world’s continent with the lowest electrification rate (48% of the population), however, needs to look into alternative energy storage solutions (ESS). While Lithium-ion batteries (LIBs) and similar battery energy storage solutions (BESS) are on the rise, they are most suitable to be used with renewable energy technologies such as solar PV and wind. Molten salt technologies have been implemented in Africa in countries such as South Africa and Morocco as the main energy storage for concentrated solar power (CSP) but remain yet to be utilised in other parts of the continent.
Given the continent’s high renewable potential for hydropower and the African government’s drive to invest in hydropower projects such as the Grand Inga and GERD, an alternative ESS arises in the pumped-storage hydropower (PSH), also referred to as the world’s water battery. PSH is one of the most suitable components in accommodating the intermittent nature and seasonality of other renewable energy technologies, but it continues to often be ignored. With renewables forming an increasingly integral part of any African country’s power sector development plan, grid stability and balance technologies need to be accounted for. Africa needs to develop PSH as it helps avoid renewable energy curtailment and considerably reduces the reliance on carbon-heavy thermal power plants. As power blackouts become increasingly more common in countries such as South Africa, PSH can play a vital role in keeping the economy going. While Eskom continues its loadshedding across the nation, cities such as Cape Town, with a population of nearly 5 million, are generally one stage below the national loadshedding stages because of the ability to use the Steenbras PSH plant to offset reduced supply from the national grid.
The benefits of Circular Economic Strategies in Africa's Mining Industry
Africa is well endowed with mineral resources such as gold, silver, copper, cobalt, uranium and many more that are used as key inputs to manufacturing processes throughout the world. However, the extraction of these minerals comes at an environmental cost that is increasingly under increased scrutiny as the world looks to promote greener practices. Traditionally mining has not been associated with visions of a circular economy. However, as the world transitions into a low-carbon future, the demand for Africa’s mineral resources will increase. To spur Africa’s transition into a circular economy, the African Circular Economy Alliance (ACEA) (a government-led coalition of African nations) was created to transform African economies into circular economies that deliver economic growth, jobs and positive environmental outcomes. According to the ACEA, the adoption of circular economy strategies in mining can significantly create a sustainable mining industry while reducing the pressure on limited resources, decreasing operating costs while increasing operational efficiency and mitigating risks associated with shifting consumer and investor preferences.
E-Commerce in Sub-Saharan Africa
In 2020, Africa's online shopping revenue reached nearly USD 28 billion, an increase of over 6 billion since 2019. Forecasts show that by 2025 revenue could reach a value of over USD 46 billion, which is promising because currently in Sub-Saharan Africa, 59% of e-commerce sales happen on mobile devices and by the end of 2020 46% of the region’s population subscribed to mobile services. By 2025, 40% of Africa’s mobile users will use e-commerce and 4G adoption is expected to double to 28%, compared to a global average of 57%. The volume of downloads and installations of eCommerce apps in 2021 grew by 55% on Android devices and 32% on iOS. These numbers could grow as forecasts show an increase of 56% in active online shoppers, from 334 million to 518 million users between 2021 and 2025. Monthly website traffic is a key performance indicator of the success of an e-commerce platform. Keeping this in mind, leading e-commerce companies in Nigeria, South Africa, and Kenya dominate the Sub-Saharan e-commerce landscape. The top 5 platforms are Jumia, Takealot, Konga, bidorbuy, and Kilimall. A World Wide Worx study focused on South Africa's e-commerce industry in 2020 revealed a 66% growth in online retail to the value of 30.2 billion ZAR. Africa has a budding e-commerce industry reflecting an increasing consumer comfort with shopping online and disposable income. This could drive economic development by attracting more companies to African shores and fostering the growth of local companies.
e-Learning in Africa
As the world celebrated Africa Day last week, it would be remiss to not recognise the efforts made to reduce the education gap in the continent. Education is a fundamental human right and yet, as of 2022, by the age of 15, 60% of children are not placed in school. While the statistics are stronger regarding children from the ages of 6 to 11 (80% receiving ongoing education), the reality of lack of resources, poor quality education, and little funding means that those placed in a school system may be receiving an education of a negligible standard. Moreover, the lack of transportation available to students, with an average walking distance of 12 km every day to school, exacerbates this crisis as some students cannot travel to school on most days. In addition, the closures of schools necessitated by the Covid-19 pandemic further forced children to stay at home, some assuming the role of caretaker, which they cannot subsequently abandon.
While the pandemic had devastating impacts on the schooling system, it did serve as a catalyst for the mobilisation of online distance learning and a stimulus for innovation in education around the globe. This has been most evident in South Africa where the share of internet users who watched online learning videos in the 4th quarter of 2021 was 66%. This stands in stark contrast to countries like Japan (11%) and the Netherlands (25%). This drive for online learning is a huge space for growth, development, and opportunity in South Africa and has been recognised by the cloud computing community. Sea Monster, an animation and game development company, is gearing towards utilising the power of oral tradition (an indigenous and historic means of teaching) through storytelling as a means to support learning and unlock challenges in communication. This is an exciting move towards increasing access to education in light of the high EdTech usage in South Africa and a recognition that a reasonable education has the promise to transform the life of a student, and in turn, empower a community at large.
Clean Energy Developments in Kenya
The first half of 2022 is already seeing several moving blocks in the African energy landscape, with many more still in the pipeline. Work is progressing on various fronts, from utility-scale generation (renewable/conventional) projects in Mozambique, Chad, and Uganda to several smaller energy efficiency and decentralised power generation projects. In Kenya, the addition of at least two waste-to-energy plants is some of the actions being taken aligned with the country’s target of achieving 100% clean energy generation by 2030 and to help reduce the solid waste management issues in Africa. By 2020, access to clean, affordable and reliable electricity had improved to 75%, rising from below 30% in 2013.
Moving blocks in 2022 include Practical Action's (a local NGO) plans to set up a waste-to-energy plant in Kericho County. Exact details on the facility’s capacity or investment required have not been disclosed, but positive project outcomes will include job creation. The program linked to the plant will provide about 900 pedal garbage cans and 4,500 bags, as well as a full set of 250 personal protective equipment for residents in the county part of the program. A similar project worth $53 million is already in the works in Kakamega, where VR HOLDING AB is constructing a 10MW waste-to-energy plant. Both projects are a testament to the country's dedication in achieving the 2030 targets, however, issues with speedy implementation remain, with the latter facing a delay, of 7 years (from inception to implementation). Overall, with the National Energy Efficiency and Conservation Strategy in place, the Kenyan government is hopeful and confident about the upcoming 5 years.
With engagements like Enlit Africa (formerly African Utility Week & POWERGEN Africa) still ahead, the African energy market may see more exciting project developments in the upcoming months.
To find out more about opportunities in Africa, please contact Lynne Martin.
