Seeds of Opportunity: The African Growth Series
September 2023 | Issue 5
In this week's issue, you will learn more about:
- BUSINESS DAY TV INTERVIEW: Price, People and Power in Africa's Technology Market
- Unlocking Sustainable Success: Long-Term SEZ Feasibility Assessments
- AFRICA TREND: Gaming in Africa is Ready to Play
- AFRICA Trend: Balancing East & West Foreign Investment
BUSINESS DAY TV INTERVIEW: Price, People and Power in Africa's Technology Market
Africa's technology market, burgeoning with potential and innovation, is deeply influenced by three pivotal factors: Price, People and Power.
Learn more as Sisonke Mgwebi, a Consulting Analyst at Frost & Sullivan Africa chats to Business Day TV regarding how these three factors impact the trajectory of Africa's technology market.
Unlocking Sustainable Success: Long-Term SEZ Feasibility Assessments
South Africa has delineated specific regions known as Special Economic Zones (SEZs) strategically designed to catalyse targeted economic activities and foster national economic growth. These SEZs are strategically positioned to attract both foreign and domestic investment by offering incentives, easy accessibility to national ports, as well as industrial development zones.
Companies contemplating investment within an SEZ require a comprehensive grasp of the local industry's intricate market dynamics. To achieve this, the assumption is to acquire local market knowledge by profiling supply trends, identifying key trade partners, and assessing local manufacturers. However, achieving a holistic comprehension of the market, vital for gauging the commercial viability of SEZ investments, necessitates a profound understanding of demand sectors. This entails scrutinising industrial shifts within downstream demand sectors, understanding the pivotal technologies poised to influence these sectors in the future, and anticipating potential disruptors capable of reshaping the market.
For instance, consider the establishment of a white fuels storage terminal in a designated South African SEZ with port and Industrial Development Zone access. Prior to such an undertaking, one must analyse the country's current and projected fuel supply landscape. However, prudent investors must also factor in the potential impact of shifts in the automotive industry, considering the increased adoption of Electric vehicles and Green hydrogen technology. With a diverse spectrum of expertise spanning multiple industries and a robust capability in feasibility assessment modelling, Frost & Sullivan is ideally positioned to facilitate a comprehensive understanding of the myriad opportunities presented by SEZs.
AFRICA TREND: Gaming in Africa is Ready to Play
The Africa Gaming Market is predicted to finish 2023 with US$ 4 billion in revenue with it forecast to reach US$ 5.6 billion by 2028, growing at a Compound Annual Growth Rate (CAGR 2023-2027) of 8.87%.
The gaming market has been taking off globally and Africa is no exception. African game adoption has been dominated by mobile games. The rise of mobile gaming in Africa is aided by the rising internet connectivity, increasing adoption of smartphones, and the increase in high bandwidth network connectivity, including the latest developments with 5G, which have further increased the demand of the gaming market across the region.
Africa's video game market is expected to grow steadily due to its young and growing population, which will continue to adopt video games as they age. The biggest gaming demand in Africa is aged 25- to 34-year-olds accounting for 38.8% of South African gamers. The market is expected to expand to reach even younger demographics as the population continues to grow. The youngest audience currently only accounts for 25.2% of users, which is a smaller size than the 26.2% who are 35- to 44-year-olds. Despite generally being seen as a premium product, gaming adoption has seen nearly identical adoption across income brackets in South Africa, with high-income users narrowly counting for the largest segment at 34.7% compared to low-income gamers making up 31.4% of the market.
As smartphone adoption continues across the continent and internet infrastructure improves, access to online and mobile gaming will continue to be enhanced. Africa’s gaming market is ready for the next level.
AFRICA Trend: Balancing East & West Foreign Investment
Foreign investment in Africa has been a topic of significant interest and debate over the past few decades. Africa has attracted investment from both Eastern and Western countries, each bringing its own set of advantages, challenges and implications. Foreign investments in Africa are mainly concentrated on natural resources. However, FDI inflows play a significant role in Africa's ICT market.
Eastern countries such as China have heavily invested in Africa's infrastructure, including roads, railways, ports and energy projects. The Belt and Road Initiative (BRI) is a notable example. Whilst infrastructure projects create jobs, concerns arise about the transfer of skills to local populations. Some argue that Chinese firms often bring their own management to supervise local labour. Western countries, primarily the US and EU members, have traditionally focused on sectors like mining, oil, and gas. However, there's also significant investment in telecommunications, banking and retail.
Whilst foreign investment from both the East and West has brought about development and growth, it also comes with challenges that need to be addressed to ensure sustainable and inclusive progress.
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
