Seeds of Opportunity: The African Growth Series

In this month's issue, you will learn more about:

EXPERT INSIGHT: Special Economic Zones as Catalysts for Sustainable Development in Africa 

Special Economic Zones (SEZs) are fast becoming one of Africa’s most strategic tools for industrial transformation. As countries across the continent seek to diversify their economies, attract foreign investment, and create jobs, SEZs offer a compelling platform to fast-track these goals. Beyond traditional economic benefits, a new generation of SEZs aligns with Africa’s sustainable development agenda, incorporating Environmental, Social, and Governance (ESG) principles into their design and operations. According to the United Nations Conference on Trade and Development, SEZs can contribute to the United Nations Sustainable Development Goals (SDGs) if they embed sustainability into their core frameworks. This can be achieved through resource-efficient technologies, gender-inclusive hiring practices, local SME linkages, and low-carbon infrastructure. 

Africa has over 220 SEZs, representing an area of over 140,000 hectares and USD 2.6 trillion in investment. African countries with the highest concentration of SEZs are Kenya, with 61 SEZs; Nigeria (38), Ethiopia (18); and Egypt (10). In Ethiopia, the government has prioritised SEZs as part of its broader industrialisation strategy. In particular, the Hawassa Industrial Park is a flagship model of sustainable industrial development. Built with eco-friendly infrastructure, including a zero-liquid discharge water treatment system, the park has attracted global textile brands and employs over 20,000 workers, 80% of whom are women. This showcases how SEZs can be inclusive, sustainable, and export-oriented. 

In Nigeria, the Lekki Free Trade Zone is rapidly evolving into one of West Africa’s most significant industrial hubs. Anchored by the Dangote Refinery and deep-sea port, the zone is expected to boost Nigeria’s refining capacity, reduce fuel imports, and stimulate the petrochemical and manufacturing sectors. With an estimated 200,000 jobs to be created over the next decade, the Lekki Free Trade Zone highlights how SEZs can drive large-scale industrial employment and infrastructure upgrades. 

African SEZs offer a means to tackle deep-rooted challenges such as youth unemployment, low manufacturing capacity, bureaucratic challenges and limited regional value addition. This is achieved by concentrating investment, knowledge transfer, and technology adoption in dedicated areas. The Coega SEZ in South Africa exemplifies this approach. With over 50 operational investors in diverse sectors such as the automotive, renewable energy, agro-processing, and logistics sectors, Coega has generated more than 130,000 jobs since its inception. It is also home to one of the most extensive wind turbine manufacturing facilities in the southern hemisphere, aligning with South Africa’s just energy transition. While Coega has thrived under efficient governance, the Musina-Makhado SEZ has been flawed by delays and community opposition, largely due to bureaucratic inertia and a lack of transparency. These challenges underscore the need for SEZs to be backed by capable institutions and clear governance mandates. One of the less-discussed advantages of SEZs is their capacity to bypass complex, inefficient, and often corrupt bureaucratic systems. By creating dedicated zones with special legal and regulatory frameworks, governments can fast-track approvals, offer one-stop investment services, and enforce higher transparency standards. 

 Kenya’s Dongo Kundu SEZ near the Mombasa port is being positioned as a regional logistics and manufacturing hub. The zone is supported by Japanese financing and public-private partnerships and includes plans for eco-friendly transport corridors and green energy integration. Ghana's Meridian Industrial Park, located within the Tema Free Zones Enclave, has attracted significant foreign investment due to its transparent and efficient governance structures. Strategic partnerships between the government and private investors have been pivotal in promoting investment and economic growth while ensuring accountability and reducing bureaucratic red tape. Governments are also beginning to integrate climate risk into their SEZ planning. For example, Djibouti’s Damerjog Industrial Development Free Zone, part of a larger multi-port strategy, is increasingly factoring in resilience to rising sea levels and supply chain disruptions, ensuring the zone can remain operational under future climate scenarios. ​ 

The new frontier for SEZs in Africa is their ability to support sustainable development-delivering not just economic gains, but also environmental protection, social inclusion, and long-term resilience. There is growing evidence that SEZs are designed with sustainability in mind to attract higher-quality investment and offer better outcomes for both investors and host communities. When well-planned and executed, SEZs are powerful catalysts for Africa’s economic and sustainable transformation. As global investors increasingly seek greener and more resilient supply chains, African SEZs must rise to the occasion by embedding sustainability not only as a compliance requirement but also as a competitive advantage. This shift is already underway, from Ethiopia’s eco-industrial parks to Nigeria’s industrial corridors and Rwanda’s efficient, transparent zones. The challenge now is to scale what works, reform what doesn’t, and ensure SEZs remain inclusive, adaptive, and truly transformative for the continent’s future. 

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AFRICA OPPORTUNITY: Transforming Southern Africa's Logistics Landscape by 2030 

Southern Africa is on the brink of a logistics revolution. With over USD100 billion committed to infrastructure development by 2030, the region is set to become a vital hub for intra-African trade and global supply chains. 

Key regional projects include the Lobito Corridor, a USD10 billion U.S.-backed railway that will connect the DRC to Angola’s Atlantic coast. The proposed 1,700km mixed-traffic Ponta Techobanine Railway will link a new deep-water port in Mozambique with Zimbabwe and Botswana. These logistics networks are designed to significantly boost cross-border trade and connectivity. 

In South Africa, Transnet, backed by a USD1 billion loan from the African Development Bank, plans to increase freight volumes from 150 million to 250 million tonnes per year. This initiative includes modernising rail systems and opening the sector to private investment. Simultaneously, port upgrades are underway to reduce vessel delays and improve cargo handling, with the Coega Special Economic Zone serving as a model by combining industrial growth with deep-water port efficiency. 

Together, these developments mark a turning point for Southern Africa - not just in physical infrastructure, but in economic transformation, regional integration, and public-private collaboration. 

AFRICA OPPORTUNITY: Ethiopia’s USD 1.7 Billion Investment in Energy and Minerals ​

Ethiopia has signed groundbreaking deals worth USD 1.7 billion to develop its mineral and energy sectors. These partnerships are set to supercharge Ethiopia’s economic diversification efforts and unlock the country’s vast untapped natural resources. ​

From lithium and gold to energy infrastructure, the investment signals growing confidence in Ethiopia’s long-term stability and resource potential. It also reflects a broader shift across Africa, as governments are forming strategic alliances to build sustainable industries, boost exports, and capture more value locally. ​​

The global demand for critical minerals is increasing, especially for batteries, electric vehicles, and clean energy. Ethiopia’s positioning is both timely and significant. These developments could pave the way for regional energy security, infrastructure upgrades, and new jobs across the Horn of Africa. ​

AFRICA OPPORTUNITY: A Just Transition for Africa’s Charcoal Economy​

Across African cities, charcoal remains the primary cooking fuel for nearly 200 million Africans, including 27% of urbanites. In the Democratic Republic of Congo, over 70% of households rely on it. In Tanzania, it is close to 60%, while in Kenya, charcoal still fuels more than 40% of homes. Despite urbanisation and improved electrification, charcoal usage is rising, driven by its convenience. By weight it contains nearly twice as much energy as the wood from which it is made, making it easier to transport and access, especially in rural areas.​​

This dependence, however, has major consequences. Indoor air pollution from charcoal use is a leading contributor to respiratory illnesses, particularly among women and children. Environmentally, it is accelerating deforestation and carbon emissions. Despite the scale of this issue, access to alternatives remains limited. Over 900 million people across Africa still lack clean fuels and technologies.​

Therefore, this is one of the continent’s most urgent and investable gaps.​

In Kenya, KOKO Networks is rethinking urban energy with a tech-enabled platform that delivers clean bioethanol through a network of over 3,000 smart fuel ATMs in neighbourhood shops. With more than one million daily cooking events now powered by KOKO, the model proves that clean cooking can scale commercially in low-income urban settings.​​

The opportunity extends beyond Kenya. Cities like Kampala, Dar es Salaam and Kinshasa are facing the same pressures: growing populations, rising fuel demand, and worsening health and environmental costs. As clean cooking innovation accelerates, these urban centres represent a significant opportunity for investment, manufacturing, and service delivery.​

As clean alternatives remain out of reach for many, how should Africa balance the urgent need for energy access with the long-term shift away from charcoal?​

AFRICA OPPORTUNITY: AI-Driven Logistics Transforming Supply Chains Across Africa​​

Efficient and reliable logistics remain critical to Africa’s growing markets and expanding consumer base. Innovations that optimise delivery routes, fleet management, and operational efficiency are essential to unlocking new growth potential. In many African markets, logistics expenses contribute as much as 75% of retail prices on products. These high costs are often due to inefficiencies in delivery operations and supply chain management.​

Kenya-based startup Leta is pioneering a new era in supply chain efficiency with its AI-powered logistics platform. By automating dispatch planning and integrating real-time data on road conditions, vehicle availability, and shipment details, Leta is streamlining supply chains for major corporations such as KFC, Diageo, and EABL. The platform now optimises over 10,000 trips daily across Kenya, Nigeria, Uganda, Zambia, and Zimbabwe, managing a fleet of more than 7,400 vehicles and facilitating 4.5 million deliveries to date.​

Leta’s recent $5 million seed funding, led by Speedinvest with support from Google’s Africa Investment Fund and Equator, reflects growing confidence in AI-powered logistics solutions as drivers of cost efficiency, reduced emissions, and improved service levels.​

As Africa’s markets expand, AI-enabled logistics platforms offer scalable solutions that enhance supply chain resilience and create significant opportunities for investment and innovation. Do you agree that AI-powered platforms will become the backbone of Africa’s next-generation logistics networks?​

UPCOMING EVENT: South Africa Infrastructure & Water Expo Forum 2025 |JHB, South Africa

Explore the key topics shaping South Africa’s infrastructure and water sectors at the launch of the South Africa Infrastructure & Water Forum; co-located at Big 5 Construct South Africa from 18-20 June 2025 at the Gallagher Convention Centre, Johannesburg.

Join the discussion titled ‘Public-Private Partnerships (PPP): Exploring Collaborations Between Governments and Private Entities in Infrastructure Projects’ on Wednesday 18 June at 14h30 as the below themes are unpacked:

▪️ Unlocking Investment & Funding Opportunities: Examining how PPPs can bridge infrastructure financing gaps by leveraging private sector capital, reducing the financial burden on governments, and accelerating project implementation.

▪️ Regulatory Frameworks & Risk Allocation: Discussing legal and policy frameworks that govern PPPs, ensuring transparency, fair risk distribution, and long-term project sustainability.

▪️ Innovative Project Delivery & Efficiency: Highlighting how PPPs introduce innovation, technical expertise, and efficiency in infrastructure development, leading to improved service delivery and cost-effectiveness.

▪️ Success Stories & Lessons Learned: Showcasing case studies of successful PPPs in South Africa and beyond, identifying key challenges, solutions, and best practices for future projects.

Hendrik Malan (Frost & Sullivan, Partner & Africa CEO) will unpack the themes with other industry experts; Alvino Wildschutt-Prins (Moderator), Johnson Mwawasi Kilangi, ENV SP, Wynand Dreyer, and John Samuel.

👉 View the full agenda: https://bit.ly/432ROpu

👉 Register to visit: https://bit.ly/4iGDTKn

UPCOMING EVENT: Transport Evolution Africa Forum & Expo 2025 | JHB, South Africa

The 12th annual Transport Evolution Africa Forum & Expo (co-located at Big 5 Construct South Africa), taking place at the Gallagher Convention Centre from 17-19 June 2025, will drive economic growth and support the realisation of Agenda 2063 and the vision of #TheAfricaWeWant.
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​Join us on Day 2 of Transport Evolution Africa 2025 for a panel discussion on “Enhancing Regional Connectivity for Efficient Movement of Goods.”

This session explores how advanced transportation networks and cross-border coordination can reduce costs, expedite delivery times, and foster trade across the continent.

Session date: 18 June 2025

Venue: Gallagher Convention Centre

Time: See full agenda here: https://lnkd.in/d5A8vTtn and Book your seat.

Moderated by: Gautrain Management Agency

Speakers:

- Peter Varndell, CEO, NEPAD Business Foundation

- Hendrik Malan, Senior Partner and CEO, Frost and Sullivan

- Dr Bheka Zulu (MBA MCom PhD) Zulu, Tshwane Special Economic Zone

- Vishaal Lutchman, Group CEO, GIBB

- Altus Moolman, Technical Director: Transport, Zutari

- Mandisa Mondi,General Manager: MMC Business Unit (TFR), Transnet

See the full agenda here: https://lnkd.in/d5A8vTtn and Book your seat.

To find out more about opportunities in Africa, please get in touch with Lynne Martin.

Lynne Martin

Sales Contact, Frost & Sullivan Africa

• lynne.martin@frost.com
• +27 21 680 3260