Seeds of Opportunity: The African Growth Series
March 2023 | Issue 5
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: CRISPR Transforming Healthcare and Agriculture
- AFRICA OPPORTUNITY: Nigeria's VC Funding
- AFRICA OPPORTUNITY: Multi-Channel Logistics and the AFCFTA
- AFRICA OPPORTUNITY: Africa’s AfCTFA agreement set to boost the agriculture industry
- AFRICA OPPORTUNITY: The Growth of Tech in Africa
- AFRICA OPPORTUNITY: Medical Devices as a Service
AFRICA OPPORTUNITY: CRISPR Transforming Healthcare and Agriculture
With the ground-breaking Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) technology, the future is bright for Africa's healthcare and agricultural sectors. Malaria, the most prevalent tropical illness in the world, causes over half a million deaths each year in Africa. Efforts to control the mosquitoes that spread the disease have been unsuccessful for years. However, recent successes in producing CRISPR-based software for malaria vectors and Anopheles gambiae offer significant promise for malaria elimination.
In addition, CRISPR genetic drives can reduce the spread of dangerous infectious pests, such as the fall armyworm Spodoptera frugiperda, which wreaks havoc on major staples, such as corn, rice and wheat. Additionally, the technology can also help to enhance the genetic traits of crops, making them more resilient to disease, pests, and climate change, thereby improving crop yield and quality.
With its vast range of applications, CRISPR technology presents a golden opportunity for Africa to make significant strides in its healthcare and agricultural sectors. According to a recent Bloomberg report, the global CRISPR genome editing market is projected to exceed USD 15.84 Billion by 2028, with a remarkable CAGR of 29.50%. Furthermore, the success of IITA and 54gene - two Nigerian companies that have effectively leveraged CRISPR technologies - showcases the immense potential of this cutting-edge innovation in Africa.
AFRICA OPPORTUNITY: Nigeria's VC Funding
Nigeria was Africa's best-funded country for the second year running in 2022, raising the highest percentage of funding at 29.3% with US$976 million across 180 startups. This success and concerns about the recent failure of Silicon Valley Bank (SVB) Financial Group, which was crucial for growing startups in Nigeria, instigated the country to launch a US$672 million fund under the Digital and Creative Enterprises Programme (DCEP) in Nigeria's federal capital of Abuja. The fund is a government initiative targeting companies run by under-35-year-olds who promote innovation and entrepreneurship in the digital tech and creative industries, with a focus on job creation. The DCEP is crucial in helping the government fulfill its commitment to foster an environment that supports startups who still struggle to attract funding because traditional credit providers, such as banks, demand that they provide collateral which startups struggle to have.
AFRICA OPPORTUNITY: Multi-Channel Logistics and the AFCFTA
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Africa seeks to boost its intra-trade by 28% and increase consumer spending by up to $6.7 trillion by 2030 through the African Continental Trade Agreement (AFCTA). Yet globally, several economies are facing the threats of inflation, recession, and supply chain disruptions which are expected to result in a drop in consumer demand in 2023. If these challenges are not met with a robust and effective logistic solution, a drop in demand could result in new difficulties for logistics companies. The last two years, however provide key lessons to evade vulnerabilities in the supply chain through multi-channel logistics solutions in contrast to one-dimensional logistics.
In this video, I discuss the unique opportunity provided by multi-channel logistics for Africa and its link to the AFCTA - https://youtu.be/ik9wKixTMfw.
AFRICA OPPORTUNITY: Africa’s AfCTFA agreement set to boost the agriculture industry
Africa’s agriculture industry is set to grow in strength and size under the African Continental Free Trade Area (AfCFTA) agreement, struck in February 2021. By 2030, the free trade area is set to be one of the world’s largest areas in population and economic size, reaching 1,7 billion and overseeing US$ 67 trillion in consumer and business spending. Accordingly, due to its significant potential growth, the agreement is set to be transformative for many of Africa’s industries, particularly the agricultural industry. The agriculture industry accounts for roughly one-third of Africa’s GDP, providing a livelihood for 50% of the continent’s population. The common marketplace introduced under the AfCFTA will leverage the continent’s regional differences of intra-African diversity in food value chains, specialisations and key outputs, reducing the region’s dependency on foreign agricultural inputs and increasing agricultural trade by 574% (if import tariffs are eliminated).
This growth in the agricultural industry will drive increased investments locally and globally, benefitting African-owned and run businesses. The AfCFTA is paving the way for stronger business partnerships throughout the continent, with many companies taking up fresh opportunities.
AFRICA OPPORTUNITY: The Growth of Tech in Africa
In 2022, the macroeconomic environment impacted funding within Africa. However, while venture capital (VC) activity slowed down within the continent last year, Kenya recorded the strongest growth in funding raised in Africa. Data indicates that Kenya raised USD 1.1 billion; overall, the continent raised USD 5 billion in VC funding. While nearly all sectors in Kenya experienced growth, key verticals were clean tech, eCommerce, and fintech. This reflects a growing trend within the continent, where the tech ecosystem has been forecasted to grow from USD 115 billion in 2022 to USD 712 billion by 2050. Strong market fundamentals and the impact of the COVID-19 pandemic have accelerated this exponential growth. With one in six of the world's internet users based in Africa by 2025, the technology industry promises massive growth in Africa. The proper financial support can assist in leveraging the excess of innovation in the continent, whereby 633 tech startups were founded in Africa in 2022 (with a year-on-year jump of 55.1%).
AFRICA OPPORTUNITY: Medical Devices as a Service
The medical devices as a service (MDaaS) business model involves providing flexible acquisition and maintenance of medical equipment services to healthcare facilities. In Africa, where the affordability of medical technology is hampered by the high cost of capital and a lack of financing options, this model is gaining traction. MDaaS has the potential to revolutionise the African medical devices market, where local manufacturing remains limited and more than 90% of medical devices are imported. The growth of MDaaS in Africa is further driven by the service support offered as part of the business model, given the prevailing scarcity of biomedical technicians with the necessary training and expertise to maintain and repair equipment across the region. The barriers to acquiring medical equipment in Africa can be reduced by an estimated 80% through the MDaaS business model.
The MDaaS business model is especially thriving in Nigeria, where MDaaS Global has received USD3.7 million in funding as of 2021, through which the company has expanded its services to 8 Nigerian cities. The African medical devices market is projected to register a compound annual growth rate of 7% from 2023 to 2030, reaching a total market value of about USD 12 billion in 2030.
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To find out more about opportunities in Africa, please get in touch with Lynne Martin.
