Seeds of Opportunity: The African Growth Series
July 2024 | Issue 1
In this week's issue, you will learn more about:
- EXPERT INSIGHT: South Africa's Water Crisis
- AFRICA TREND: AI Revolutionising Fintech for Financial Inclusion
- AFRICA OPPORTUNITY: TymeBank is Seeking Funding to Secure its Position on the New York Stock Exchange
- AFRICA TREND: Small-Scale Wind Turbines Introduced at V & A Waterfront
- AFRICA TREND: Floating Solar Revolution
EXPERT INSIGHT: South Africa's Water Crisis
Water is an essential resource, yet experts predict that the world could run out of fresh water entirely by 2040 unless immediate and significant changes to water usage are implemented. Human activities have significantly contributed to the rapid depletion and mismanagement of water resources, while climate change exacerbates the situation. Between 2000 and 2022, the number and duration of global droughts increased by 29%, leading to over 2.3 billion people facing water scarcity by 2022.
Africa is disproportionately affected by the climate crisis, experiencing a warming trend that exceeds the global average and accounting for 44% of global extreme weather events in the past century. Already, one in three people in Africa are affected by water shortages, with climate change set to exacerbate the challenge of water availability, impacting the food and energy security of the continent’s growing population. The financial costs of climate-induced loss and damage in Africa are projected to reach at least USD 290 billion in a 2°C warming scenario.
Figure 1 - Graphs highlighting the impact of climate change-induced natural disasters
In water-scarce countries like South Africa, the availability of untreated water is expected to worsen due to economic and population growth coupled with deteriorating infrastructure. For instance, Cape Town experienced a one-in-400-year drought that nearly led to 'Day Zero' and cities like Durban have faced severe outcomes due to frequent and extreme weather events such as droughts and floods.
Figure 2 - Distribution of Surface water in South Africa. The image depicts how water is scarce in South Africa and localised to certain parts of the country.
Recently, Johannesburg has borne the brunt of this crisis. While typically low rainfall has played a role, collapsing infrastructure and poor resource management have also contributed to water storage levels plummeting below 30%, leaving millions without access to water for weeks. To address this, Rand Water has initiated extensive maintenance on its bulk water infrastructure from June 22 to July 29, 2024. This maintenance aims to improve the reliability and efficiency of Rand Water's infrastructure, affecting Johannesburg Water’s systems supplied by the Palmiet and Eikenhof pump stations and the Daleside booster station, with some areas experiencing water outages and reliance on water tankers. However, these efforts are expected to enhance long-term pump infrastructure reliability, reduce downtime, and ensure a continuous and reliable supply by Johannesburg Water's systems.
Johannesburg's challenges indicate the broader issues that many cities could face if infrastructure remains unmaintained. Currently, an estimated 30% to 50% of all distributed water is lost through pipeline leaks, worsening the water crisis, with only 2% of national water resources remaining for lawful use. As new roads and water pipes are installed, it is crucial to consider a dual-pipe system: one for potable water and another for non-potable water for uses such as gardening. This approach aims to develop a dual-stream reticulation economy, providing water of different qualities at different prices for various purposes.
Source: Investec, Daily Maverick, Mail & Guardian, The Citizen
AFRICA TREND: AI Revolutionising Fintech for Financial Inclusion
Africa's fintech industry is leveraging AI to transform financial inclusion. Companies like Flutterwave and M-KOPA are at the forefront, utilising AI to reduce costs, enhance efficiencies, and expand access to financial services. Investment in AI-driven fintech solutions is accelerating, presenting significant growth opportunities across the continent.
AFRICA OPPORTUNITY: TymeBank is Seeking Funding to Secure its Position on the New York Stock Exchange
TymeBank, an online South African bank, is seeking R2.7 billion ($150 million) to expand in preparation for entering the New York Stock Exchange by 2028. Initially founded in 2015, TymeBank has been one of the fastest-growing digital banks in Africa. It is a fantastic choice for people on the continent seeking a totally online banking option that is accessible with Internet access. TymeBank is controlled by Patrice Motsepe’s company, African Rainbow Capital, with shareholdings by Tencent Holdings, a Chinese technology and internet company.
Currently, TymeBank is valued at close to $1 billion, with plans in place to expand. Alongside the goal of listing on the NYSE, CEO Coenraad Jonker states that the digital bank plans to move into the Indonesian market by the close of 2024. Don’t worry South Africa, the goal to list TymeBank on the Johannesburg Stock Exchange is set shortly after the digital bank’s American debut.
These are exciting times for TymeBank and all its stakeholders, and Frost & Sullivan will be sure to keep you in the loop.
AFRICA TREND: Small-Scale Wind Turbines Introduced at V & A Waterfront
The V & A Waterfront in Cape Town as recently introduced 5 small-scale, aesthetically pleasing wind turbines in the Silo district and Breakwater parking areas. These wind turbines, sourced from German company LuvSide, form part of V & A Waterfront's green electricity supply mix. Four 1KW units and one 3KWhas turbine will complement the facility’s existing solar installation, feeding into the 30KW invertor and 45KW backup battery system.
LuvSide has partnered with Energy Systems Africa to bring these aesthetically pleasing wind energy systems to the South African market. The unique helix-structure shape of the wind turbine allows for the capture of any movement of wind whilst remaining noiseless. The pilot project at the V & A Waterfront represents LuvSide's first plunge into the market in this country, but Energy Systems Africa CEO Rodney Love is confident of the opportunities for the technology in this market. South Africa is perfectly poised to incorporate small-scale wind turbines alongside the current solar installations to improve power certainty, energy security, and green credentials. This will be particularly prevalent to those companies and individuals in windy coastal regions and those seeking to operate 24/7, he told Engineering News & Mining Weekly.
AFRICA TREND: Floating Solar Revolution
New research reveals that floating solar panels could meet the entire energy needs of several African countries. Ethiopia and Rwanda could generate over 100% of their national energy demand using just 10% of their lake surfaces. This innovative solution addresses land scarcity while boosting clean energy production.
Industry leaders like Ghana's Bui Power Authority are already capitalising on this trend. Their recent installation of Africa's largest floating solar system demonstrates the technology's viability.
With 1,977 suitable water bodies across Africa, this represents a game-changing opportunity for sustainable development.
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
