Seeds of Opportunity: The African Growth Series
February 2023 | Issue 3
In this week's issue, you will learn more about:
- Leveraging 4IR to Revamp South Africa's Power Supply
- ERP Myths & Truths
- African Governments Investing into the Continent
- The Growth of Green Hydrogen in South Africa
- Remote Patient Monitoring in South Africa
- Upcoming Webinar: Dispelling Myths about Enterprise Resource Planning Systems
- Upcoming Event: Africa's Green Economy Summit 2023
- Upcoming Event: Africa Energy Indaba 2023
Leveraging 4IR to Revamp South Africa's Power Supply
Despite South Africa's challenges with its electricity supply, which stems from the second industrial revolution, there is a misconception that the fourth industrial revolution (4IR) can only be understood by mastering earlier technologies. However, this is not true as demonstrated by the ability to make a computer, a technology from the third industrial revolution, without knowledge of the first industrial revolution's steam engine technology.
What is crucial to understand is the relationship between electricity and economic growth. South African studies have shown that electricity utilisation positively correlates with economic growth. This highlights the importance of addressing electricity supply problems. In this regard, 4IR technology can provide solutions. For example, in electricity generation, 4IR's predictive maintenance can extend the life of assets beyond their life cycle. This is done by directly monitoring transformers during operation to anticipate failure, leading to a more efficient and cost-effective system. Artificial Intelligence (AI) can also improve electricity transmission by designing stronger and cheaper pylons, as well as securing transmission lines against theft. AI can also monitor the structural integrity of transformers and the electricity supply grid, thus improving distribution. In South Africa, AI-based electricity transmission and distribution solutions can generate a total revenue of USD 4.2 billion by 2026.
In addition to addressing South Africa's electricity supply problems, investment in 4IR technology can also help unlock its economic potential. A recent study by the South African government showed that investing in 4IR technology in the energy sector could lead to a potential increase in economic growth by 2.5% over the next five years. This trend is on the rise, with the government recently allocating ZAR 1.5 billion to the Tshwane 4IR hub to speed up the development and adoption of new technologies.
ERP Myths & Truths
By the end of 2023, 65% of businesses will use AI-based ERP strategies. Due to more companies considering adopting, switching to, or maximising the value of their existing ERP investment. Skyrocketing inflation, the ongoing Russia-Ukraine tension and general uncertainty result in companies understanding that ERP is an attractive option, as there is an increasing demand for transparency, accountability and resilience in the face of these challenges. Our research confirms that the key performance indicators that ERPs have improved are supply chain optimisation, customer profiling and gaining business process insights. However, the fast-paced development of ERPs has led to many myths and misperceptions about their relevance, management, and value. Next week’s webinar with SYSPRO EMEA’s CEO Mark Wilson, Frost & Sullivan Africa CEO Hendrik Malan and myself will dispel 16 common myths across the four lifecycle phases of ERP systems, from deciding to adopt, selecting, implementing, and the ongoing management of an ERP. Do not let myths or misconceptions restrain your company from maximising the value of your ERP. Join our webinar for constructive input into the process and dispel any misconceptions about ERP systems.
Register for free today: https://lnkd.in/d3XEupRX
African Governments Investing into the Continent
With rapid urbanisation, the worsening effects of climate changes and the economic impacts of the COVID–19 pandemic, African cities are in greater need of access to technical and financial support. Poor infrastructure continues to hinder economic growth in sub-Saharan Africa as businesses suffer from a lack of reliable power or transportation costs are too high to transport goods to the market. Furthermore, a lack of clean and safe water threatens millions of lives daily. To mitigate the potentially devastating impacts of rapid urbanisation, African cities need greater access to technical and financial support to advance toward a climate resilient – low carbon future.
Frost & Sullivan has therefore tracked infrastructure project investments throughout the region. It was noted that Africa’s infrastructure financing needs are vast and are estimated to be around $170Bn by 2025, with a financing gap of $100Bn; however, increased investment into the region has spurred some optimism as more international financiers enter the market. Already funding for projects is dominated by African governments, which held on average 41.5% share (2016-2020), but private sector investment is rising, reaching about 20% by 2020.
To expand further on these investment trends, Frost & Sullivan’s Hendrik Malan and Craig Parker, and Africa investor’s (Ai) Dr Hubert Danso will host a Think Tank on the 16th of February 2023.
To secure your spot please click here to: https://www.brighttalk.com/webcast/5562/573395.
The Growth of Green Hydrogen in South Africa
The ongoing Energy Crisis in South Africa has been a watershed moment for the increased development of innovative, renewable energy relief programmes. The Renewable Energy Independent Power Producer Program (REIPPPP), and ‘Hydrogen Valley’ are key examples of expansion within the energy sector in South Africa. The hydrogen valley project, stretching over 835 kilometres, is an integrated ecosystem spanning from Mokopane, through to Johannesburg and ending in Durban. Proposed in 2020, and scoped in 2021, the valley represents massive benefits, for both the economy and the environment. An independent feasibility study indicates that the project has the potential to contribute between USD 4 billion – USD 9 billion to South Africa’s gross domestic product (GDP). This is a substantial addition, as, according to StatSA, South Africa’s GDP has risen above pre-pandemic levels and grew by 1.6% in 2022. The hydrogen valley will therefore bolster this growth and secure long-term employment. This project is a vital component of the third phase of the national Economic Reconstruction and Recovery Plan. Additional projects include the Sasol Boegoebaai facility in the Northern Cape and the COALCO2-X entity in Mpumalanga.
Moreover, in 2022, 9 green hydrogen projects were identified as Strategic Integrated Projects. As a result, over ZAR 300 billion is in the pipeline. Overall, these projects align with the South African Hydrogen Society Roadmap, developed by the Department of Science and Innovation, which aims for net zero emissions by 2050. The green hydrogen market is estimated to reach USD 89 billion in 2030. South Africa is set to be a key player within this industry – forecasted to capture 4% of the export market by 2050.
Remote Patient Monitoring in South Africa
Remote patient monitoring (RPM) involves monitoring patients outside of hospitals, clinics or traditional medical facilities using technology. The main purpose of RPM is to increase access to healthcare by reducing the cost of healthcare and through connecting patients in remote or resource-scarce areas to medical professionals.
In South Africa, where private healthcare is prohibitively expensive for most of the population, many rely on public health services. It is therefore unsurprising that health expenditure comprises a large proportion of the national budget. In particular, expenditure on hospital services contributes significantly to overall health expenditure. In the 2019/2020 fiscal year, the nine South African provinces spent a combined ZAR125,6 billion on hospital services, equal to 61% of overall healthcare expenditure in the country. It is estimated that RPM could decrease the cost of healthcare by 40% through reducing hospitalisation rates. A further benefit of RPM is that it reduces the demand for limited hospital resources such as hospital beds. At a meagre 2.8 beds per 1,000 people, the number of hospital beds in South Africa falls below the minimum of three beds per 1,000 people recommended by the World Health Organisation and far below other emerging developing countries such as China (4.7 beds) and Russia (7.6 beds).
Digital health startups such as Quro Medical, founded in 2018 in South Africa, are using technology to improve the affordability and accessibility of healthcare through offering RPM services. In 2021, Quro Medical secured USD1.1 million in funding and counts more than 90% of South African medical insurance schemes amongst its clients. Quro’s apparent success signals that the market is ripe for growth, and South African patient monitoring market is expected to register a compound annual growth rate of 5.5% between 2023 and 2028.
Upcoming Webinar: Dispelling Myths about Enterprise Resource Planning Systems
Increasing geopolitical tensions and supply chain shocks push executives to adopt and implement digital solutions such as Enterprise Resource Planning (ERP) technology to minimise disruptions and continue running the business. However, adopting and implementing such systems can have various outcomes, leading to misconceptions (truths and myths) about this business software.
To truly maximise the benefits of any ERP system, it is crucial to have the right expectations, which is why SYSPRO and Frost & Sullivan Africa have developed the ERP Myths & Truths Dispelling Misconceptions About Enterprise Resource Planning Systems.
Join the webinar on Wednesday 22 February at 10h00 SAST as Frost & Sullivan Africa's CEO Hendrik Malan, and Sisonke Mgwebi address and discuss the myths surrounding ERP systems and uncover the truth about this software.
Register for free today: https://lnkd.in/d3XEupRX
Upcoming Event: Africa's Green Economy Summit 2023
Frost & Sullivan Africa is excited to announce that its CEO Hendrik Malan will be speaking on "Infrastructure Opportunities in Africa" at the first Africa's Green Economy Summit taking place in Cape Town from 22 – 24 February 2023.
The summit will focus on connecting global capital and green economy projects across the continent and is an official event of E-FEST Cape Town. Join industry stakeholders for this important and pioneering event that will shape the future of our province and the African continent.
Book your ticket today: http://bit.ly/3tYCnMJ
Upcoming Event: Africa Energy Indaba 2023
Frost & Sullivan Africa's Energy Expert, Patrick Prestele will participate in a panel discussion on “Hydrogen for Africa” on 8 March at the CTICC in Cape Town.
Join the Africa Energy Indaba from 7 – 8 March 2023 as it hosts a stellar line-up of speakers discussing and shaping solutions to Africa’s energy challenges.
Get your ticket today: https://lnkd.in/dRtVe_Mk
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
