Seeds of Opportunity: The African Growth Series
April 2022 | Issue 1
In this week's issue, you will learn more about:
- Africa’s Opportunity to supply Natural and Sustainable Gas to the EU
- Banana ‘paper’ which helps fight destructive potato pests
- Africa's Healthcare and AI
- 'Milestones' in Strengthing Africa's Agricultural Sector
Africa’s Opportunity to supply Natural and Sustainable Gas to the EU
The European Union’s (EU) recent proposal to end imports of Russian gas before 2030 given the formers invasion of Ukraine is offering a massive opportunity to Africa to increase its exports to the European continent. EU currently relies on Russian gas for 40% of its natural gas supply, with EU leaders seeking to offset this supply with sustainable gases such as green hydrogen and biogas. While sustainable gas supply from Africa is certainly a possibility and should definitely be further developed, in the short-term increased natural gas supply to Africa offers a greater opportunity given the constraints such as lacking policies and regulations, infrastructure, financing and skilled workforce. The geographic proximity to Europe makes North Africa countries strategic suppliers. Total natural gas reserves in Africa accounted for over 620 trillion cubic feet (tcf) in 2021. Nigeria is home to the largest deposits (203 tcf) while North Africa (Algeria, Libya and Egypt) account for nearly half of the continent's total gas reserves, with Algeria concentrating 159 tcf alone. Algeria is the main producer on natural gas in Africa, followed by Egypt and Nigeria. Naturally, these three countries are the continent’s major exporters of over 95 billion cubic meters (bcm), of which 60% were supplied to Europe via pipelines of LNG. Considering current levels of production, natural gas in Africa would last for around another 55.7 years. In 2020 alone, the continent produced 231 bcm of natural gas, representing a production growth of more than 70% in output levels compared to 2000. The opportunity for Africa to establish itself as a major natural gas supplier in the short-term to the European markets and sustainable gas supplier (hydrogen and biogas) in the medium to long-term are plentiful, but the continent needs to place the correct foundation in place to attract funding, establish local demand markets and develop export relationships of these clean energy resources with the global markets.
Banana ‘paper’ helps fight destructive potato pest
Potato farming is East Africa’s second most stable crop. In the last 20 years production has increased from 1.6 million to 3.4 million metric tonnes making it a very important crop for the region. However, countries such as Kenya, Uganda and Rwanda are plagued by destructive pests called Potato Cyst nematodes (PCNs) which cause significant production losses greater than 60%. PCNs are microscopic worms that live on the roots of plants and cause damage to potatoes, causing leaf wilting and discolouration, root cysts, reduced roots, dwarfing of the plant and fewer crops. However, a recent study found that wrapping potato seeds in a paper developed from the recyclable banana plant waste, reduces PCN infestation, increasing potato yield five-fold. This organic technology combats these highly destructive pests while dramatically reducing the need for pesticide use. Furthermore, the technology has the potential to boost yields as well as aiding businesses supplying the paper.
Africa's Healthcare and AI
Medical Artificial Intelligence (MAI) is automating human thinking processes such as learning, decision-making and problem-solving for healthcare issues. Computers running complex algorithms to alleviate the strain on Africa’s healthcare sector exists in pockets across the continent. The Nigerian start-up Ubenwa has an MAI app that analyses a baby’s cry to give warning signs of asphyxia. Zipline uses MAI and drones to deliver blood to transfusion centres in Rwanda's remote areas. Zambia's Dawa Clinic MAI self-monitoring app enables mothers in rural areas to share medical information with a doctor and receive remote maternal health. However, the implementation of these MAI services falls short of its potential due to data, regulations and costs. Africa is slow to digitise, with medical facilities in remote areas using pen and paper for their medical records. This provides low-quality and inadequate datasets for training MAI models to solve local problems. There are few enacted laws dictating the responsibility for adverse outcomes resulting from using AI in healthcare. Current legal action uses existing laws, but gaps between conventional law and AI-related errors will have legal implications for users and patients. The cost of developing an MAI solution in developed countries ranges from USD 6,000 for a simple chatbot to as high as millions of dollars for complex solutions. However, global investment hit about USD 6.6 billion in 2021 and could help save USD 150 billion in costs by 2026. A portion of that capital and cost savings will go to Africa, so addressing the rest of the restraints will allow the sector to grow.
'Milestones' in Strengthing Africa's Agricultural Sector
Africa’s agricultural sector may reach important milestones in 2022 and beyond as financial and technical support increases. The sector, which remains a pillar for several economies on the continent, generating export revenues, a source of employment, and ensuring food security, still has untapped potential in many communities. However increased support from DFIs like the African Development Bank (AfDB) and development foundations (The Rockefeller Foundation) is now targeting catalysing economic development in some of the continent’s high productive regions by increasing agro-processing, and building supporting infrastructure (road networks) and driving sustainability through leveraging renewable energy technologies in underserved communities. Mozambique, Niger, and Nigeria are among those benefiting recently.
The key developments in the pipeline include; establishing the Pemba-Lichinga Integrated Development Corridor in Mozambique, opening up agricultural areas in Niger through improving transport networks, and linking mini-grids to agricultural productivity in Nigeria. The AfDB has approved financing packages of $47.09 million and $127.8 million in Mozambique and Niger respectively. In Nigeria, the program will be implemented through a collaboration between the Rocky Mountain Institute (RMI) and Rural Electrification Agency (REA). In the wake of increasing prices for important food commodities as a consequence of the conflict in Europe, strengthening Africa’s agricultural sector (productivity and value) is imperative for protecting the economies (food supply and jobs) but also an opportunity for leveraging increased export value. Thus the successful implementation of these programs will be an important one for the region.
To find out more about opportunities in Africa, please contact Lynne Martin.
