Seeds of Opportunity: The African Growth Series
October 2022 | Issue 4
In this week's issue, you will learn more about:
- Zambia: Africa's strongest Currency and Africa's Largest Copper Producer
- Humans, Our Most Crucial Resource
- The South African Energy Crisis: Opportunities and Innovation
Zambia: Africa's strongest Currency and Africa's Largest Copper Producer
In the last few years, the global economy has been sent into a tailspin off the backend of the COVID – 19 pandemic and the invasion of Ukraine by Russia. For several African countries, economic challenges had been brewing even before these global crises, as debt obligations rose and commodity prices continued to fall. However, in Zambia, the Zambian Kwacha has risen to become one of the best-performing currencies in the world, gaining 15% in 2022 and quoted at 15,93 to the US dollar as of October 2022. Since coming into power in August 2021, Zambian President Hakainde Hichilema has made significant efforts to turn the economy around by reorganising its foreign debt and making it sustainable. In September, Zambia signed a crucial deal with the International Monetary Fund (IMF) for a bailout loan amounting to USD 1.3 billion. This and various monetary and fiscal measures have contributed to the Zambian economy’s strength. These include removing customs duty on importing cattle and chicken breeding and restoring foreign investors’ faith in the country’s copper production.
In 2021, Zambia’s exports increased by 14,2% to USD 5.9 billion, where copper exports contributed USD 4.4 billion to the total earnings that year. As one of Africa’s largest copper producers, copper production is one of the reasons Zambia has one of the strongest currencies on the continent. As copper is the most prevalent metal in the country, copper mining is carried out on a massive scale, which provides Zambia with a significant rise in foreign currency earnings.
Humans, Our Most Crucial Resource
Intermittent load shedding and fluctuating petrol prices push offices into being half-occupied rooms with employees, leaving their cameras off when dialling in for team or client meetings. These concerns drive employees worldwide to look for a job that allows them to work from home occasionally. Research reveals that more than half of South Africa's workforce is seeking work-from-home flexibility, with some studies going up to 95%. Corporate Africa echos global trends hence, the hybrid work environment is here to stay. More forecasts further solidify that digitalisation is popular within the worldwide Human Resource (HRTech) technology market and this could grow from US$47 billion in 2019 to US$66 billion in six years. Similar numbers reveal that funding for HR startups (in particular) could quadruple over the same period. SeamlessHR is a Nigerian startup that has taken advantage of the quadrupling market and raised $10M by the beginning of 2022 to expand HR and payroll solutions across the continent. Investors understand that this market is here to stay hence there are 7 other African other HRTech Startups in Africa such as Africa's Talking in Kenya, and others in over 25 African countries that have accumulated a total of USD$57.7 million by 2022.
The South African Energy Crisis: Opportunities and Innovation
The South African Energy Crisis, otherwise referred to as ‘loadshedding’, has resulted in the country being without power for over 2,000 hours in 2022 alone (as of the end of October). The direct ramifications of the insecure energy supply has affected multiple sectors and resulted in severe damage to the economy. However, in the wake of this Crisis, developments in renewable energy have grown. In fact, South Africa is perfectly positioned to harness renewable energy, as evidenced by the region’s climate capacity to exceed 4.5kwh of solar power per day. However, despite the country’s perfect condition for maximum energy capturing, South Africa has not fully reached its potential in this energy field. This appears to be a continent-wide constraint, as indicated by the staggeringly low solar photovoltaic (PV) installation rate of only 1% within Africa. With that being said, solar PV has been forecasted to be the main source of renewable energy in South Africa’s energy transition. Innovation in this space is clear in start-ups like SlideLurve, which has developed a one-of-a-kind panel that is capable of generating energy in the shade through the use of high-efficiency solar cells. SlideLurve has been recognised as an Energy Investment Village finalist for its contribution to the renewable energy sector. This is one of many renewable energy start-ups generating innovative products that will make a difference in the renewables sector.
To find out more about opportunities in Africa, please contact Lynne Martin.
