Seeds of Opportunity: The African Growth Series
March 2024 | Issue 2
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: Electric Vehicles: The Next Great Investment
- AFRICA OPPORTUNITY: African Leaders on African Growth
- Africa's Industrial Revolution: The SEZ Blueprint
AFRICA OPPORTUNITY: Electric Vehicles: The Next Great Investment
Global climate change demands a global response, which has taken the shape of NEVs and less-impactful practices. This presents Africa with a unique investment opportunity, as the worldwide supply chain requires new components such as light- and commercial-duty vehicle batteries and charging infrastructure. This shifts the market away from internal combustion engine (ICE) vehicle components, fuel tanks, and catalytic converters.
As it stands, Africa controls a large portion of critical minerals involved in battery cell manufacturing, such as manganese and cobalt. Thus, Africa can become the new global manufacturer of NEVs by capitalising on the abundant labour force and mineral control. This would greatly benefit the economies of many African countries by attracting foreign investment and expanding Africa’s role in the global supply chain. Governments are supporting this process by offering incentives and subsidies to manufacturers to make the transition more attractive.
AFRICA OPPORTUNITY: African Leaders on African Growth
The Economist published a letter that was jointly written by Nana Akufo-Addo, William Samoei Ruto, and Hakainde Hichilema, the presidents of Ghana, Kenya, and Zambia, respectively, which synopsised the steps needed to restructure the global financial environment to balance the scales in Africa’s favour. For far too long, Africa has been the source of labour and raw materials that uphold foreign beneficiation practices for products sold back to nations at inflated prices. Vital aid is lent on the condition of subordination, with hoops and barriers that prohibit Africa from rising above the poverty line.
To achieve this, the letter states that African leaders must participate in globally-made decisions impacting the continent rather than have global agreements imposed without the nation’s input. Additionally, solutions to Africa’s growth, income generation, job creation, and development must come from within its borders, as opposed to overseas trading partners with high capital costs and uninformed economic evaluations. Lastly, Africa’s reform agenda must be uniformly supported to sufficiently advocate for Africa’s seat at the table. The legislation, written in cooperation with the UN, the African Union, and civil society, set out a green growth and investment path, a financing and development finance leverage plan, a debt-restructuring blueprint, and a target to improve Africa’s role in global decisions.
The letter concludes with a pledge to move from talk to action, demonstrating an immense commitment to the realisation of Africa’s true potential. Watch this space, World. Africa is rising.
Africa's Industrial Revolution: The SEZ Blueprint
By embracing 4IR technologies within Special Economic Zones, Africa can create a blueprint for sustainable, inclusive industrialisation.
Africa possesses immense potential for economic transformation. With AI adoption in the region expected to grow by 18% by 2030, we have an unprecedented opportunity. Today, I want to focus on how Special Economic Zones can harness Fourth Industrial Revolution technologies to accelerate industrialisation.
Traditional SEZ models have had mixed results. To achieve breakthrough success, Africa needs a new approach. This means integrating technologies like machine learning, blockchain, and industrial automation into the core of SEZ development. Imagine streamlined production lines, transparent supply chains, and the emergence of entirely new tech-driven industries. This is the future of SEZs in Africa.
Government has a critical part to play in this transformation. Proactive policies that incentivise AI adoption in SEZs will be essential. Additionally, targeted investment in upskilling the workforce will bridge the digital skills gap and ensure Africans benefit from these advancements.
Let's be clear, widespread AI integration across Africa won't happen overnight. Infrastructure limitations and the need for responsible AI governance remain key challenges. However, by proactively addressing these issues within SEZs, we create innovation sandboxes to drive broader adoption throughout the continent.
SEZs offer a focused environment to implement and refine 4IR technologies tailored to African realities. By doing so, we unlock new industries, create sustainable jobs, and position Africa as a competitive player in the global digital economy. The time for action is now.
Learn more from Consulting Analyst Hannro Steenekamp, as he unpacks Africa's path to industrialization through 4IR-powered SEZs.
For more expert information on opportunities on the continent, contact Lynne Martin at lynne.martin@frost.com.
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
