Seeds of Opportunity: The African Growth Series
June 2024 | Issue 2
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: Botswana's Diamond Industry Poised for Growth and Transformation
- AFRICA OPPORTUNITY: Apple and OpenAI’s Partnership Impact on Africa
- AFRICA TREND: Tackling the Climate Crisis: Africa's Path to a Sustainable Future
- AFRICA TREND: Despite 72 Consecutive Days of No Load-shedding, South Africa is Not Yet Out of the Dark
- AFRICA TREND: Cryptocurrency Use in Africa
AFRICA OPPORTUNITY: Botswana's Diamond Industry Poised for Growth and Transformation
Botswana, now the world's second-largest diamond producer, has transformed from a poor nation to one with the highest average income in Africa, thanks to its partnership with De Beers Group. As the country seeks to further its diamond industry, De Beers has announced it is relocating De Beers Group Auctions headquarters from Singapore to Gaborone, enhancing efficiency and supporting the development of key diamond industry skills.
The country is poised for further growth with Botswana owning 50% of Debswana Diamond Company and 15% of De Beers. President Mokgweetsi Masisi is pushing for a better deal to gain more control over the industry and downstream processing. As technology improves traceability, Botswana also has an opportunity to market its diamonds as ethically sourced.
AFRICA OPPORTUNITY: Apple and OpenAI’s Partnership Impact on Africa
On 10 June 2024, Apple and OpenAI announced their partnership to the world, bringing artificial intelligence into the Apple operating system. This will have unknown consequences for the brand but could present new opportunities to firms in the industry. By partnering with a company solely focused on advancing its AI program, Apple is outsourcing an incredibly important part of the iPhone’s performance: Siri. This will catalyse immense improvements in Siri’s capabilities and function, giving iPhones a cutting-edge comparative advantage over other smartphone brands.
That being said, a mere 13.3% of Africa’s population uses an iPhone, with nearly 85% choosing Android phones as of October 2023. This is because Android phones are comparatively cheaper than iPhones, with the average price of an Android phone being approximately US$286. iPhones cost significantly more, with the latest model coming in at US$800. Furthermore, Android phones are equipped with the full suite of Google-affiliated AI tools, meaning that Google AI has a much greater market capture capacity in Africa than OpenAI. Therefore, Apple and OpenAI must work hard to penetrate the African market and compete with Google-powered Android phones.
AFRICA TREND: Tackling the Climate Crisis: Africa's Path to a Sustainable Future
The climate crisis has reached unprecedented levels worldwide, with extreme weather events becoming increasingly common. With its diverse climates, Africa is expected to warm faster than the global average, posing severe risks to its populations. Already, the effects are devastating livelihoods across the continent. Droughts and floods are intensifying, reducing agricultural productivity and increasing Africa's dependence on food imports. In 2022 alone, over 110 million people across Africa were directly impacted by climate change.
To minimize these impacts, Africa must engage comprehensively in climate action. This involves transitioning to green economies, developing country-specific green growth strategies, and embracing sustainable development practices. By investing in renewable energy, enhancing climate resilience in agriculture, and promoting sustainable urbanization, African nations can turn the tide on climate change.
Furthermore, taking decisive steps to address climate change can have significant socio-economic benefits. Green initiatives can create jobs, stimulate economic growth, and reduce poverty. By leading the way in sustainable practices, Africa can protect its environment and ensure a prosperous future for its people.
The time for action is now. Let’s support and drive the transition to a greener, more sustainable Africa.
AFRICA TREND: Despite 72 Consecutive Days of No Load-shedding, South Africa is Not Yet Out of the Dark
New Eskom boss Dan Marokane warns that “the country is not yet out of the woods” regarding a more reliable energy supply. However, he emphasised that it was important to acknowledge the visible progress that ESKOM has made toward where it needs to be to ensure a more stable and reliable energy supply.
Kusile and Medupi coal-fired power stations are set to come online this year, contributing significantly to capacity and reserves that are badly needed to improve energy security. Dan Marokane reassures that all concerned global partners involved in the global funding program for the multi-billion rand pledge that ESKOM received in support of its Just Energy Transition Investment Plan (JETIP) (in return for a number of decarbonisation commitments) have been met. The rational and technical course adjustment behind the requirement for the operations of these fossil-fuel powerhouses has been explained.
In addition, there has also been a huge push towards transmission expansion, which translates to the ability to bring major new capacity online. With 300 projects in place to help expand the grid and the 14,000 km of planned new transmission lines, ESKOM is well-positioned and making visible progress. This year, in particular, Transmission CEO Segomoco Scheppers has confirmed that projects in the definition phase have increased from 5 to 22 from the previous financial year, whilst projects in the execution phase have increased from 0 to 11.
AFRICA TREND: Cryptocurrency Use in Africa
The worldwide use of cryptocurrency has exploded over the past decade, with a compound annual growth rate (CAGR) of 99% between 2018 and 2023. The use of digital currency for purchasing goods or investing has skyrocketed, with the greatest use exhibited in the United Arab Emirates (2.4 million people; 25.3% of the UAE population). Additionally, Asia has the highest concentration of cryptocurrency users, 326.8 million people. Conversely, Africa’s uptake has been slower than the global CAGR, with users growing from 40.1 million to 43.5 million in 2023 (8.5% CAGR).
In the figure, respondents to a Statista survey indicated their involvement in the cryptocurrency world, indicating that nearly half of the Nigerian population has either owned or used a digital coin. South Africa is the runner-up in Africa for cryptocurrency use, with 22% of respondents indicating their involvement with a virtual currency. Kenya and Egypt are alike with their 19% share of cryptocurrency users, with Morocco bringing up the rear with 16%.
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
