Seeds of Opportunity: The African Growth Series

In this week's issue, you will learn more about:

AFRICA OPPORTUNITY: Growing Natural Language Processing Market

African startups are turning data into gold, revolutionising the analytics landscape with artificial intelligence, machine learning, big data, and Natural Language Processing (NLP). The continent has over 2,000 distinct languages, and the demand for speech and text-related data drives the NLP market to grow 6-sixfold from just over US$6 million in 2015 to nearly US$44 million in 2024. A prime example is Intella, which was founded in 2021 to tackle the underrepresentation of Arabic in speech-to-text technologies. By 2023, Intella secured US$3.4 million in funding, marking a significant stride in Africa's burgeoning data analytics sector, witnessing surging investment and professional course enrolments. Intella's growth reflects the broader trend in Africa's tech ecosystem, where small and medium enterprises (SMEs) are emerging as significant players in data analytics. Examples include Mauritius's Kuunda, Nigeria's Estate Intel and Voyance, and South Africa's 3DIMO, each carving out niche markets and attracting substantial investments.

However, the sector faces challenges like the ongoing brain drain, with many talented data analysts leaving the continent. SMEs are finding creative ways to access valuable data; Bridge Analytics in Kenya is democratising data analytics for SMEs, aiding in strategic decision-making. These developments underscore the transformative potential of data analytics in Sub-Saharan Africa, signaling a shift towards a more data-centric economic model.

AFRICA TREND: Online Retail and E-commerce Growth

Although Black Friday is over, Africa's e-commerce industry is just starting. With a young and growing population, increasing internet penetration, and widespread adoption of mobile devices, Africa presents a promising opportunity for online retail. The number of online shoppers in Africa is predicted to grow by 9.5% annually from 2022 until 2027, leading to a total revenue of US$59.2 billion. Revenue growth is expected to outpace user acquisition, growing at a CAGR of 12.7% (2022-2027), as it is assumed that current shoppers will continue to increase their annual spending. The leading African countries in this field are Nigeria, South Africa, Kenya, Morocco, and Egypt, and they are home to major players such as Jumia, Konga, Takealot, Amazon, and Kilimall. Africa has the world's youngest and second-largest population, and internet penetration is rapidly increasing thanks to mobile devices and digital payments. The younger audience is leading the way in mobile e-commerce, with Jumia dominating the app charts in Nigeria and Kenya, while SHEIN is the leading app in South Africa. African e-commerce is driven by two key payment methods: mobile money, such as M-Pesa, which empowers rural populations, and cash-on-delivery, which provides convenience and access to a larger group of potential customers. Cash-on-delivery is Africa's most popular payment method, as credit/debit card penetration is generally low across the continent. Africa's unique e-commerce landscape presents exciting opportunities for businesses. By understanding the market's dynamics and embracing innovative payment solutions, online retail businesses can unlock the potential of this rapidly growing region.

AFRICA OPPORTUNITY: Budding Electric Vehicle Market

Africa's electric vehicle (EV) market is budding with potential. Despite a slow start, African nations such as South Africa and Kenya are progressively awakening to the possibilities of the green mobility sector. From 2016 to 2026, electric vehicle sales in Africa and the Middle East can skyrocket from 642 to 45,000 vehicles. This growth is driven by startups and bolstered by changing global policies, such as the EU's proposed phase-out of fossil fuel vehicles by 2035. African nations are developing policy frameworks to encourage EV adoption, with Kenya aiming for 5% of new vehicle registrations to be electric by 2025. Startups mirror the enthusiasm; nearly 50 operate in Kenya alone, focusing on electric two and three-wheelers. South Africa's automotive bodies are drafting policies to stimulate domestic demand for EVs and plan to make the country a hub for EV manufacturing. Zimbabwe is also crafting an EV policy.

Challenges remain, such as consumer awareness, regulatory frameworks and the high cost of EVs. Nevertheless, with Africa's rich deposits of essential minerals for EV batteries and the rise in local assembly investments, the continent is poised to play a significant role in the electric vehicle industry. By leveraging these strengths and overcoming challenges, Africa could become a key player in the global EV market.

UPCOMING EVENT: Africa’s Green Economy Summit 2024

Check out the updated programme brochure which is now ready for you to explore! Dive into the details of Africa's Green Economy Summit, discover its distinguished speakers, esteemed advisory board, and more.

Don't miss out – download now to unlock a world of sustainable opportunities! 🌱

UPCOMING EVENT: Africa Energy Indaba 2024

The Africa Energy Indaba 2024 will be a physical in-person event, with all conference sessions, side events and the exhibition taking place at the CTICC, Cape Town, South Africa from 5-7 March 2024.

The conference will discuss, debate and seek solutions to enable adequate energy generation across the continent. Delegates, drawn from all continents, represent an unrivalled combination of industry experts, project developers, financiers, energy users, government officials and manufacturers.

To register for the conference click here: https://lnkd.in/dRtVe_Mk

To find out more about opportunities in Africa, please get in touch with Lynne Martin.

Lynne Martin

Sales Contact, Frost & Sullivan Africa

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lynne.martin@frost.com+27 21 680 3260