Seeds of Opportunity: The African Growth Series
January 2022 | Issue 3
In this week's issue, you will learn more about:
- Africa's opportunity for Natural Gas
- Fintechs in Africa
- Driving resource efficiency in Kenya
Natural Gas Opportunity in Africa
Africa’s energy sectors and economies are slowly overcoming the large-scale impacts of the Covid-19 pandemic, with nations across the continent slowly rebounding. Governments are looking to diversify their energy mix, attempting to decarbonise and decentralise their energy sectors, spurred by the global pressure for energy transition. This is everything but an easy task, with limited funding, ailing infrastructure and poor legislation, the Sustainable Development Goals (SDG) for 2030 seem like an unattainable task. But recent discussions held by the European Union (EU) might just help the process along considerably. Because natural gas burns up to 52% cleaner than oil or coal, the EU is weighing up the benefits of characterising natural gas as sustainable and green. This would have far-reaching impacts on the natural gas economy in Africa, with Europe and other developed nations looking to diversify their supply of natural gas, attracting DFI’s to Africa. Natural gas has long been viewed by African governments as the base electricity supply source, which coupled with other renewable sources can bring about the targeted electricity access rates outlined by the SGDs.
Fintechs In Africa
Watch out! The number of fintech companies throughout Africa has grown by 89% between 2017 and 2021. With the most recent surge being 17% between 2019 and the end of 2021. Africa has 25 countries with active fintech startups, but South Africa is the most populated market with 154 companies and accounts for 27% of the 576 ventures on the continent. Nigeria is a close second, with 144 fintechs making up 25% of Africa’s total. The third is Kenya, with 93 companies making up 16% of the total.
Africa’s largest market segment is Digital Payments, with its total transaction value almost tripling from $32m in 2017 to $94,5m in 2021. Digital Investments growing almost ten-fold from $2,5m in 2017 to $20m in 2021. The third budding segment is Neobanking hit a ten-fold increase from $0,3m in 2017 to $3,7m in 2021.
Fintech is growing and here to stay.
Driving Resource Efficiency in Kenya
Africa is in the dawn of a booming renewable energy environment and increased focus on innovation and sustainability to drive resource efficiency. Countries with enabling regulatory environments, policies, and national energy plans are absorbing some of the investments at this time. In East Africa, Kenya is among those at the forefront with noteworthy investments into multi-sectoral mini-grid power infrastructure, green housing, green manufacturing, clean cooling, and transportation (including electric cars).
In its most recent development, Nopea Ride, an electric taxi service operator established in 2017, has announced plans for a new solar hub to power its fleets. The solar hub will be positioned at six location points across Nairobi. These charging stations will be the first of their kind for Kenya but will provide the foundation for demonstrating the key value for pairing electric mobility with solar technology in the climate change fight.
To find out more about opportunities in Africa, please contact Lynne Martin.
To find out more about opportunities in Africa, please contact Lynne Martin.
