Seeds of Opportunity: The African Growth Series
September 2024 | Issue 1
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: Transforming Agriculture through Automation
- AFRICA TREND: Rail Infrastructure Investment Set to Transform Economies
- Africa Trend: Electric Vehicle Uptake in Africa
- AFRICA OPPORTUNITY: Southern African Countries’ Window to Leverage Titanium
- AFRICA TREND: E-Commerce in Africa
AFRICA OPPORTUNITY: Transforming Agriculture through Automation
Africa's agricultural sector, employing over 60% of the workforce, is on the brink of a technological revolution. With the agribusiness market projected to reach USD 1 trillion by 2030, the adoption of advanced automation can significantly enhance productivity and efficiency. Companies and governments are increasingly investing in this transformation, paving the way for sustainable growth.
AFRICA TREND: Rail Infrastructure Investment Set to Transform Economies
Africa's rail infrastructure is on the brink of a renaissance, with an estimated USD 105 billion needed annually until 2050 to enhance connectivity. The U.S. is investing USD 250 million in the Lobito corridor, aiming to secure critical minerals for green energy. This strategic shift, driven by geopolitical rivalries, presents a unique opportunity for African nations to revitalise trade routes and attract further investments.
Africa Trend: Electric Vehicle Uptake in Africa
A significant development was observed in Ethiopia in February, as the national government banned the import of fossil-fuel-driven vehicles into the country. This is the next step in encouraging more environmentally sustainable practices, and follows several policies oriented to the same goal. Ethiopia receives 96% of its energy from hydropower and has taken steps to discourage fuel-powered cars by setting a 200% tax on fossil-fuel vehicles and banning leaded gasoline.
The ban on importing fuel-powered vehicles will catalyse an uptake in the purchase of EVs, which will require infrastructure investment in the form of public charging stations. Currently, Ethiopia has 50 charging stations, 10 of which are functional and publicly accessible. This highlights a critical gap in EV uptake, as there are reportedly 100 000 EVs in Ethiopia.
The overall perspective of this development is the movement towards sustainable modes of transport, particularly two-wheelers, which are popular in many African countries. However, significant investment is required to maintain the gas-vehicle ban and support consumers transitioning to EVs.
AFRICA OPPORTUNITY: Southern African Countries’ Window to Leverage Titanium
Titanium is often underappreciated compared to other metals. In fact, it doesn't even rank in the top 10 metals by market size or most traded metals. However, such metrics cloud its importance. Titanium is found in almost every manufactured product, from your tablet to car components. Given that titanium is critical in electronics, and that demand for electronics is increasing rapidly, an increase in the demand for titanium is inevitable.
The size of the global titanium market is expected to increase by almost 70% by 2030 (from USD 30.66bn to USD 51.89bn). While China is the leading producer with the largest reserves, South Africa, Mozambique, and Madagascar feature in both the top 10 producing countries and the top 10 countries with the biggest reserves. Given at least 30 years’ worth of titanium reserves left with current production rates, these countries should seize the opportunity to meet the expected market expansion by increasing yearly production. This short-term opportunity could create extra revenues that could be reinvested in other sectors. This would reduce these countries' dependence on this extractive industry in the long run. However, policy at both local and national levels is and will continue to be critical.
AFRICA TREND: E-Commerce in Africa
Digital transformation is quickly happening throughout the continent. This has led the way for a young but growing E-commerce industry. The number of E-commerce users in the African market is expected to reach 128.62 million people by 2027. With this number rising, more than 50% of active users are expected to be from Nigeria, Egypt, and South Africa. Out of the three, Nigeria is forecasted to have the biggest increase in user growth between 2024 and 2027, while South Africa is forecasted to have the largest average revenue per user in 2027. Interestingly, consumer behaviour is similar across countries, as clothing and shoes are at the top of the list for online purchase categories.
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
