Seeds of Opportunity: The African Growth Series
October 2024 | Issue 1
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: Using Oil Rents Strategically
- AFRICA OPPORTUNITY: Nigeria's Digital Free Zones to Drive Tech and Finance Innovation
- AFRICA TREND: The Growth of Mobile Telecoms
- AFRICA TREND: The Growth of the IT Services Market
- UPCOMING EVENT: CRITICAL MINERALS AFRICA SUMMIT | CAPE TOWN, SOUTH AFRICA
AFRICA OPPORTUNITY: Using Oil Rents Strategically
Despite efforts towards decarbonisation, the demand for crude oil is still forecasted to grow until 2045 (albeit at a slower rate). This extends the window in which Algeria, Libya, and Nigeria (Africa's top 3 oil producers) can leverage a significant opportunity. Three important outcomes could occur should each country's government choose to use the revenues generated from oil production strategically. Firstly, reinvestment into other sectors will increase diversification within their economies and mitigate the adverse effects of oil-related shocks on their respective economies. Secondly, investment in other, more labour-intensive industries like manufacturing could bolster sustainable employment. Lastly, reinvestment in education and upskilling the existing labor force will increase GDP over the medium-run and long-run. However, these outcomes will critically depend on each government's willingness to make bold, forward-looking decisions.
AFRICA OPPORTUNITY: Nigeria's Digital Free Zones to Drive Tech and Finance Innovation
Nigeria's new initiative to create digital free zones is set to position the country as a global hub for technology and finance. With modernised regulations, tax incentives, and simplified processes, these zones are designed to attract investment and spur economic growth. Chaired by President Bola Tinubu, this move aims to boost Nigeria’s digital economy, creating jobs and facilitating foreign exchange inflow.
AFRICA TREND: The Growth of Mobile Telecoms
There is an increased demand for internet connectivity throughout the continent. Although investment in traditional ICT infrastructure (e.g., cable internet) has continued to grow, using mobiles is another way to meet this demand. Since smartphones have become cheaper and more readily available, adoption rates have significantly increased, leading individuals to be connected to the internet. In 2023, the number of mobile internet users was 261.64 million. This is forecasted to grow to 700.57 million users by 2029 - more than twice as much as in 2024! 3G and 4G will be the most prevalent mobile telecommunication technologies by 2030. Each is expected to account for 33% and 48% of all mobile technologies. 5G technology has started penetrating the market since 2021 and is forecasted to account for 17% by 2030. These trends all suggest that Africa is set to become more digitally connected than ever!
AFRICA TREND: The Growth of the IT Services Market
The IT Services Market in Africa is estimated to be USD 22.77bn - with West- and Southern Africa contributing USD 4.01bn and USD 6.58bn, respectively. Nigeria and South Africa have the most developed IT Services industries in Africa. Nigeria contributes over 50% of all revenue from West Africa, whilst South Africa contributes over 93% of all revenue from Southern Africa. Business processing and IT outsourcing are the revenue drivers in the industry for both countries. The industry in both countries is expected to grow by at least 27% over the next five years. Developing service-based industries will help Nigeria and South Africa (1) reduce their dependence on income generated from natural resources and (2) create more employment in this high-growth industry. These two outcomes are critical for sustainable, long-term growth in both countries.
UPCOMING EVENT: CRITICAL MINERALS AFRICA SUMMIT | CAPE TOWN, SOUTH AFRICA
Frost & Sullivan Africa is delighted to announce that we have partnered with the Critical Minerals Africa Summit (CMA), which will take place from 6 to 7 November at the CTICC (Cape Town International Convention Centre) in Cape Town, South Africa.
The summit serves as the African critical minerals dealmaking space, standing at the intersection of energy and mining, linking global consumers and producers, and bringing global capital to African projects.
🌍 Join us at the largest gathering of critical mineral stakeholders in Africa.
🔗 Book your delegate pass: https://bit.ly/3XVVVjl
🔗 For sponsorship, exhibition, and delegate inquiries, get in touch: https://bit.ly/3YcInRM
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
