Seeds of Opportunity: The African Growth Series
May 2023 | Issue 3
In this week's issue, you will learn more about:
- AFRICA OPPORTUNITY: Precision Medicine in Africa
- AFRICA OPPORTUNITY: Investment into Africa’s Water and Sanitation Sector
- AFRICA TREND: South Africa's Loadshedding Woes
- AFRICA TREND: RISING E-COMMERCE
- UPCOMING EVENT: BIG 5 CONSTRUCT SOUTHERN AFRICA
AFRICA OPPORTUNITY: Precision Medicine in Africa
Precision medicine is able to address the rising incidence of noncommunicable diseases across Africa through revolutionising the diagnosis, treatment and prevention of diseases.
Check out the video: https://youtube.com/shorts/y--wj4igkaY
AFRICA OPPORTUNITY: Investment into Africa’s Water and Sanitation Sector
Water is an essential human need, and access to clean water and proper sanitation is a fundamental human right. Yet, millions of people in Africa lack access to these basic services. In 2020, the World Bank reported that over 300 million Africans do not have access to clean drinking water, over 700 million live without good sanitation, and more than 800 million lack or have limited access to basic hygiene services.
Africa’s already limited water infrastructure will likely face increased strain as the continent experiences rapid urbanisation. By 2030, more than 350 million Africans will be living in cities, yet cities are currently running dry, with the liveability of major cities compromised as bulk water supply runs short. Water insecurity is a major developmental challenge in Africa, exacerbated by the climate emergency and the lack of infrastructure development. For Africa to achieve its Sustainable Development Goals for water and sanitation (which means universal access to safe and affordable drinking water, and equitable sanitation and hygiene, by 2030), it will require improved operations and maintenance, efficient management of water resources, strengthened policy and regulatory frameworks and most importantly, consistent investment into water infrastructure.
The investment gap for water and sanitation infrastructure to achieve water security and sustainable sanitation by 2030 is estimated to be about US$ 50 billion annually. However, the current foreign direct investment (FDI) inflow for water and sanitation ranges between US$ 10 billion and US$ 19 billion a year, well below the amount needed, leaving financial deficits between US$ 11 billion and US$20 billion annually. This deficit has caused significant economic and human development costs, resulting in sub-Saharan Africa losing an estimated 5% of its GDP annually due to water shortages or poor sanitation. If this trend continues, African nations could lose up to US$ 50 billion annually due to climate effects caused by water-related hazards.
As governments play an integral role in repositioning the region’s water security and sanitation, a cross-sectoral political leadership at the highest level of governance should be created with a commitment to increase budgetary allocations for water and sanitation activities. Government funding remains the chief and most important source of funding for these projects and, therefore should be centred around efficient sector management. Therefore, governments will need to establish national investment programs which mobilise domestic resources and create predictable and transparent revenues that are backed by strong and credible institutions. By leveraging private and partner financing, governments can further attract private sector capital where opportunities exist to bridge the accessibility gap.
Additional strategic actions to close the funding gap include exploring innovative financing mechanisms that support climate resilience, impact investing and social impact bonds, and blended public-private financing options to attract private capital. Stronger institutional regulations for water investment will also trigger more incentives besides outlining penalties which will boost water efficiency across various industries. Investment programs should be based on solid institutional policies and regulatory frameworks whereby national investment programs can be effective vehicles to scale up accessibility. These programs can be built if anchored in a stable institutional framework with strong government participation, improved intergovernmental coordination, and strengthened oversight, regulation, and reporting.
Africa's Investment Potential in Water & Sanitation.pdf
PDF - 3.4 Mb
With a renewed commitment to water and sanitation, the outlook for infrastructure investment in this sector is positive, with an increase in large-scale private investment expected in the next two years. Ultimately, development partners, donors, and the private sector have a unique opportunity to provide technical and long-term financial commitments through public-private partnerships and innovative co-financing mechanisms that support sustainable water and sanitation investments. By working together to transform the investment outlook and improve water and sanitation throughout the continent, there is an opportunity to ensure a peaceful, prosperous, stronger, and equitable Africa, now and in the future.
With a positive outlook on investment trends in water and sanitation, Frost & Sullivan Africa tracks major infrastructure investments throughout the continent. If you are interested in gaining access to the full database of infrastructure projects, don't hesitate to contact Lynne Martin at lynne.martin@frost.com for a subscription quotation.
AFRICA TREND: South Africa's Loadshedding Woes
Continually worsening loadshedding reaching new records in 2022, its impact on the South African economy and potential mitigation measures will be the key points of discussion at Enlit Africa taking place this week in Cape Town at the CTICC. The country has effectively progressed into stage 8 loadshedding, with continued failures at Eskom's ailing coal power stations causing increasing havoc. But how can the country overcome this crisis? While there are no short-term fixes, several mitigation measures can be implemented to help reduce the energy crisis in the long term, and it's all in the government's hands. Diversifying the energy mix to include more renewables, promoting SHS integration through incentives, increasing energy efficiency in industrial, residential and transport sectors, unbundling Eskom to promote focused and efficient management, and, most importantly, promoting private sector participation through investment opportunities by removing red tape and implementing conducive policies. A crisis like this brings opportunities, and South Africans have repeatedly proven their resilience and ingenuity.
AFRICA TREND: RISING E-COMMERCE
As of 2021, over 497 million people in Africa have internet access and the number of users is increasing almost five-fold from 162 million in 2013 to over 763 million by 2028. Africa’s growing population, low median age, decreasing poverty levels, advancing higher education levels and use of mobile devices drive internet adoption across the continent has led to the Kenyan retail-tech startup Wasoko, formerly Sokowatch, extending its operations to Zambia in its first venture into Southern Africa. The company, initiated in 2016, is revolutionising the informal retail supply chain by offering free same-day delivery of essential goods and financing to informal retail stores across Africa. The platform enables retailers to order products via SMS or mobile app, delivering them through its unique logistics network. After successfully completing over 2.5 million orders for more than 50,000 informal retailers across six African countries and securing a US$125 million Series B funding round from Tiger Global Management and Avenir, Wasoko is ready to expand into Zambia. The firm plans to invest over US$1 million in its first year in Zambia to support local businesses through e-commerce. By setting up a central hub in Lusaka, Wasoko will offer small retailers across the city access to affordable products and working capital financing via a convenient mobile app. Founder and Global CEO Daniel Yu expressed confidence in Zambia's potential, noting its high smartphone usage and a pro-business government. Meanwhile, Wasoko aims to double its service radius across existing locations in Kenya, Tanzania, Rwanda and Uganda, where it has delivered more than 5 million orders to over 200 thousand informal retailers. The company's rebranding coincides with its expansion, signalling its transformation from an East African entity to a pan-African one.
UPCOMING EVENT: BIG 5 CONSTRUCT SOUTHERN AFRICA
Frost & Sullivan Africa Consultant Yaa (Agyare - Dwomoh) Ngonyama will participate in a panel titled ''Investigating renewable energy sources and sustainable energy solutions for power smart cities in Africa'' at the Big 5 Construct Southern Africa on 28 June.
If you’re looking for the latest products and innovative technologies in the construction industry then you should attend Big 5 Construct Southern Africa.
Welcoming thousands of construction industry professionals, the event has an excellent line-up of over 200 local and international exhibitors, who will be showcasing thousands of products and technologies.
Register now for your free pass at https://bit.ly/3LmJzvE and save time by finding the right solutions for your business, all under one roof.
📍 GALLAGHER CONVENTION CENTRE
JOHANNESBURG, SOUTH AFRICA
📅 27-29 JUNE 2023
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
