Seeds of Opportunity: The African Growth Series

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

AFRICA TREND: Soaring Prices Slowing Down

Despite global economic challenges, several African countries have seen diminishing or stabilising inflation rates. Notably, South Africa's inflation decreased from a 13-year high of 7.8% in 2022 to 6.25% in 2023. Zimbabwe, known for high inflation, saw a decrease from over 500% in 2020 to 172% in 2023. Regionally, East Africa's rate dropped significantly from 37% in 2021 to 16% in 2023, whilst West Africa saw a drop from 12% to 8% during the same period. Southern Africa's inflation declined from 12% in 2020 to 6% in 2023. However, North Africa initially experienced a dip in 2020 followed by increases in 2022 and 2023.

The lower inflation rates are partially due to lower price increases for non-tradable goods and services, which typically include any locally produced services, such as in the hospitality, health, or education sectors. This is a positive development as these sectors are vital to the local economy. Despite this positive trend, it is important to note that inflation rates are still high. Higher global energy prices and the strong dollar have also indirectly fed through to inflation, via transportation and tradable goods like household products. However, fully eradicating the inflation problem will require increased exports and much greater domestic production to replace imports to counteract the trend.

Overall, the slowdown in inflation across Africa is a welcome development but work still needs to be done. Subsidies and tax cuts have worked to alleviate the squeeze in household incomes, but these temporary measures need to focus their impact and minimise their costs on already-stretched budgets. The interest rate balance continues to be a fine one and requires a flexible act between monetary authorities and legislative players.

AFRICA TREND: Rising Technology Market

With a rapidly growing young and increasingly tech-savvy population, Africa's position in the global technology market is unique. Whilst global regions generally experienced a significant year-over-year decline in funding between 2021 and 2022, Africa stood out by resisting this downward trend and managing a modest growth of 5%, with minimal fluctuations. Since 2019, startups in Africa have received US$11.5 billion in investments, significantly lower than France's US$42 billion and India's US$ 81 billion. Despite receiving lower investments compared to regions like France and India, Africa's technology sector shows resilience and growth potential. With a modest 5% growth in funding amidst global downturns, Africa can sustain and potentially expand its tech market. Suggesting that African tech startups are finding ways to innovate and grow even with limited resources .Shedding light on Africa's resilient yet underutilised potential in the technology sector suggests an opportunity for increased investment, considering the continent's significant population and untapped market possibilities. Africa's technology market, mirroring trends in more developed regions, could be on the cusp of transformative growth, provided it receives the necessary financial support and investment.

UPCOMING EVENT: Africa's Green Economy Summit 2024

Vuka Group will be hosting the summit at the Century City Convention Centre in Cape Town, South Africa, from 21-13 February 2024. The conference will connect the global capital market with green economy projects from across the continent. The theme in 2024 is “Mobilising investments for green growth”. The Summit forms part of the E-Fest Cape Town - a week of special events and entertainment to showcase sustainability, e-mobility and renewable energy solutions, with the clear message to GO GREEN AFRICA! 

As a key partner, Frost & Sullivan Africa would like to give the opportunity to its network of project owners to list their projects and potentially participate at the investor pitching event at no cost. The companies who get selected will get the opportunity to participate in the project pitch – whereby they will be given the opportunity to present their green project to qualified investors in order to acquire funding and gain feedback. 

Projects will be categorised by green economy sector and size – companies in Renewable energy, Electric Mobility, Waste Management and Water services are encouraged to apply. The 10 min presentations (5 min pitch and 5 min Q&A) will take place during the extended coffee breaks and lunch. 

You can list your project here: https://lnkd.in/dDtqYUEA

UPCOMING EVENT: Africa Energy Indaba 2024

I am excited to announce that Frost & Sullivan Africa once again comes on board as an Endorsing Partner at the Africa Energy Indaba 2024 conference happening March 5-7 at the CTICC, Cape Town, South Africa.

The Africa Energy Indaba 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