Seeds of Opportunity: The African Growth Series

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

Electric Vehicle Sales in South Africa

Battery Electric Vehicles (BEVs) are gaining increasing traction globally as well as in South Africa. Since the first introduction of the Nissan Leaf in 2013, OEMs have increased their number of EV models in the showrooms, and more are yet to come. BMW has been the top seller of EVs in South Africa, with the i3 topping the sales followed by the BMW i8 and the Nissan Leaf and BMW aims to remain in charge. The German OEM, as well as Audi and Mini Cooper have introduced new models in 2021, with Mercedes and Volkswagen releasing new models in 2022 followed by Toyota, Porsche and Maserati in 2023 with more OEMs committing new models at a later stage. The new models arrived with a bang, the more affordable Mini Cooper SE has sold 68 in 2021, followed by the premium BMW iX. Sales of EVs in 2021, however, only made up 0.19% of the total vehicle sales in South Africa as the general populations remains reluctant. Besides steep prices for new EVs, the Mini Cooper SE is the cheapest, starting at R658,000, South Africans are worried about the limited travel range, uncertainty of power supply and limited model choice. Mass adoption of EVs could take another 10 years due to the high import tax imposed on the cars. But maintenance and fuel costs are generally considered cheaper for EVs than for ICE vehicles, which should give EVs a lower depreciation because of the used market looking for vehicles that are less costly to maintain. The policymakers in South Africa need to learn from experiences made by the European market and leapfrog these challenges from the get-go, enabling the reduction of the costs for EVs.

Nigeria's plan to commission a fertiliser plant

The global fertiliser market has been experiencing increased pressures as supply shortages and record surges in fertiliser prices have sparked fears of global starvation and increased food insecurity. Nigeria, a country that relies heavily on imported fertiliser to meet 80% of its national demand; has felt the brunt of these disruptions and this has been further exacerbated by the sustained faceoff between Russia and Ukraine. Considering the significant role fertiliser plays in the local food chain (in 2020 Nigeria imported fertiliser worth US$ 261.69 million), Nigeria has decided to operate some fertiliser plants locally, with the President unveiling the Dangote Fertiliser plant in March 2022. The Dangote Fertiliser plant, dubbed one of the largest in the world will have a plant capacity to produce 3 million tonnes of urea and ammonia annually.

More fertiliser plants are being commissioned across as the country as Nigeria continues to decrease their reliance on imports and attain self – sufficiency in terms of fertiliser supply and demand.

Kiana Steyn

Author, Frost & Sullivan Africa

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Internet of Things in Africa

Part 2 of 3

The Internet of Things (IoT) is where physical and virtual objects, "things", are integrated into our everyday lives and communicate over our information network. On an individual level, IoT lets us seamlessly connect remotely using personal and professional devices. On a national level, it can reduce healthcare costs, reduce carbon footprints, increase access to education in rural communities, and improve transportation safety. Africa's tech ecosystem is rapidly growing with the projected number of mobile subscribers being 615mil by 2025. However, the Internet of Things (IoT) needs a lot more development. The infrastructure to charge IoT devices with electricity needs to be improved in most African countries. This is where each country is focusing on developing the potential renewable energy infrastructure to help them increase their energy consumption thresholds. This will provide more electricity to charge more IoT devices, amongst other things. These devices have been used in Africa to date and here are six examples of IoT solving local issues. First is an Egypt startup solution for the remote control of home appliances, then a Kenyan firm's waste management system. The third is a Namibian based electronic dispensing tool for pharmacists, then a Nigerian authoritative body using a product verification tool. Fifth is South Africa's electronic tolling system, and Tanzania's system to prevent oil pilferage.

Solar Energy Potential in Kenya

The energy landscape in Kenya has been a growing ground for renewable energy incorporation through decentralised systems using solar power since 2010. For Africa as a whole the adoption of decentralised systems such as solar lights, SHS, and mini-grids saw a CARG of 62% since 2010. In East Africa, Kenya leads in the installed utility-scale solar projects and energy efficiency projects at industrial, commercial, and residential scales. With United Aryan, a Kenyan-based clothing manufacturer recently announcing plans to install the largest solar rooftop plant in East Africa, the upward trajectory will only continue. The 1.8 MW new rooftop plant being developed in partnership with Solarise Africa comprises 3,334 solar panels and will generate 2,3 GWh power per year leading to significant cost savings.

Although solar currently makes up less than 1% of the energy generation mix in Kenya, significant progress was made in driving further adoption in the past decade, being supported by decreasing solar PV costs and new innovations financing models. Between 2013 and 2018 the number of people with small (<50 watts) SHS grew by nearly 90%, with about 1,800 users in 2018. As the need to increase electrification rates, particularly in rural areas remains and the need to transition to cleaner energy sources to reduce carbon emissions by industrial users, we can expect to see more developments in this region.

Download BCX's first Digital Innovation Report conducted by Frost & Sullivan

This report is a part of BCX's evolving innovation journey to achieving its purpose of Reinventing the customer experience and its vision of innovating solutions for how we live, learn and work. 

Download the report: https://lnkd.in/eNekXCZq

Media Interviews - Mandisa Ntloko-Peterson (Chief Marketing Officer: BCX) and Hendrik Malan (CEO: Frost & Sullivan Africa) discuss the state of innovation in South Africa; as well as share insights from BCX's first Digital Innovation Report:

To find out more about opportunities in Africa, please contact Lynne Martin.

Lynne Martin

Sales Contact, Frost & Sullivan Africa

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lynne.martin@frost.com+27 21 680 3260