Seeds of Opportunity: The African Growth Series
May 2022 | Issue 3
In this week's issue, you will learn more about:
- Green Hydrogen Projects in Africa
- 6 African start-ups listed among the World Economic Forum's Technology Pioneers of 2022
- Palladium Powerhouse
- The Impact of the war in Ukraine on the South African Petroleum Sector
- Increase in Health Technology in Africa
- Green energy financing activity in Africa
Green Hydrogen Projects in Africa
With the world becoming increasingly more conscious of its emissions, the globe is transitioning to lower carbon energy sources such as renewables and green hydrogen. More advanced markets in Africa are taking steps to evolve their economies away from polluting sources towards transition bridge fuels such as LNG and longer-term low-carbon sources. Green hydrogen consumption is expected to grow substantially in the coming decades as the fuel source will be integrated more into economic sectors, with the transportation, industry and power sector set to become the main demand sectors of green hydrogen. Africa has the potential to become a major producer of green hydrogen and to play a major role in the low emission energy supply diversification strategy of Europe and other developed nations. Africa boasts massive green hydrogen potential (10TW Solar, 110 GW Wind, 350 GW Hydro and 15 GW Geothermal), presenting a great opportunity for the continent to establish itself as a source location of green hydrogen and to emerge as a low-cost supplier of hydrogen. Several countries including Egypt, Morocco, Namibia, Niger, Mauritania and South Africa are at various stages of large-scale hydrogen project development, with more projects expected. A hydrogen boom, anchored in Africa would lead to rapid economic development as several other aspects of the economy will experience accelerated growth, given that the continent plays its cards right.
6 African start-ups listed among the World Economic Forum's Technology Pioneers of 2022
The World Economic Forum (WEF) assembles a “Technology Pioneers List’ which is an assemblage of leading early to growth-stage companies that are pioneering new technologies and innovations that are poised to have a significant impact on businesses and society. These start-ups typically are at the forefront of their respective industries, leading change by solving global issues such as food security, climate change and cybersecurity. This year’s cohort which consisted of 100 start-ups from around the world included 6 African tech start-ups in healthcare, retail and many more. These startups, namely Okra, Access Afya, Sendy, Pula Advisors, Ejara and Ampersand are spread throughout Africa, with 3 coming from Kenya and the remainder from Nigeria, Cameroon and Rwanda.
Africa continues to maintain a presence in the global technology market, as last year 8 start-ups were listed on the WEF Technology Pioneer List.
Palladium Powerhouse
Forecasts show the global mining market could double from USD 1.6 trillion in 2020 to over USD 3.4 trillion by 2026. The ongoing conflict between Russia and Ukraine could drive this growth due to fluctuating commodity prices. The sanctions on Russia and their invasion of Ukraine contribute to the surge in prices for metals such as iron, copper and platinum because both countries are key global producers of these metals. An example of the impact is decreased mineral exports from Russia causing palladium's trading price to be USD 3.2 thousand on March 7th, 2022, which is double its price in December 2021. Russia produced 37% of global palladium for 2021 but came second to South Africa which produced 40%. As the conflict continues, South Africa has an opportunity to push the development of their new palladium projects, such as Platreef and Waterberg, to supplement the drop in supply from Russia and help meet the global demand for the metal. Demand for palladium is high as it is critical for catalytic converters, a key component of internal combustion engines used in most motor vehicles produced worldwide.
The Impact of the war in Ukraine on the South African Petroleum Sector
The Oil & Gas shortages due to sanctions imposed on Russia, will continue to inflate energy and commodity prices, further fuelling inflation around the world. However, ''the war presents an opportunity for Africa to exploit its very significant energy resources,'' says Hendrik Malan (Frost & Sullivan's Africa CEO).
An insightful panel discussion on 'The Impact of the war in Ukraine on the South African Petroleum Sector' held at the Nation in Conversation Sponsor Session (#Engen) on Tuesday 17 May 2022.
Learn more: https://youtu.be/24bA_0p7aEA
Increase in Health Technology in Africa
While the Covid-19 pandemic has shed light on the pitfalls within the African healthcare industry, as highlighted most clearly by the disruptions caused to supply chains and vaccine accessibility, innovations within health technology seek to combat pre-existing barriers to medical care in the continent. In 2021 alone, 55 health-tech startups received funding for their work in telemedicine, drones and information management which serve to improve access to basic medical equipment and health outcomes in Africa. One popular example of this is Vezeeta, an Egyptian e-health startup and the leading digital healthcare booking forum in MENA, which functions to provide automated bookings through solution orientated, innovative technology. Such startups hold a relatively high growth capacity in this market due to the rapid increase in the mobile and internet sector in Africa (as of 2020 Nigeria boasts 154.3 million users, with Egypt and Kenya reflecting 54.7 and 46.7 million users respectively). The use of health-tech is beneficial to the extent that 68% of clinicians agree that by 2032 e-health will have widespread application within the market and have a positive effect on health outcomes in the continent, further indicating major growth opportunity in this space.
Green energy financing activity in Africa
Through increases in the project financing of innovative green energy providers like Bboxx, steps forward are being taken to allow more underserved areas in Africa to have access to energy. In a recent announcement, Bbox, an energy utility start-up that designs, manufactures, distributes, and finances decentralised energy solutions, has secured $15 million in funds from InfraCo Africa to its drive expansion in Africa. Through previous funding and partnership engagements with the private and public sectors the company has to date replaced more than 1.9 million kerosene lamps and generated more than $126 million in additional income through its projects. Over 2.5 million people have benefited from the projects in countries like Rwanda, Kenya, Togo, Nigeria, and the Democratic Republic of Congo. The recent transaction will now allow Bboxx to drive the expansion of activity in the solar home system (SHS) space in Africa. With more than 570 million people in Africa struggling with access to energy and around 840 million more reliable energy, partnerships such as these are important for closing this energy gap. Moreover, these are key for helping the continent to achieve goal 7 of the UN's SDG by 2030.
To find out more about opportunities in Africa, please contact Lynne Martin.
