Seeds of Opportunity: The African Growth Series
February 2023 | Issue 1
In this week's issue, you will learn more about:
- Smart Meters to Help Reduce African Energy Demand
- Startups: West Africa
- Nigeria’s Renewable Energy Roadmap
- The Growth of eMoney in Ghana
- Nigeria’s Newest $1.5-billion Deep Seaport
- Genomic Research: Addressing Africa's Disease Burden
- Upcoming Webinar: Dispelling Myths about Enterprise Resource Planning Systems
- Upcoming Event: Africa's Green Economy Summit 2023
- Upcoming Event: Africa Energy Indaba 2023
Smart Meters to Help Reduce African Energy Demand
Africa is a unique continent. While Africa boasts countless energy-generating natural resources, energy crises are common. There are more than 600 million Africans without access to electricity, and the supply of electricity for those who do is severely limited. This is due to a significant deficit in the electricity supply. This deficit led to Africa having, on average, the highest electricity prices of all continents. Africans pay USD 0.13/kilowatt-hour (kWh) while the rest of the world enjoys a typical rate of USD 0,04/kWh to USD 0,08/kWh.
Despite projects being undertaken to increase the availability of electricity, such as the multiple solar and wind projects currently in the pipeline, there is a need to manage electricity demand. Africa’s electricity demand is currently 700 terawatt-hours (TWh) and is projected to increase to 2300 TWh by 2040. Methods such as rolling blackouts (load shedding) have been used to temper this increase in demand.
One technology that seems to be overlooked in this discussion is the adoption of smart electricity meters. These devices automatically send electricity usage readings to users or suppliers, providing a clear link between consumption and cost. Research has shown that adopting these devices reduces electricity usage by up to 26%.
Smart meters may also be connected to an In-Home Display (IHD) which will display how much energy is being used at any given time, how much it is costing the user, and how much carbon dioxide is being produced. A user can detect any sudden spikes that may indicate a malfunctioning appliance.
Conlog is Africa’s leading developer and manufacturer of smart metering solutions. The residential segment currently dominates this market. Southern Africa's smart meter market is expected to grow at a compound annual growth rate (CAGR) of 11.5% from 2022 to 2027, with the commercial segment expected to expand at the fastest rate.
The next evolution of smart meters will occur as we progress toward the fourth industrial revolution. This will be with integrated cloud connectivity and supporting advanced methods of consumer interaction, augmented by analytics and artificial intelligence.
Startups: West Africa
In 2022, West Africa was the hot spot for investment in Africa, with 37% of funding and high-value deals flowing into the region. Despite a slight dip in funding from 2021, West Africa remained at the forefront of the continent’s investment landscape, with Nigeria leading the charge. The country was a magnet for investment, attracting 286 deals worth over US$100k and raking in US$1.2 billion in funding. Two mega deals, Flutterwave’s US$250 million and Interswitch’s US$110 million, further solidified Nigeria’s position as a top investment destination. Meanwhile, Ghana was also making waves by raising eight times more funding than in 2021. The country secured 47 deals worth over $100k, whilst the impressive performance of Wave held 82% of the amount raised in 2022 and powered Senegal’s 19 deals. Côte d’Ivoire saw a three-fold increase in funding, with 12 deals worth over US$100k each. Togo’s US$10 million in funding was driven by Gozem’s US$10 million deal with the IFC. While some countries in the region saw investment activity, seven countries recorded no deals worth over US$100k in 2022. Despite that, West Africa is the leading destination for funding and high-value deals.
Nigeria’s Renewable Energy Roadmap
Nigeria, Africa’s largest economy, is at a critical juncture where rapid population growth is likely to introduce a range of social-economic challenges, and rapid economic growth in the next decade could lead to significant increases in energy usage. Considering this, the Nigerian government and the International Renewable Energy Agency (IRENA) have developed a renewable energy roadmap to determine which renewable energy technologies are vital to achieving a sustainable energy mix that will meet the country’s growing energy needs. Nigeria is endowed with abundant energy resources and has a unique opportunity to develop a sustainable energy system based on renewable energies. Renewable energies such as solar, wind, biomass, and hydro fuels could meet 60% of the country’s energy requirements by 2050, saving 40% in natural gas and 65% in oil needs. However, amended policies that accelerate the deployments of renewable energies and the scaling up of investments in the short term will be vital in advancing and ensuring an integrated energy transition. Scaling up investments in the short term will further aid in avoiding long-term fossil fuel infrastructure investments. Furthermore, renewable energy sources will be more cost-effective than conventional fossil fuel investments, amounting to USD 1,22 trillion compared to USD 1,24 trillion.
Although renewable energy can help Nigeria meet its projected energy demand needs, it can further help in sustainable economic growth by creating jobs while achieving global climate and sustainable development objectives.
The Growth of eMoney in Ghana
Innovation is a crucial driver of financial growth and development in its many forms. In Ghana, innovation presents itself as technological advancements within the financial services sector. According to the Global Innovation Index (GII), Ghana is ranked 5th in sub-Saharan Africa for innovation adoption. This is evidenced in the recent policy shifts in Ghana towards adopting new technologies which will provide financial access to millions who have previously been unbanked. Regulations include The Cash Lite Roadmap and the Digital Financial Services Policy, which pave the way for ePayments. Moreover, in 2022, The World Bank approved a USD 200 million aid injection geared towards increasing Ghana’s mobile internet access – increasing internet penetration to over 6 million people in the lower-income demographic. This is key considering the ever-growing eMoney transactions in Ghana; in June 2022, there were 47,262 transactions compared to 375,888 in June 2021. Mobile money transactions have been a revolutionary tool for increasing equity within banking, with many banks in Ghana offering comprehensive services. Ghana has become one of Africa's fastest-growing eMoney banking markets, with 38.9% of consumers aged 15 and over with a mobile money account. Aside from the banks, fintech firms are making significant developments within the community, such as Dash (a Ghanaian fintech startup), which raised USD 32.8 million in seed funding in 2022. Dash collaborates between mobile money and traditional banks, facilitating transactions for consumers and businesses – reinforcing the growth opportunity in Ghana.
Nigeria’s Newest $1.5-billion Deep Seaport
Nigeria's newest deep seaport, Lekki Deep Seaport, significantly boosts the local logistics sector and the overall economy. The Chinese-funded, USD1.5-billion worth of Port, located in Lekki, Lagos, is estimated by local authorities to yield economic benefits worth USD360 billion. Although the country has six ports, about 80% of the country's containerised imports and exports have been concentrated in Lagos (Apapa), followed by the Rivers State ports. This has accentuated container traffic, a trend observable across the country over the past decade (2011-2021), with spikes seen in 2015, 2018, and 2021. Overall the new port infrastructure can handle at least 2.5 million standard 20ft containers per year, while it also houses dry bulk and liquid bulk terminals. Aside from rebuilding the country's ailing infrastructure, the investment will also provide relief for employment, with an estimated 200,000 jobs. Key stakeholders that have paved the way for this possible game-changing investment are China Harbour Engineering Co. Ltd and Singapore’s Tolaram Group, which collectively hold 75% ownership, and the Nigerian government.
Genomic Research: Addressing Africa's Disease Burden
Noncommunicable (noninfectious) diseases are responsible for approximately 41 million deaths yearly – or 71% of all deaths – most of which are preventable. In sub-Saharan Africa, the burden of noncommunicable diseases has increased over the last two decades and is expected to surpass communicable (infectious), maternal, neonatal, and nutritional diseases by 2030.
Precision medicine is a key part of the solution to identifying, preventing, and treating noncommunicable diseases. But Africa lags behind in genetic research, which is at the core of precision medicine. Only about 3% of research uses genetic data from African populations. This disadvantages Africans, but it also affects those around the globe: Africa is home to the most genetically diverse population in the world, and genomic research of the African diaspora has the potential to unlock genetic variants exclusive to the continent. Using this genetic diversity would enable new approaches to diagnosing, preventing, and treating diseases that affect everyone.
54gene is pioneering the use of the African genome in research. Along with the Noncommunicable Diseases Genetic Heritage Study consortium, 54gene aims to build an extensive dataset of 100,000 Nigerians – the largest ever source of genomic data on the African continent. With over 200 million people and 300 ethnic groups, Nigeria is a sensible starting point. 54gene has received approximately USD 40 billion in funding, through which the health technology platform could scale up its work and realise its goal of addressing the rise in noncommunicable diseases in various African populations.
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Upcoming Webinar: Dispelling Myths about Enterprise Resource Planning Systems
Increasing geopolitical tensions and supply chain shocks push executives to adopt and implement digital solutions such as Enterprise Resource Planning (ERP) technology to minimise disruptions and continue running the business. However, adopting and implementing such systems can have various outcomes, leading to misconceptions (truths and myths) about this business software.
To truly maximise the benefits of any ERP system, it is crucial to have the right expectations, which is why SYSPRO and Frost & Sullivan Africa have developed the ERP Myths & Truths Dispelling Misconceptions About Enterprise Resource Planning Systems.
Join the webinar on Wednesday 22 February at 10h00 SAST as Frost & Sullivan Africa's CEO Hendrik Malan, and Sisonke Mgwebi address and discuss the myths surrounding ERP systems and uncover the truth about this software.
Register for free today: https://lnkd.in/d3XEupRX
Upcoming Event: Africa's Green Economy Summit 2023
Frost & Sullivan Africa is excited to announce that its CEO Hendrik Malan will be speaking on "Infrastructure Opportunities in Africa" at the first Africa's Green Economy Summit taking place in Cape Town from 22 – 24 February 2023.
The summit will focus on connecting global capital and green economy projects across the continent and is an official event of E-FEST Cape Town. Join industry stakeholders for this important and pioneering event that will shape the future of our province and the African continent.
Book your ticket today: http://bit.ly/3tYCnMJ
Upcoming Event: Africa Energy Indaba 2023
Frost & Sullivan Africa's Energy Expert, Patrick Prestele will participate in a panel discussion on “Hydrogen for Africa” on 8 March at the CTICC in Cape Town.
Join the Africa Energy Indaba from 7 – 8 March 2023 as it hosts a stellar line-up of speakers discussing and shaping solutions to Africa’s energy challenges.
Get your ticket today: https://lnkd.in/dRtVe_Mk
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
