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Growing Africa’s Tech Startup Sector

24 January 2023 Comments (0) Business, Featured Like

Africa is home to a rapidly-growing tech startup scene. From 2015 to 2020, the number of African startups receiving financial backing stood at over 6 times the global average. Thanks to hosting the world’s largest free trading area and a young, growing population that makes use of new technology like e-banking and mobile phones to leapfrog traditional development pathways, the tech startup sector grew by about 46% a year. For the continent to truly become a launch pad for innovation and for the tech sector to maintain its stunning growth trajectory, it will need some help.

An increasingly attractive continent for investors

For any startup, obtaining early-stage funding is crucial, and entrepreneurs often seek external investment to raise this. Historically, venture capital on the continent has been limited, however this is changing. In 2014, only 70 venture capital deals were recorded in Africa, while by 2020 this had risen to over 300, with around a third of investors from the United States. This growth in investments has led to the rise of new unicorns – privately-held companies valued at over $1 billion – with four companies holding the status in 2021.

In addition, the continent is an easy place to start a company, with one of the highest entrepreneurial rates globally. This is not unusual – developing economies often have high numbers of startups driven by a lack of employment – but the increasing prevalence and the sinking cost of mobile phone technology has meant Africa is increasingly digitized. This has motivated entrepreneurs, especially in the technology sector, to innovate to match the continent’s needs. From this, a wave of investment followed: In 2015 only $190 million was invested into startups in Africa, but by 2021 it had gone up to $2 billion. South Africa, Nigeria, and Kenya were the most favorable African countries for startups in the last year, hosting high numbers of companies, good co-working spaces, and a generally robust economic system.

A growing sector, but one that is still far behind

It is easy to conclude that the continent is already a hotbed for tech startups, especially as economic forecasts predict a record year for tech in Africa in 2022, with the possibility of total investments into startups reaching more than $7 billion. But while there is more money flowing into more companies than ever before, Africa’s record of scaling up these companies or even sustaining them, is poor.

There are only 4 unicorns on the entire continent, compared to over 50 in the EU, over 100 in China, and over 200 in the United States. Even for lower-value companies, such as African ‘Zebras’ valued at $200 million, numbers are slim. There are only 20 zebras across Africa, as most startups only make it to the series B funding stage. In fact, the returns on venture capital investments in Africa are less than 3% over 5 years on average, compared to 11% in Asia-Pacific and 16% in Europe.

A challenging place to grow a startup

Startups struggle in Africa for several key reasons:

Despite the free-trade area, the market is very fragmented
Consumer purchasing power is low
Data communication infrastructure is inadequate for the number of people it serves
Digital talent is scarce
Regulations across the 54 countries are varied, inconsistent, and often-times complex

On top of this, key sectors, especially business-to-consumer ones such as financial services and energy are often controlled by state monopolies that use their market power to prevent new companies from challenging the status quo, rather than advancing the national interest or providing a level playing field.

This leads to an inhospitable startup environment that in turn stops job creation and economic development, and threatens the entire startup sector by preventing innovative products from reaching the market.

The outlook for the future

Africa has all the pieces needed to become one of the most innovative regions in the world: high entrepreneurship, a large free-trade area, and a young and growing population that adopt new technology quickly. To see continued growth in the sector, African governments need to build and deploy a digital economic policy that encourages investment, improves the business environment through clearer regulation, and creates support networks for startups, as well as expand the continent’s digital infrastructure. Not only does this lead to short-term startup growth, but it stops the biggest companies from growing dependent on the world’s leading technology players, making the continent more self-sufficient in the longer term.

Sources : cioafrica.co and visualcapitalist.com

Winners of the African Youth Adaptation Solutions Challenge

12 December 2022 Comments (0) Featured, Leaders Like

The YouthADAPT competition, an annual competition and awards program for youth-led enterprises jointly organized by the Global Center on Adaptation, the African Development Bank, and Climate Investment Funds (CIF) has announced the 2022 winners list.

The YouthADAPT Competition expands in its second year

The goal of the YouthADAPT competition is to boost sustainable job creation through entrepreneurship and innovation in climate change adaptation and resilience across Africa. The competition invites young African entrepreneurs between the ages of 18 and 35 from micro, small, and medium-sized enterprises to submit ideas that can deliver innovative solutions to adapt to and build resilience against climate change. The twenty winning entries, half of which are women-led, won grant funding of up to $100,000 each, as well as a 12-month accelerator program to help them grow their businesses, deepen their impact, and create jobs on the continent.

Launched in 2021, this year’s competition received over 3,000 applicants. Despite its short history it is already delivering results. One of last year’s winners, Juveline Ngum Ngwa from Bamenda in Cameroon has been able to scale up her business, Bleglee Waste Management, as a result of the grant. This has meant a second waste sorting center and the development of software for drones which identify garbage blocking drainage systems.

Competition winners from all across Africa

Winners of the 2022 African Youth Adaptation Solutions Challenge come from across the continent:

Namibia

Kaveto Tjatjara, of Flushh, produces waterless toilets for schools in underserved communities.

Malawi

Joyce Sikwese, of Green Impact Technologies, accelerates the productive use of climate-smart agriculture technologies and organic fertilizers among smallholder farmers.
Ulaya Mwale Mpatsa, of Engineering Company Limited, offers a solution for the recovery and treatment of rainwater, desalination of seawater, and groundwater extraction.

Kenya

Maryanne Gichanga, of AgriTech Analytics, uses satellite data analytics and Internet of Things (IoT) sensors to halt and reverse soil degradation, crop pests, and diseases.
Esther Kimani, of Farmer Lifeline Technologies, reduces greenhouse gas emissions from synthetic fertilizers and farm chemicals and creates more environmentally friendly versions.
Robin Ndungu Kisumeo, from Organics Limited, empowers smallholder farmers to create sustainable and climate-resilient aquatic food systems by leveraging artificial intelligence.

Egypt

Reham Yehia, of Baramoda, reduces CO2 emissions by decreasing the use of chemical fertilizers in agriculture, helping soil that has been affected by climate change to recover.
Moataz Yousry Voltx, from Engineering & Industries, produces a smart irrigation system that saves up to 40% of the water used to irrigate agricultural crops.

Cameroon

Pelkins Ajanoh, from Cassavita, provides improved cassava seedlings that are resistant to climate change effects.
Anna Ngwenyi Mafor, of Multi-Tech Sustainable Solutions (MTTS), uses smart technology for the early detection of crop diseases caused by climate change.

Nigeria

Rita Idehai, at Ecobarter, improves adaptive capacity to flash flooding by keeping drainage and streets free of waste.
Rebecca Andeshi, from Grocircular Agro Services, produces organic fertilizer generated from poultry waste, food waste, rice husks, and wood chips.
Olowoseunre Oluwadamilola, of Pazelgreen Technologies, provides sustainable and cost-effective industrial cooling processes to address the problem of post-harvest loss of fruits and vegetables caused by climate change.

Rwanda

Yvette Ishimwe, of IRIBA Water Group Ltd, offers an adaptation solution for floods by collecting rainwater from the roofs of houses, purifying it, and then distributing it to young women.

Botswana

Mmakwena Moesi, from Viva Organica, improves soil moisture and health of plants affected by climate change.

Ghana

Rose Noah, of West African Feeds, leverages tropical insect farming techniques to convert food waste into climate-resistant food alternatives for Africa’s livestock feed industry.

Senegal

Moussa Diouf, from Agroexpert farming, tackles the effects of drought on agriculture, especially at small scale through the use of drip-drop irrigation.

Algeria

Nassim Ilmane Eurl Algerienne, of Des Industries Technologiques, created a mobile app that helps small and mid-sized farmers receive recommendations and disease alerts to optimize fertilizers and pesticide usage while improving their yield.

Côte d’Ivoire

Noël N’guessan, from Lono, improved fertilizers to address climate change effects on soils, especially those suffering from severe degradation.

Uganda

Frank Mugisha, Akatale On Cloud, created an original technology using flies to decompose organic waste into livestock feed, addressing the fodder deficit that can be caused by climate change.

The list has doubled since 2021, where only ten winners were selected, with awards totaling $1 million. For 2022, this was increased to twenty winners with the awards pool doubling to $2 million. Next year, it is hoped that the total of the awards will reach $4 million.

The awards ceremony was held at the African Pavilion of the COP27 Climate Change Conference. African Development Bank Group president Dr. Akinwumi Adesina said, “Africa’s needs cannot be ignored…Our young people must be part of the solution. They are creative, dynamic, and engaging. They are futuristic and must be part of the solution for climate adaptation in Africa.”

Photos : un.org – LinkedIn

Germany looks to Africa as energy crisis looms in Europe

20 November 2022 Comments (0) Featured, Politics 1

With a sixth round of EU sanctions against Russian oil, Europe is looking to leave Russian gas behind for good. Germany is already looking at alternatives in Africa but ramping up production will not be a small task, with infrastructure challenges and increasing preference towards renewable energy over fossil fuels.

Europe looks to Africa as an alternative to Russia

With Russia ostracized in the wake of its invasion of Ukraine, and a sixth round of EU sanctions targeting Russian oil recently implemented, many countries in Europe are looking to leave Russian gas, oil, and coal behind for good. But cutting the use of Russian gas by 60% before the end of 2022 may come with a nasty side-effect – a lack of energy – especially over the winter where demand in Europe increases. Germany is already looking for alternatives in Africa, with the continent’s oil and gas reserves being an important topic at the June 2022 German-Africa Energy Forum in Hamburg. In 2020, African oil made up nearly 9% of global exports, with over 327 million metric tonnes produced on the continent. But ramping up production and getting it to Europe will not be an easy task, with infrastructure challenges and the zeitgeist in Europe moving towards renewable energy over fossil fuels.

Lack of investment at home raises questions for export

The first major barrier for gas exports to Germany is the lack of infrastructure. Energy development projects are capital-intensive and generally require private-public partnerships. Sultan Wali, Ethiopia’s energy minister said that “African governments cannot carry out these projects alone.” Ndiarka Mbodji, the French-Senegalese founder of Berlin-based Kowry Energy echoed this, saying, “They need financial support from Germany and other rich western countries. Africa holds the key to resolving Europe’s energy crisis. And if we look at Africa’s resources, for example gas, you cannot underestimate its importance.”

Despite such a positive outlook for Africa to fulfill Germany’s gas demands, half of the continent’s population lacks access to clean energy, with many households dependent on burning biomass for energy. Moreover, some 900 million Africans lack access to clean cooking solutions, and on top of this, South Africa is in the midst of its own energy crisis. Load shedding is now a daily occurrence, and the situation is predicted to worsen despite the country holding significant natural gas potential. There will no doubt be those who question whether the continent can afford to export gas when it could be put to good use domestically.

Africa must act quickly to profit

Many German companies are keen to help finance African initiatives that produce hydrogen and natural gas for export to Europe, and African nations are keen to power up using gas. Because natural gas, which is mainly produced in Algeria, Nigeria, and Egypt, creates fewer carbon emissions than other fossil fuels like oil and coal it is seen as a ‘transitional fuel.’ Mbodji says that gas should not be overlooked, stating, “you can see at the moment, with the Ukraine war that we are going through, that there is a need to diversify the source of energy. And if we look at the resource that Africa has in terms of, for example, gas, which is a source of transition, we can see its importance in Africa.”

The International Energy Agency (IEA) produced its Africa Energy Outlook for 2022, published on 20th June, where it said that Africa could be in a position to export some 30 billion cubic meters (bcm) to Europe by the end of the decade. If all of Africa’s natural gas discoveries are turned into production, Executive Director Fatih Birol has stated that it could make an additional 90 bcm per year by 2030, with around two-thirds of this going towards domestic needs and the rest for export.

But the IEA has said that Africa must act quickly if it is to profit from these vast reserves of natural gas. Europe will only want Africa’s gas until it can shift towards lower carbon technology, something that is being increasingly championed with ever more lofty net-zero promises being made by politicians.

Renewable energy also ramps up exports

There is another energy source that could be exported – solar. Taking advantage of the huge potential for solar energy near the Sahara Desert, a massive undersea power cable is coming to Europe from Egypt. The GREGY intersection, going from Northern Egypt and into Attica, Greece, brings 3,000 megawatts of clean solar power to Europe. At the same time, the Xlinks Morocco-UK power project will connect Alverdiscott, Devon, with a solar site in Morocco, providing enough power to supply seven million homes by 2030.

There isn’t enough African gas available right now to save Germany from an energy shortage this winter, and with Europe pushing for cleaner energy, by the time production has increased to a suitable level it may already be too late to capitalize on Africa’s reserves.

Photos : dw.com – logupdateafrica.com – foreignpolicy.com

With a Digital Tech 100 Award, Kobo360 cements itself as the best e-logistics company in Africa

24 October 2022 Comments (0) Business, Featured Like

Kobo360, the company that connects truck owners and shipping customers through an Uber-like application, picked up the title of ‘Best e-Logistics Platform,’ bringing it one step closer to becoming the leading provider of e-logistics on the African Continent.

Kobo360’s new award testifies to the company’s progress

On the 29th of July, at the Movenpick Hotel in Kenya, Kobo360, the African E-logistics company that connects truck owners and shipping customers through an Uber-like application, picked up the title of ‘Best e-Logistics Platform.’ With this prestigious award from the Digital Tech 100 Awards, renowned for recognizing the top tech companies in Kenya and attended by key individuals and stakeholders in the logistics sector, Kobo360 is one step closer to achieving its goal of becoming the leading provider of e-logistics on the African Continent.

Despite low quality infrastructure throwing challenges at the company that are unique to the intra-African trade ecosystem; dilapidated railroads, poorly maintained road systems, high duty taxes, and excessive and often corrupt bureaucracies, Kobo360 already serves over 700 businesses on the continent. It has also acquired investment from high profile international groups including Goldman Sachs, who put $20 million of Series A funding into the company back in 2019.

Obi Ozor knows the challenges personally

Obi Ozor, co-founder of the e-logistics platform, began working in African logistics while a college student in the United States. While studying in Michigan, he made extra money by exporting goods to his home country of Nigeria. After working for JPMorgan in the states, he returned to his home country and worked as Uber Nigeria’s operations chief.

He has spoken about how he would send diapers and soap to Africa during his university years, and how ‘a 1,000 kilometer journey was taking 8 days, but it cost more than moving a container from the US to Nigeria.” Because of this experience, he knew that there was a need for a data-driven service that could help move goods efficiently and securely across the continent.

Connecting suppliers with truckers with customers

Given Ozor’s experience, it is perhaps no surprise that Kobo360’s model bears similarities to Uber, connecting suppliers and cargo owners with truck drivers through an online or mobile-based application. Through Kobo360, customers can schedule, book, track, and pay for goods to be moved.

Despite the basic idea being similar, Ozor has had to apply it to an entirely different market, one that comes with its own unique challenges. Kobo360 started operations in Nigeria in 2018, and it has since expanded to Ghana, Uganda, Kenya, Côte d’Ivoire, Burkina Faso and Benin Republic.

Helping truckers as well as customers

Ozor knows that the quality of trucks and experience of the drivers is key to solving many of Africa’s logistics challenges. With so many trucks bought second-hand in Africa, and infrastructure problems abounding, the company set out to make sure that their drivers, who are independent contractors, are not alone. To help, the company offers loans to purchase new vehicles, as well as support for those who are targeted with extortion attempts, both by police and by bandits, by dispatching rapid-response repair teams and coordinating with authorities in the event of a hijacking.

Kobo360 also guarantees truckers access to discounted diesel, tires, spare parts, and working capital. This approach clearly works, as the company now has over 50,000 registered truck owners on the platform.

Ready for the next free trade area

With Africa beginning its implementation of the African Continental Free Trade Area (AfCFTA) agreement in 2021, creating the world’s largest free trade zone across 54 countries with a collective GDP of close to $3 trillion, competition is sure to start. Free movement of goods and services will make it easier than ever to move goods between locations, a fact that many will be keen to exploit. Nonetheless, Kobo360 is well positioned to be at the forefront of a logistics revolution on the continent and the company is set to take advantage of this.

Photos :

UNDP’s innovative small-scale solar funding competition closes for applicants

15 September 2022 Comments (0) Featured, Politics Like

As part of the UN’s Sustainable Development Goals, the Climate Aggregation Platform is running a competition for off-grid solar financing in Africa. The results will provide a range of development benefits, especially for remote communities.

New financing models to tackle the lack of electricity for Africa

As part of the UN’s Sustainable Development Goal of universal access to clean, affordable, reliable energy for all by 2030, the United Nations Development Program (UNDP), through the Climate Aggregation Platform (CAP) is running a competition for off-grid solar financing in Africa. Applications have now closed for the first edition of the CAP Financial Innovation Challenge, which will cover East Africa. Aggregate funding projects like this are aimed at countering investment barriers and unlocking new financing for small-scale renewable energy projects, and the increased access to electricity will provide a range of development benefits, from giving farmers access to solar-powered irrigation to health facilities in villages no longer relying solely on diesel generators, to better-lit streets and roads for remote communities.

Aggregate funding reduces risk and encourages investment

Financing solar initiatives in Africa is not without risk or problems, and new sources of funding and new financing mechanisms are required if the necessary investment to meet the Sustainable Development Goal by 2030 is to be reached. In this case, the CAP is using financial aggregation, a process in which multiple energy assets, projects, and companies are compiled into investment portfolios. Investors choose to put money into these portfolios, rather than into specific initiatives.

This aggregation of projects reduces the risk to investors, as well as the transaction costs of investing in multiple projects, and can help counter investment barriers that would prevent these projects from being financed. A recent report from the UNDP and Climate Bonds has shown that financial aggregation has untapped potential in bringing financing to small-scale clean energy projects. Eduardo Appleyard, CAP project coordinator says, “while the market is still nascent, financial aggregation could one day be a game-changer for distributed renewable energy companies…through this process we want to spark a conversation about financial aggregation grounded in real-life examples to help demonstrate its potential and better understand market barriers and opportunities.”

The CAP Financial Innovation Challenge is open to solutions that involve financial aggregation at different levels, such as bundling individual assets, projects, or companies together, and also to other innovative aggregate models, such as carbon credit solutions, renewable energy certificates, innovative models for receivables financing, and digital aggregation platforms.

First initiative to choose five projects across East Africa

The CAP Financial Innovation Challenge will aid in the transfer of hands-on knowledge of solar energy applications that will help overcome energy-related challenges in East African countries. According to the UNDP, off-grid solar and mini-grids are the key to providing reliable electricity to under-served communities without access to electricity and to those that are in regions where the national grid is not reliable.

Off-grid solutions are standalone solar power collection systems operating independently of the main power grid. They are typically sufficient for phone charging and lighting but do not normally provide enough power for larger electricity loads such as powering machinery or agricultural equipment. Mini-grids are larger systems that provide an independent network for communities where the population is too small or remote to make a national grid extension feasible.

The first initiative is exclusively for projects in East Africa, and funding from the Global Environment Facility (GEF) will be given for up to five projects, with at least one project in Rwanda and Uganda each. Each winning company or organization will then receive $40,000 to develop their innovations.

Buy and sell-side actors welcome to enter

The competition was open to both buy-side actors such as banks, impact investors and financial intermediaries, as well as sell-side entities like project originators, developers, and energy companies. The competition was not open to individuals, but was open to almost any groups including governmental agencies, development banks, private sector entities, NGOs, academia, associations, and joint venture applications, in order to encourage maximum participation.

Both first-of-a-kind solutions that have not yet been attempted anywhere before and proven approaches adapted to a new market sector, geography, or context will be considered. Entries were originally to be stopped on the 31st of August 2022, however the deadline was extended to the 9th September.

No dates have yet been given for when the winners will be announced, but should the competition prove successful it is likely that further competitions to win aggregate funding opportunities will open up both on the African Continent and elsewhere in the world.

Photos : undp.org

Mohammed Dewji, Africa’s youngest billionaire, takes on multinational brands

27 August 2022 Comments (0) Featured, Leaders Like

Mohammed Dewji, the youngest member of Forbe’s Africa’s 50 Richest list, has studied abroad, served in Parliament, and invested in everything from real estate to agriculture to distribution. But he wants to take it further.

Home-grown billionaire with home-grown alternatives

Mohammed Dewji has an impressive list of accomplishments. The CEO of the family trading conglomerate and the youngest member of Forbes’s Africa’s 50 Richest list, he has studied abroad, served in Parliament, and invested in everything from real estate to agriculture to distribution. Dewji’s strategy – buying an underperforming business and investing in new equipment and management to turn the company around – has been incredibly successful, but Dewji wants to take it further. His latest plan is to challenge the might of Coca Cola and Unilever in Eastern Africa, replacing their products on African store shelves with home-grown brands.

A head start from overseas schooling

As his father’s company, Mohammed Enterprises Tanzania Ltd (MeTL), grew and expanded, the family split up to manage the various company hubs. Dewji was able to attend a British school in Arusha, Northern Tanzania, before enrolling at the Arnold Palmer Golf Academy near Tampa, Florida. While he was a promising golfer, he ultimately did not pursue this as a career and instead went to Saddle Brook High School in New Jersey. He would follow this up with a graduate degree in International Business and Finance at Georgetown University in Washington D.C.

Dewji briefly considered a career on Wall Street before returning to Tanzania to take over the family business. While his high level of education definitely helped him in his life, something that Dewji is clearly aware of, he most often credits his father with his success. He has stated that, “My father had been training me since I was 11 years old,” and that “he used to teach me how to do business.”

Turning the family business into a production hub

The MeTL group traces its origins back to the 1800s, when Dewji’s paternal grandmother arrived into Tanzania from Gujarat, India. Dewji’s father, Gulam Dewji, now Chairman, grew the business into a nationally known import-export house, primarily by focusing on importing products for resale in Tanzania. When Dewji rejoined the business after graduating in D.C., he began managing an MeTL commodities trading business. He was promoted to Chief Financial Officer within two years.

Dewji has big plans for the family company. Rather than just importing products for resale, he wants to produce and then export both finished products and material, primarily in oils, grains, and textiles. With that in mind, his goal is to cement MeTL’s position as an African multinational with investment into surrounding countries – the company already has a presence in Kenya, Rwanda, Burundi, The Congo, South Sudan, and many more.

A short stint in Parliament

In 2005, Mohammed Dewji became one of the youngest Parliamentarians in Tanzania’s history at the age of 29. Dewji saw political service as a means of giving back. Rather than looking at business policies, he avoided conflicts of interest by focusing on water, education, and health that directly affected the community where he grew up. He is extremely proud of increasing the availability of potable water across his district from 23 percent to over 80 percent. Nonetheless, managing his business and politics eventually proved too much, and he instead channeled his ideas for the country’s improvement through MeTL.

A continent ripe for investment

Dewji has championed the ability to raise capital as a vital tool in MeTLs success, and plans to invest back heavily over the next five years. At least $1 billion, financed through equity and debt, will be invested in Tanzania and the surrounding countries. Along with trying to topple Coca Cola and Pepsi, investments will be made into sugar manufacturing, edible oils and detergents, as well as in Financial Technology and banking. MeTL has even acquired an island off the Tanzanian coast with which to develop tourism services in advance of an anticipated surge in visitors to the continent.

Photos : okayafrica.com

Africa’s Fastest Growing Companies in 2022

19 July 2022 Comments (0) Business, Featured 1

Between the digitization of informal trade and agriculture, new banking options for those without banks, and co-working opportunities, the African continent is ripe for investment. With the release of the Statista report by the Financial Times on Africa’s fastest growing companies, three stand out – Wasoko, Flocash, and AFEX.

The African continent is a unique and rapidly-evolving economic environment. In recent years new opportunities have arisen to fill the newest niches, from the digitization of informal trade and agriculture, to new banking options for those without access to traditional brick-and-mortar banks, to co-working opportunities; the African continent is undergoing a change. With the release of the Statista report by the Financial Times on Africa’s fastest growing companies, it is possible to get an insight into what businesses are flourishing in the current environment. The list of fastest-growing companies is dominated by technology providers in every industry including agriculture, financial services, logistics, and transport. The top three of these are Wasoko, Flocash, and AFEX.

Wasoko – 346% compound annual growth

The informal retail sector is huge in Africa, with hundreds of billions of dollars of product sold yearly from shops and kiosks. Yet these sellers have little access to capital, and face challenges getting goods either regularly, or on time from suppliers. This is where Wasoko comes in. It has become a full-scale distributor, owning and leasing facilities in the supply chain from warehousing to logistics. It began in Kenya, but quickly expanded into Tanzania, Rwanda, and Uganda, the Ivory Coast, and Senegal.

Wasoko allows retailers to order products from suppliers via SMS or its mobile app for same-day delivery to their stores and shops via a network of logistics drivers. The company also offers a buy now, pay later option for retailers who need working capital to order more goods. The company is trusted by over 50,000 retailers and has over 1,000 employees, with their revenue having gone from 0.3 million in 2017 to 27 million in 2020.

Flocash – banks for the unbanked

In a continent where around 57% of the population do not have a traditional bank account, making electronic payments is difficult. With the growth of e-commerce, and greater prevalence of internet access, it was doubtless that someone would step in to fill the void. Flocash, a provider of payment services across Africa and the Middle East is the fastest-growing. It offers more than 200 payment options, 20,000 cash points, and 30 different currencies.

The company currently covers 60 different countries and has more than 400 million customers, with a compound growth of 275% and revenue going from $0.121 million in 2017 to $6.3 million in 2020.

AFEX – the reference point for commodities

Until 1990, commodity exchanges were generally restricted to industrialized nations but the rise in affordable technology has seen them spread globally. Commodity exchanges began to emerge in Africa in the 1990s but the only successful exchange was the South African Futures Exchange which was birthed from the Johannesburg Stock Exchange.

AFEX Commodities Exchange Limited provides commodity brokerage services. The company has been developing a viable commodities exchange and supply chain infrastructure to support agricultural products since 2014, and it reached $31 million in revenue in 2020.

Many notable companies in the top 10

There are many interesting companies listed among the fastest-growing in Africa. Starsight Energy is ranked number 6, and delivers comprehensive, end-to-end solar solutions. AfricaWorks is a partner with Seedstars and offers workplace solutions, including co-working spaces with a compound growth of 238%. Lori systems has built an e-logistics platform that is revolutionizing the cargo-transport value chain in frontier markets from the ground up, currently number 7 on the list.

Considering that the current two biggest companies in Africa by revenue are oil and gas companies, and the third is a timber company, this could be seen as a sign of the continent becoming more developed, and moving away from traditional resource extraction markets.

Photos : breakingnews.com – ft.com

The historic train line linking the UAE and Israel among new infrastructure projects

21 June 2022 Comments (0) Featured, Transport 2

The historic train line linking the UAE and Israel is among several agreed infrastructure projects following the Abraham Accords in 2020. The two countries seek to forge closer relations, with the line set to allow Israel to access new markets in the UAE, eventually carrying passengers from the Mediterranean to the Gulf.

A historic re-opening to a historic line connecting Dubai and Haifa

At one time in the past it was possible to take the Hejaz Rail Line from Medina in Saudi Arabia to Damascus, and then onward to Haifa. After the establishment of the State of Israel however, this stopped, but based on comments made at Expo 2020 in Dubai from Merav Michaeli, Israel’s Minister of Transportation and Road Safety, the Al-Marj Train, built on the historic Hejaz line, may soon be running again. According to Michaeli, a train out towards Jordan, Saudi Arabia and the Gulf states, from Dubai to Haifa, is one of several big infrastructure projects being discussed between the UAE and Israel to build better relations and increase co-operation.

A sign of improving relations

The joint infrastructure projects are a sign of improving relations between the two countries which have had strained relations in the past. Israel was called ‘The Enemy’ by the first president of the United Arab Emirates, and there was another rocky period following the assassination of Mahmoud Al-Mabhouh in 2010. In recent years though, the relationship has taken a big step forward with the signing of the Abraham Accords in 2020, the first public statement normalizing relations between an Arab country and Israel since that of Jordan in 1994, and the establishment of diplomatic embassies in Abu Dhabi and Tel Aviv. More than 50 agreements have now been signed between the two nations in diverse sectors, including the train line from Haifa to Dubai.

The Al-Marj train line in Israel, connecting the towns of Haifa and Beit She’an re-opened in Israel in 2016, connecting the Jordan River Crossing, Jalamah, and the Jenin area in the West Bank. The idea was that it could be extended towards Saudi Arabia and the gulf. Eventually, it would link Haifa to Dubai. As far as infrastructure projects are concerned, this is a relatively easy one to start with as the tracks needed for the rail connection are nearly all in place. With the exception of 200-300 kilometers of line that remains to be built in Jordan, the line is ready to connect the UAE and Israel.

Benefits for everyone involved

Once all the tracks are in place, goods from Israel can be transported to the UAE within a couple of days, rather than the approximately 12 days it currently takes when shipping along the Suez Canal. It will also allow Israeli producers to access new markets – fresh vegetables in particular are in demand in the UAE.

The project, backed by the United States, will also benefit the economy of Jordan. Jordan is in desperate need of an economic boost, with unemployment on the rise and reaching 25% in 2021, with youth unemployment rates reaching an unprecedented 48.1%. Both the employment created by the building of the infrastructure for the rail line, and revenue from the long-term operation of the line will inject much-needed funding to the country.

Egypt watches with wary eyes

Not everyone in the region is excited about a possible new railway line between Israel and the UAE. In Egypt, where Suez Canal revenue is the third largest source of national income, representing 10% of the GDP and an important source of hard currency, a land passage between Israel and the Gulf states is not welcome news. Nor are reports that the UAE intends to buy Haifa Port in Israel, leading Egyptian economists to talk about the upcoming impact on Egypt’s economy from the two states forging closer relations.

While the agreement is a big step, there are still many challenges before the line becomes operational. Nonetheless, the prospect of rail travel from Abu Dhabi to Israel leads to the question: Will Israeli passengers be able to travel to Abu Dhabi by train, like they could on the famous Hejaz Rail Line back in the time of the Ottoman Turks? According to the ministry, the network will one day be able to transport passengers from the Mediterranean to the east, and between the Gulf states, Saudi Arabia and Iraq to the west. Perhaps in time, after the successful launch of rail transit of containers between Dubai and Israel via Jordan and Saudi Arabia, passengers will be a possibility again.

Photos : whatson.ae

Africa stands to benefit from $1 trillion of investment into solar energy

21 December 2021 Comments (0) Business, Featured Like

A partnership between the International Solar Alliance (ISA) and Bloomberg Philanthropies to mobilize over $1 trillion worth of investment into the solar sector could see the continent – home to 40% of the world’s solar potential – become a global leader in green energy.

International Solar Alliance and Bloomberg Philanthropies working together

A partnership between the International Solar Alliance (ISA) and Bloomberg Philanthropies was announced at the end of October 2021. The goal of this partnership is to mobilize over $1 trillion worth of investment into the solar sector to scale up solar energy production across the 80 member countries. Across the world, solar power capacity stands at about 788GW. $1 trillion in investment would see roughly an additional 1.6 TW of capacity added by 2030. Africa stands to benefit heavily from this investment – most of the ISA member countries are in Africa and much of the continent sits in the world’s ‘sunshine zone’ near the equator, the prime location for solar power generation.

Launched recently, the ISA aims to reduce global dependence on fossil fuels

The International Solar Alliance was launched in 2016, set-up by the current Indian Prime Minister Narendra Modi alongside former French President François Hollande with the goal of realizing a massive deployment of solar energy across the world. This would also help pave the way for future technologies. Since its inception, over 80 countries have signed and ratified the ISA Framework Agreement – a majority of them being African countries – making it the largest grouping of states world-wide after the United Nations.

Bloomberg NEF analytical backing paints Africa as the perfect place to start

The recent BNEF report titled Scaling up Solar in ISA Member Countries Report, paints a positive picture for investment in African solar power.

Global electricity demand is set to double in the next 30 years, however among the 80 nations that make up the ISA’s ‘beneficiary’ classification – low income countries with solar markets of less than 100MW annually – demand is set to triple.

At the same time, cost of photovoltaic modules and lithium-ion batteries have fallen rapidly. In 1976 crystalline silicon photovoltaic modules cost around $77/W when adjusted for inflation, while in 2021 the cost stood at only $0.24/W. The BNEF report predicts that the price will fall further still as manufacturers tweak the technology for higher efficiency and reduced amount of material waste.

Many of the ISA’s beneficiary countries are in Africa where strong sunlight, coupled with a lack of infrastructure to create energy from fossil fuels make these markets perfect for development. Unfortunately the report notes that due to the Covid-19 pandemic, investment in solar projects in 2020 fell below 2019 levels by 44%.

Solar power promises huge benefits for the African continent

Developing solar power on the continent has the potential to lift at least a billion people out of energy poverty. Along with that, strong investment in solar power on the continent would be a significant driver of Africa’s shift towards renewables. Right now, Africa is home to 40% of the world’s solar potential, but is home to only 1% of the world’s solar panels. This means Africa has the potential to become a global leader in creating a low or zero-carbon energy grid if solar power is developed heavily.

Along with lifting the region out of energy poverty and creating a new, green direction for power supply in Africa there would be economic benefits for the continent. If the One Sun, One World, One Grid Declaration (OSOWOG) released at Cop 26 achieves its goal of creating a worldwide grid where clean energy can be transmitted anywhere and anytime then a solar-rich region like Africa can sell the excess power generated across the world.

No small number of challenges still to be met

While the region certainly has potential, there are many challenges to overcome in order to turn the goal of $1 trillion into actual, on-the-ground investment. In a continent as large as Africa with thousands of languages and cultures across over fifty different countries, potential investors must deal with multiple governments, regulatory bodies, legal restrictions, and of course, cultural differences.

As of yet, how the money will be materialized, by who, and in what capacity remains a mystery. For those beneficiary countries that signed the ISA Framework, the only thing to do now is wait patiently for the ISA and Bloomberg NEF to release their upcoming Solar Investment Roadmap for 2022, which will shine a light on what the next steps will be to turn the goal into reality.

Sources: theafricareport.com – financialexpress.com

African Nations Descend on Dubai’s Expo 2020

16 September 2021 Comments (0) Featured, Politics Like

After being postponed for a year due to pandemic, Expo 2020 is finally set to begin in Dubai, with nearly every country on the African continent represented both individually and through a dedicated pavilion for the African Union.

No expenses spared to make Dubai’s Expo 2020 a success

After being postponed for a year due to the Covid-19 pandemic, Expo 2020 is finally set to begin on the 1^st of October 2021, with Dubai hosting the Universal Exhibition. For the first time in the 170 year history of World Expos, nearly every country on the African continent will be represented, both individually and through a dedicated pavilion for the African Union. Architecturally alone the event will be spectacular, with Morocco’s pavilion being a vertical earthen village that offers views of the whole event from it’s rooftop. With an estimated allocated budget of $8.7 billion, it is not a cheap event to host, but if successful it has been expected to generate up to US$17.7 billion in revenue for Dubai. Aside from the potential economic benefit, for the United Arab Emirates hosting the expo is a way to position themselves as a country of influence on the international scene, and further their political and economic presence on the continent of Africa.

A unified Africa presents a new image of the continent

For the continent too the exposition is an opportunity, as a myriad of countries wish to deepen their ties with Africa. With it’s Agenda 2063 – a 50-year plan to see an “integrated, prosperous and peaceful Africa, driven by its own citizens” – the African Union is ready to use the expo to show that the continent represents a dynamic force in the international arena. Aspiring to an Africa with no borders, whose people see themselves as Africans first, united in common heritage, culture and values the African Union pavilion will highlight Africa’s potential and ambitions, showing a new face of the continent that is exciting, young and modern.

The highlights of the continent on display

Within each carefully curated pavilion, over 40 countries on the continent will showcase to the world what they can offer:

Investment Opportunities

Some countries, like the Democratic Republic of the Congo will showcase the resources of the country. To attract investors the Congolese pavilion will highlight the country’s 80 million hectares of arable land, and the energy-production potential of the Congo River. Likewise Zimbabwe’s pavilion will showcase a destination filled with mining, construction and agriculture opportunities. In the Ethiopian pavilion conveyor belts will display locally-made products, while Nigeria’s ‘Opportunity City’ will put the country’s booming creative and technology sectors at the forefront for visitors to see.

Tourism

For many countries the Expo offers a chance to sell the country as a tourism destination. With the recent rehabilitation of Benin’s cultural sites, the country wants to revitalize its tourism industry. In fact, standing out as a tourism destination will be the challenge at Expo 2020. Heavyweights in tourism like Egypt will deploy pyramids, hieroglyphic signs and genuine antique pharaoh statues, while Nigeria will show visitors around it’s untouched destinations on a virtual reality Eco-tour.

Culture

Along with highlighting the economic opportunities, African countries will be reminding the world of the wealth of culture on the continent. Entering the Ethiopian pavilion will see visitors coming face to face with a replica of ‘Lucy,’ the world’s oldest human fossil, while in the Nigerian pavilion the ‘Nollywood’ film scene will be highlighted. Meanwhile in the Kenyan pavilion is the opportunity to meet the 44 different tribes that make up the country, and visitors can leave with a Kenyan name and digital copy of their own Kenyan passport.

Enticing investment into the continent remains a challenge

Before the Covid-19 pandemic hit the world, Africa as a continent had seen 25 years of continuous economic growth. Despite this, the bottom half of the global Human Development Index is dominated by African countries, and the continent’s lack of infrastructure remains a barrier to international trade. This makes international investors wary, further holding the continent back. This is acknowledged by Eugene Manga Manga, the Democratic Republic of the Congo’s General Commissioner for Expo 2020. He has stated that, “The continent has a lot of difficulties, but it has also started to develop.” With rich natural resources and a youthful, entrepreneurial population, the continent does indeed have a lot to offer, and Expo 2020 may be the perfect chance to remind the rest of the world of this fact.

Photos : expo2020dubai.com/

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