Africa's foreign direct investment fell 16% to $40 billion in 2020, with a 5% growth projected for 2021.

In 2021, FDI to North Africa fell 5% to $9.3 billion, but Africa's FDI reached $83 billion, double 2020's amount.

Egypt aims to increase foreign direct investment to $10 billion and 3% of GDP by 2025.

South Africa and Mozambique had $40.889 billion and $5.102 billion in investment inflows, respectively, in 2021, with Mozambique's rising 68%.

Nigeria and Morocco saw foreign investment inflows of $4.844 billion and $2.153 billion in 2021, up 103% and 52%, respectively.

The energy and gas supply sector has seen significant investment, with projects totaling $120 billion and construction projects valued at $24 billion.

The UK leads African FDI with $60 billion, the largest European investment on the continent.

The US has $44.8 billion invested in Africa, while China has invested $300 billion, expecting $440 billion in revenue.

Gulf countries are major sources of FDI inflows to Egypt, investing in infrastructure and digital services.

The African Development Bank has formed partnerships with foreign companies to support African entrepreneurship.

The bank has made $10.3 billion available to the private sector from 2020 to 2023, supporting 36 projects that contribute to 12 Sustainable Development Goals.

The African Continental Free Trade Area has created a $3.4 trillion market, with Africa's population expected to reach 1.7 billion by 2030.

TotalEnergies is investing in African renewable energy, with five operational projects.

Kenya has attracted $21 billion in energy investments, 85% of which are in renewable energy.

Africa offers a significant opportunity for foreign investment due to its growing energy sector, large population, and need for infrastructure development.

Major foreign companies, such as TotalEnergies, and African entities have partnered to invest in and support Africa's renewable energy sector.

Africa's foreign direct investment fell 16% to $40 billion in 2020, with a 5% growth projected for 2021.

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Content: Global investors waiting to pour in money in Africa to firewall China

By IANS | Published: August 2, 2021 02:09 PM2021-08-02T14:09:05+5:302021-08-02T14:25:34+5:30

New Delhi, Aug 2: After a tepid inflow of foreign direct investments (FDI) into Africa in 2020 amid the ...

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New Delhi, Aug 2: After a tepid inflow of foreign direct investments (FDI) into Africa in 2020 amid the Covid-19, investors are once again warming up to the continent. According to the United Nations Conference on Trade and Development (UNCTAD), FDI flows into Africa declined by 16 per cent in 2020 to $40 billion, from $47 billion in 2019.

China, the primary investor in the continent, has also slowed down its investments into the continent leaving an opportunity for other investors.

While the UNCTAD projected FDI inflow into Africa to grow this year, it said that the slow vaccine roll-out programme is a cause for concern. According to UNCTAD, FDI to the continent is projected to grow by only 5 per cent in 2021. But analysts said Africa as an investment destination has led to "an unprecedented curiosity" among other countries, which are now aggressively looking to mute China's dominance in the continent.

"Africa is critical in the new geopolitical and geo-economic contours. The continent, with its vast natural resources, offers a ready growth platform," an analyst told India Narrative.

According to a study published by Brookings Institution last week, Africa is home to 17 per cent of the world population. However, by 2050, it will have 26 per cent of the global population 2.53 billion people. "If Africa is not successfully integrated into the global economy, there could be a major threat to global prosperity and stability," the study said, adding that by 2050, the continent will be home to an estimated $16.12 trillion of combined consumer and business spending.

The African Continental Free Trade Area (AfCFTA) – the mega trade could give a push to intra-continental investment.

Touted as one of the biggest trade deals in the world, the AfCTA aims to create a single market comprising 1.3 billion people with a combined GDP of about $3.4 trillion.

Meanwhile, the US may have woken up late in recognising the potential of Africa but is making all attempts to make up for the lost time.

The Group of Seven or G7 has already decided to support US President Joe Biden's proposal of carving out a mega infrastructure plan under the "Build Back Better World" (B3W) initiative, expected to bring in transparency and sustainability. Besides, the initiative will be carried out only in consultation with local communities.

The G7 in its meeting in June also announced that it will increase its support to the Indo Pacific and Africa. "We resolve to collaborate with partners around the world, including in the Indo-Pacific and Africa, to actively promote these shared values for the good of all," said the statement.

India too has pressed the pedal on investments in the region. Sources said that the still-born Asia Africa Growth Corridor—the mega infrastructure project that was launched in 2017 to connect Asia and Africa must be revived.

Carnegie Endowment for International Peace noted that Chinese financiers committed $153 billion to African public sector borrowers between 2000 and 2019. "After rapid growth in the 2000s, annual lending commitments to Africa peaked in 2013, the year the BRI was launched. By 2019, though, new Chinese loan commitments amounted to only $7 billion to the continent, down 30 percent from $9.9 billion in 2018," it said.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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In 2021, FDI to North Africa fell 5% to $9.3 billion, but Africa's FDI reached $83 billion, double 2020's amount.

Title:

Content: FDI flows to North Africa down 5% in 2021
Foreign direct investment to North Africa fell 5 percent to $9.3 billion for the whole of 2021, according to a report on “Investing in the World ” released by the United Nations Conference on Trade and Development (UNCTAD) on June 9, 2022.
These investments, towards Tunisia, improved slightly from $652 million in 2020 to $660 million in 2021.
The same investment to Morocco increased by 52 percent to 2.2 billion dollars in 2021, compared with a 12 percent drop to 1.5 billion dollars in Egypt.
Despite the decline in these investments in Egypt, it remains the second country to benefit from the inflow of foreign direct investment in Africa.
According to the same report, the flow of foreign direct investment in Africa reached a record level of $83 billion for the whole of 2021, more than double the investment achieved for the whole of 2020.
Despite this significant growth, the flow of investment to Africa in 2021 represented only 5.2 percent of the global total, compared to 4.1 percent in 2020.
Most African countries saw a slight increase in foreign direct investment (FDI) in 2021.
These investments developed in South, East and West Africa, while they maintained their previous levels in Central Africa, while declining in North Africa.
Europeans remain the most important investors in Africa, led by investors from the United Kingdom ($65 billion) and France ($60 billion).
Increased investments in renewable energy
Despite the overall positive trend of foreign direct investment towards Africa, the announcement of new projects remained weak at $39 billion and shows only a weak recovery compared to $32 billion recorded in 2020 and less than $77 billion recorded in 2019.
In parallel, the number of international projects in the field of renewable energies in Africa increased to an estimated 71 projects, almost double the 36 projects completed in 2011.
Among these projects is a $20 billion project that aims to export wind energy to the UK from Morocco.
By laying 3,800 km of submarine cables.

Egypt aims to increase foreign direct investment to $10 billion and 3% of GDP by 2025.

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Content: « Money » monitors the forecasts of economic analysts for foreign investment flows in the current year
A number of them predicted it would reach $10 billion.
Samar Al-Sayed
Praying for Mahmood
6: 59 AM, Wednesday, 27 Jul 22
Wael Ziadeh: The Russian-Ukrainian war is an opportunity for the Egyptian stock exchange to attract more capital
Esraa Ahmed: Clean energy, infrastructure and digital financial services are the most attractive sectors
Hani Geneina: Companies should be encouraged to reinvest their profits instead of transferring them to parent entities abroad
Naaman Khaled: Most of the money will come from Gulf markets
The Egyptian government aims to increase foreign direct investment flows, especially the Gulf, in the local market in the coming period, in light of the repercussions of the Russian-Ukrainian war on the global and local economies, and a number of analysts and macroeconomic experts estimated the value of these investments to reach $10 billion, driven by various factors, including the decline in the stock prices of companies on the stock exchange, and the exchange rate of the pound against the dollar.
The latest report issued by UNCTAD in June on the volume of foreign investment flows in 15 African countries last year showed that Egypt ranked second in the list, recording the volume of flows about 5.122 billion dollars compared to 5.852 billion in 2020 compared to 9.010 billion in 2019.
South Africa came first last year with a 1,235% jump in investment inflows of $40.889 billion compared to $3.062 billion in 2020 and $5.125 billion in 2019.
Wael Ziadeh, founder and CEO of Zela Capital, said that the Russian-Ukrainian war had negatively affected foreign direct investment flows in the world, while inter-state assistance had increased to counter the negative consequences of the war.
He explained to Al-Mal that these negative effects included the exit of investment flows from some emerging countries, which led to the impact of their trade balance, especially as their imports of food and oil more than their exports, for example Turkey and many European countries, as well as Sri Lanka.
On the other hand, the war represents a positive area for these countries, especially in activating the stock market sector, he said, adding that in this context, the Egyptian Exchange has opportunities to attract more foreign investments in the coming period.
He predicted that Egypt will take no more than six months to recover its trade balance once the war is over, as the prices of petroleum products and food will fall rapidly, as they rose rapidly after the outbreak of the war.
The objectives of the Egyptian government published in July 2021 in the second and final review report of the Credit Standby Arrangement Program signed with the International Monetary Fund, amounting to about $5.4 billion, indicated that the percentage of net foreign direct investments of GDP will rise to 2.5% in the current fiscal year compared to 2% in the last fiscal year, adding that it recorded 1.4% in the fiscal year 2021 / 2020, 2% in 2019 and 2.6% in 2019. / 2018.
These targets pointed out that the proportion of net foreign direct investment will jump to 3% of GDP in the fiscal year 2025 / 2024 compared to 2.9% in 2023 / 2024.
The government also expected in the report to increase the volume of foreign direct investment flows in the local market to about 11.7 billion in the current fiscal year against 8.6 billion dollars in the last fiscal year 2022 / 2021 to rise to 14.9 billion in the next fiscal year (2023 / 2024) and 16.5 billion in 2025 / 2024.
According to the Central Bank of Egypt ’ s forecasts issued in its statistical bulletin for May, the proportion of net foreign direct investment in GDP declined to about 1.3% in the fiscal year 2020 / 2021 compared to 2% in the fiscal year 2019 / 2020, adding that it was 2.7% in the fiscal year 2018 / 2019 and 3.1% in the year 2017 / 2018.
Economist Hani Geneina predicted that the value of net foreign direct investments in the local market will exceed 10 billion dollars in the coming period, due to several different factors, including the decline in the prices of shares of companies in the stock exchange and the exchange rate of the pound against the dollar.
However, Egypt was the second largest recipient of foreign direct investment in the African continent, he said, adding that recent pledges from Gulf countries to invest about $22 billion in various sectors will boost foreign direct investment in the future.
The number of new green projects in Egypt has more than tripled to $5.6 billion, according to the UNCTAD report, pointing out that for example, the UAE real estate company Reportage announced a real estate project worth $1.5 billion.
According to the report, the volume of foreign direct investment flows to North Africa declined by 5% to $9.3 billion last year.
Geneina told Al-Mal that the flows of foreign direct investments to the markets are divided into three types, the first is the acquisition of one company on another by more than 10%, pointing out that this investment happened last fiscal year, such as the acquisition of the UAE Holding “ADQ ” on several Egyptian companies, pointing out the importance of this type of investment, but it is not very useful in the list of foreign investments.
This type of rapid investment is encouraged by the decline in both stock prices on the stock exchange and the exchange rate of the pound against the dollar, as well as the recent government stimulus measures that included the implementation of the state ownership document.
The document of state ownership announced by the government in mid-June revealed the most prominent sectors that will witness the stabilization or reduction of government investments (while allowing the participation of the private sector), a number of activities in the transport, education, mining, real estate, electricity, telecommunications and sports sectors.
Geneina said that the second type of flows is the reinvestment of a foreign company present in the market for its profits again, pointing out that this type is classified in the balance of payments as foreign direct investments.
He added that the most prominent local sectors that will go to this type of investment is oil and gas, due to the high value of its profits achieved last fiscal year, and will therefore reinvest its large financial surpluses during the current fiscal year.
He pointed out that the third type of investment is the most difficult, which is the establishment of a new company or project from the beginning, and the employment of new workers, pointing out that for example, Dana Gas announced that it will expand its operations implemented in the local market.
This area is likely to witness an increase during the current fiscal year, especially in the oil and gas sectors and related sectors, namely petrochemicals and fertilizers, especially by Gulf investments in light of the features announced recently by the government, namely the state ownership document, the gold license, as well as the large financial surpluses they have, which motivates them to invest in the local market.
In mid-May, Prime Minister Mostafa Madbouly announced a number of concessions on the industrial sector, most notably the issuance of the golden license for some projects, pointing out that it will be granted once and include three areas as a start, namely green hydrogen, electric car manufacturing and infrastructure, seawater desalination projects and renewable energy.
Geneina stressed the importance of the government encouraging foreign companies to reinvest their profits in the local market instead of transferring them to parent companies abroad by providing incentives to urge them to take this step.
According to the latest UNCTAD report, Mozambique ranked third in the list of foreign investment flows to 15 African countries last year, and its inflows rose by 68% to $5.102 billion compared to $3.035 billion in 2020, while it recorded 2.212 billion in 2019.
Nigeria ranked fourth on the list, attracting inflows of 4.844 billion over the past year, an increase of 103 percent from the previous year, the data added, adding that it recorded 2.385 billion in 2020 and 2.305 billion in 2019.
Ethiopia followed in fifth place, and foreign direct investment inflows increased last year by 79% to $4.259 billion compared to $2.381 billion in 2020.
In the sixth place came « Congo » with the volume of flows of $3.691 billion, a decline of 8% from its value in 2020, and recorded 4.016 billion dollars, followed by Ghana in the seventh place in the list and increased flows by 39% to reach 2.614 billion dollars during 2021 compared to 1.876 billion in 2020.
According to data from the UNCTAD list, foreign direct investment flows in Senegal jumped by 21% to 2.232 billion against 1.846 billion dollars in the previous comparison period.
According to the report, the value of flows to Morocco increased by 52% last year to $2.153 billion, and a major international financing deal was announced there, a $20 billion construction project for a 3,800km transmission line to the UK with a capacity of 3.6 gigawatts, sponsored by English company Xlinks.
The Democratic Republic of the Congo ranked 10th on the list, with investments up 14% to $1.870 billion compared to $1.647 billion in 2020.
Gabon came in eleventh place, with direct investment flows falling by 5% last year to record 1.635 billion dollars compared to 1.717 billion in 2020, followed by Uganda, with flows rising by 31% to 1.142 billion dollars compared to 874 million in 2020.
Tanzania ranked 13th, with foreign investment up 35 percent in 2021 to $922 million compared to $685 million in 2020.
According to the bulletin, investment flows in Algeria decreased by 24% last year to $870 million compared to $1.143 million in 2020, pointing to the decline of investments in Tunisia to $660 million compared to $652 million in 2020 to be ranked 15th.
Esraa Ahmed, a macro-economic analyst at the investment bank “Ahly Pharos ”, agrees with Geneina ’ s opinion as she expects the volume of net foreign direct investment in Egypt to rise to about $10 billion during the current fiscal year (2022 / 2023), up from levels that will not exceed $7 billion in the fiscal year ending 2021 / 2022.
She added that this rise is driven by the Gulf investment flows that have been announced recently, and the acquisition deals that we see are witnessing activity during the current period.
There are other factors that may prevent net foreign direct investment from rising to larger numbers in the near future due to the continuation of the war in Ukraine and its repercussions on the global economy.
According to Ahmed, these factors are the economic situation of the European Union, which is an important partner for Egypt in terms of trade and investment, in addition to the general reluctance globally to risk starting new projects, and the prevailing outlook for emerging markets and the risks of their currencies.
On the sectors that may witness foreign inflows during the coming period, she said that the most prominent of them are clean energy, new infrastructure driven by the expansion of the state in this field, in addition to digital financial services, and some branches of manufacturing industries.
For his part, Numan Khalid, a macro-economic analyst at Arqaam Capital, said that the current circumstances in the world prevent the possibility of predicting the volume of foreign direct investment flows in the local market during the coming period.
He added that most of the investments come from the Gulf market, especially from Saudi Arabia and the UAE, pointing out that these two countries have benefited greatly from the recent increases in oil prices, and thus have a great financial solvency through which to invest in surrounding countries, especially in Egypt, which is one of their target markets.
He pointed out that health, hotels, real estate and the financial sector will witness an increase in the volume of investment flows to them during the coming period.
During his participation in the Qatar Economic Forum last June, the Minister of Finance, Mohamed Maait, looked forward to increasing the volume of Gulf investments with the transformation of their deposits in Egypt into real investments that benefit from the promising development opportunities available in various fields.

South Africa and Mozambique had $40.889 billion and $5.102 billion in investment inflows, respectively, in 2021, with Mozambique's rising 68%.

Nigeria and Morocco saw foreign investment inflows of $4.844 billion and $2.153 billion in 2021, up 103% and 52%, respectively.

The energy and gas supply sector has seen significant investment, with projects totaling $120 billion and construction projects valued at $24 billion.

Title:

Content: Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
It has reached $11 billion.
UN highlights doubling of foreign direct investment in Egypt
The United Nations Trade and Development Board (UNCTAD) said in its annual report on foreign direct investment flows for the year 2022, on Wednesday in Geneva, that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
Investment flows to Africa fell to $45 billion in 2022 from a record $80 billion in 2021 and accounted for 3.5 percent of global foreign direct investment, the report said, adding that international project financing deals targeting Africa showed a 47 percent drop in value.
The report pointed out that the number of announcements of new projects increased by 39% to 766, and that six of the 15 largest new investment mega projects (those worth more than $10 billion) announced in 2022 were in Africa, stressing that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
The number of new projects has more than doubled to 161, and the value of international project financing transactions has increased by two-thirds to $24 billion.
FDI inflows have risen over the past five years in four of the continent ’ s regional economic groupings, with FDI in the Common Market for Eastern and Southern Africa (COMESA) growing by 14% to $22 billion, and inflows also rising in the Southern African Development Community (SADC) (quadrupled to $10 billion) and the West African Economic and Monetary Union (WEMU) (doubled to $5.2 billion). East African Community (up 9% to $3.8 billion).
According to the report, the largest increase in 2022 was in new field projects announced in energy and gas supply (to $120 billion from $24 billion in 2021), and the value of projects in construction and extractive industries rose to $24 billion and $21 billion, respectively, while the information and communication sector recorded the largest number of projects.
European investors remain by far the largest owners of FDI in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion).

The UK leads African FDI with $60 billion, the largest European investment on the continent.

Which European countries lead investment in Africa?

Which countries are actively investing in Africa besides China?

The US has $44.8 billion invested in Africa, while China has invested $300 billion, expecting $440 billion in revenue.

Title:

Content: Wednesday 23 August 2023
Chairman of the Board of Directors and Editors
Abdurrahim Ali
Editor-in-Chief
Dalia Abdul Rahim
Chairman of the Board of Directors and Editorial Board
Abdurrahim Ali
Editor-in-Chief
Dalia Abdul Rahim
The world.
China accounts for 31% of Africa ’ s infrastructure projects
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According to a report by the Heinrich Foundation, a Singapore-based charity that promotes sustainable global trade, China ’ s rise in infrastructure construction in Africa has accelerated since the launch of the Belt and Road Initiative in the fall of 2013.
Chinese companies accounted for 31 per cent of Africa ’ s infrastructure contracts last year, worth more than $50 million, compared with just 12 per cent of Western competitors, the report said.
The report pointed out that China ’ s strong rise in infrastructure projects in Africa has increased since the launch of the Belt and Road Initiative, and in 1990, Western companies accounted for 85% of infrastructure contracts in Africa.
In 2013, Chinese companies accounted for only 12% of these contracts, compared to 37% for Western companies.
The report also revealed that the value of infrastructure projects implemented by China in Africa over the past two years amounted to 155 billion dollars, compared to only 44.8 billion dollars for foreign direct investment by the United States in the continent in 2021.
According to a recent study by consulting firm McKinsey, more than 10,000 Chinese companies are now operating in Africa, and the combined revenues of these companies, which have invested $300 billion in the continent, are expected to reach $440 billion in 2025.

Which countries are actively investing in Africa besides China?

Gulf countries are major sources of FDI inflows to Egypt, investing in infrastructure and digital services.

Which sectors received the most foreign investment?

The African Development Bank has formed partnerships with foreign companies to support African entrepreneurship.

Title:

Content: Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Al-Mashat delivers a speech at the regional workshop on the exchange of experiences in the field of entrepreneurship promotion
Dr. Rania Al-Mashat, Minister of International Cooperation, delivered the opening speech at the Regional Workshop on Sharing Experiences in Entrepreneurship Promotion, organized by the African Development Bank (AfDB) within the framework of the Entrepreneurship, Innovation and Consulting Initiative, which was launched in 2019 by the Bank through its Regional Office for North Africa to support the sector in Egypt, Tunisia and Morocco.
In her video speech, the Minister of International Cooperation stressed the importance of the initiative launched by the African Development Bank as part of efforts to support entrepreneurship and small and medium enterprises in the North African region, and the importance of the workshop in strengthening regional partnerships, sharing best practices, exploring innovative solutions in the field of entrepreneurship, including the informal sector and enhancing impact investment.
Egypt is continuing to strengthen its efforts with multilateral and bilateral development partners to support the role played by the private sector as well as medium and small companies and entrepreneurs to create jobs, increase employment rates and support economic growth.
In line with the recommendations of the Economic Conference Egypt 2022, the Ministry of International Cooperation has launched Hafez platform for financial and technical support for the private sector, which is the first integrated platform linking financial and non-financial services provided by multilateral and bilateral development partners to the local and foreign private sector to support development efforts in Egypt. A key pillar of inclusive and sustainable growth, and the largest supporter of the labor market through the creation of more employment opportunities in various fields, indicating the readiness of the Ministry through the African Development Bank initiative to exchange experiences with countries in the continent of Africa on the mechanism of launching the platform.
She pointed out that international partners have made available over the past four years from 2020 to 2023 about $10.3 billion in financing, whether in the form of development financing or investments to the private sector, in addition to technical support, although there are some challenges that prevented some companies from knowing what development partners provide services to the private sector.
Digitization, innovation and entrepreneurship are at the forefront of the Ministry of International Cooperation ’ s current portfolio includes 36 projects worth about $1 billion that contribute to the implementation of 12 Sustainable Development Goals, she said, adding that regional interest in supporting entrepreneurship, start-ups and small projects can enhance South-South cooperation efforts between countries.
The African Development Bank ’ s EInA initiative guides public policies to promote entrepreneurship and support small and medium enterprises (SMEs), improve the design of programs that support SMEs, and develop innovative solutions to address the challenges that prevent companies from scaling up and achieving sustainability.

The bank has made $10.3 billion available to the private sector from 2020 to 2023, supporting 36 projects that contribute to 12 Sustainable Development Goals.

The African Continental Free Trade Area has created a $3.4 trillion market, with Africa's population expected to reach 1.7 billion by 2030.

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Content:
BusinessDay

Opportunities in volatile trade environment, the AfCFTA perspective

Trade Finance is the fundamental driver of economies around the globe. Regardless of economic cycles and the implications of macro events such as the financial crises in 2007 and 2008, Brexit, the economies of all countries around the world continue to be driven by parties trading commercially in exchange of goods.

Therefore, smooth settlement of commercial contracts and a smooth exchange of goods to satisfy the demands of the end consumers is paramount.

The outbreak of the COVID-19 pandemic caused a huge disruption to all sectors of global economy most especially international trade in goods and services, which dipped by about 10 percent in 2020 because of the lockdown in many parts of the world and the disruption in production, supply chain and consumption.

Further effects of the COVID-19 were the limitations in the movement of goods and services as well as people, huge demurrage payments due to delays in receipt of negotiated sets of documents for clearing at the ports.

According to the United Nations Conference on Trade and Development (UNCTAD) Secretariat calculations on national statistics, it was noted that international trade began to recover slowly for a lot of the major economies during Q3’ 2020, while a noticeable general recovery happened in Q4’ 2020.

In Nigeria, a significant 57.60 percent increase was noted in foreign trade goods when comparing 2021 with 2020. This was according to the National Bureau of Statistics (NBS).

Africa’s growth in trade

The fast growth of population and markets in Africa offers businesses several opportunities despite the slow growth globally.

Investments and innovations from businesses within Africa are necessary to meet the ever-growing demand for goods and services, infrastructure gap closure, job creation and poverty alleviation.

African Continental Free Trade Area (AfCFTA) has created a borderless market worth $3.4 trillion. This would reduce contraction in growth caused by COVID-19, reduce inequality and poverty trends, and encourage an inclusive continental growth.

Africa’s current population of around 1.2 billion people is projected to reach 1.7 billion by 2030. It has been noted that 34 percent of households in Africa live below the international poverty line of $1.9 per day.

Also, approximately 40 percent of the total wealth belongs to 0.0001 percent of Africa’s population, according to a report issued by the UNCTAD. The pandemic has worsened the case of vulnerabilities and inequalities of marginalised people, leading to an additional 37 million people in sub-Saharan Africa (SSA) living in extreme poverty.

Data from the African Development Bank (AfDB) show that the continent’s current untapped export potential amounts to $21.9 billion. It is expected that an export potential of $9.2 billion would be realised through a partial tariff liberalisation plan of AfCFTA over the next five years.

Also critical is enhanced pan-African collaboration in service export, which will play a key role to deliver on the 2030 Agenda for Sustainable Development.

According to the World Bank, by 2030, the largest consumer markets will include Nigeria, Egypt, and South Africa.

Lucrative opportunities in countries like Algeria, Angola, Ghana, Kenya, Morocco, Sudan, Ethiopia, Tunisia, and Tanzania, among others in Africa. Ethiopia, as an example, is reportedly one of the fastest-growing economies in the world over the past decade, with an average annual growth of 10.5 percent GDP from 2005-06 to 2015-16

Opportunities in ICT and mobile access

The rapid diffusion of ICTs in Africa over the past decade has facilitated access to consumers in new and varied ways.

Africa is currently the fastest-growing mobile telecom market in the world, averaging roughly 30 percent increase in mobile phone connections per year since 2000, and recently overtaking Latin America to become the world’s second-largest mobile market behind Asia

SSA experienced the world’s fastest rate of new broadband connections between the years 2008 and 2015.

Also, with the introduction of many players in the telecom space, mobile data traffic is expected to increase in multiple folds between 2017 and 2022. Mobile money accounts that are active are close to 120 million users, which is over 50 percent of the global total.

This has reduced usage of traditional banking products. It is expected that this would allow companies to improve their productivity, increase transaction speed, and access other markets. It could additionally increase the continent’s GDP by 2025 by over $300bn.

Agricultural resource growth

Africa has always been known for her riches in agriculture and mineral resources. Though this has not been translated into economic growth, shared wealth, innovations and further investments can change the picture.

The sector can create exciting growth opportunities for businesses. Africa can produce what it eats and move to the top of the food value chain globally. Agro-industrialisation would add value to what is being produced.

Industrialisation in Africa

The timely intervention on the industrial development of Africa is a welcome development. Africa is probably the least diversified in the world, with minimal progress recorded over the last two decades on industrialisation.

It is suggested that African industries have the opportunity to double production to nearly $1 trillion within a decade. Three-quarters of that growth is likely to come from manufacturing to substitute imports and meet rapidly growing local demand.

Urbanisation

Africa’s urban growth is the fastest in the world. The continent’s population is projected to double between now and 2050.

It is expected that Two-thirds of this growth will happen in the urban areas. 30 years from now, the cities will house an additional 950 million people globally.

There are lots of opportunities that come with this, as well as challenges for businesses, citizens and the government of Africa.

Read also: Beyond ECOWAS, 18 months of AfCFTA yet to show in Nigeria’s exports

There is a need to revamp political development agendas and improve policy decision-making. The implications of this have lasting consequences over generations.

These trends are promoting a spike in sector developments such as in pharmaceuticals, financial services, education, healthcare and so on.

Payment solution – PAPSS

By simplifying cross-border transactions and reducing the dependency on hard currencies, intra-African trade is boosted significantly and promotes the implementation of the AfCFTA, which is a force for African governments to address their infrastructure needs as well as to overhaul regulation relating to tariffs, bilateral trade, cross-border initiatives and capital flows.

The Pan African Payment and Settlement Systems (PAPSS) is a central Financial Market Infrastructure (FMI) that supports payment arrangements for the purpose of expanding the international trade of African States, and to facilitate central bank’s economic and financial integration.

PAPSS is currently live in the West African states Monetary Zone (WAMZ) in the following countries: Nigeria, the Gambia, Sierra Leone, Liberia, Ghana, and Guinea. Engagements are ongoing with all African Central Banks and all regional payment institutions.

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TotalEnergies is investing in African renewable energy, with five operational projects.

Title:

Content: For a fair and just energy transition in Africa

With abundant solar, wind, and hydro resources, Africa has significant potential to leapfrog traditional fossil fuels and embrace cleaner, more resilient energy systems. A panel of stakeholders explored the challenges.

By

Political and business leaders across Africa have declared themselves ready to leverage the continent’s resources to boost energy access and facilitate green growth. However, this transition also presents challenges, including the need for substantial investment, infrastructure development, and ensuring equitable access to energy for all populations.

In the July edition of its Energy Series, African Business convened a panel of experts to discuss how African countries can navigate the challenges and take full advantage of the opportunities presented by the transition. The panel included John Leonard Mugerwa, Uganda’s deputy high commissioner to the United Kingdom; Caroline Kende-Robb, senior director of strategy and operational policies at the African Development Bank; Mike Sangster, senior vice president for Africa at TotalEnergies; Fola Fagbule, deputy director and head of financial advisory at the Africa Finance Corporation (AFC); and Adam Kendall, a partner at consultancy McKinsey and head of sustainability practices in Africa.

The discussion was moderated by Hannah Ryder, chief executive officer and founder of Development Reimagined.

Kendall set the stage by observing that the two main drivers that will have an impact on energy transition in Africa are economic and population growth. Economic growth is projected to be around 1.8% annually; the population of the continent is expected to double by 2050. Noting that “increasing energy access is incredibly important for economic development,” Kendall said a pathway to net zero must be integral to the continent’s energy expansion plans.

“Africa has a central role to play in helping the world achieve its net zero ambitions. The modelling we have done shows that without Africa, the world will not be able to get to a 2 degree pathway.” But Africa’s path to transition is hampered by limited capacity and insufficient, unreliable and weak grid networks. Its energy system is highly decentralised, with a high penetration of diesel.

“Everyone points out that Nigeria has an energy system of 4 GW or 5 GW but the reality is that when you look at the decentralised system, it’s somewhere between 40 GW and 60 GW.” This creates an opportunity that can also drive the transition. Africa is a prime market for low-cost renewable energy and has 7 of the 13 top countries with combined solar and wind capacity factors.

Africa also holds nearly 9% of the world’s gas reserves, which Kendall said can be utilised as a transition fuel.

Pointing out that lack of full flexibility in matching demand changes is a challenge for renewables, Kendall said a significant mix of on-grid and off-grid technologies will be needed, as well as a transition from diesel-based decentralised systems to renewable decentralised systems.

Uganda’s transition path

Mugerwa said Uganda was aiming for tenfold economic growth over the next 15 years to reach a target of $500bn. The country’s energy transition plan, finalised in 2023 with support from the International Energy Agency, aims to enhance access to affordable, clean energy in line with Goal 7 of the Sustainable Development Goals. He noted that 90% of Uganda’s current energy comes from renewable sources, such as hydropower and solar. However, only 20% of the population has access to electricity, with rural areas particularly underserved.

Uganda plans to increase its energy capacity from 1.5 GW to 52 GW by 2050. “The government is calling upon the regional development banks, the international financial institutions, and even the private sector,” Mugerwa said, emphasising the necessity for concessional financing to reduce energy prices for both domestic and industrial use.

To further diversify its energy mix, Uganda is exploring nuclear energy options in collaboration with the International Atomic Energy Agency and a South Korean firm. “We are hoping that in the next 6-7 years, we can have about 2 GW from the first nuclear energy plant.” This initiative, he stressed, aims to complement the existing renewable energy sources to meet the country’s growing energy demands.

Fair and just

Kende-Robb said a fair and just energy transition is what Africa needs, including a balanced energy mix that includes both renewables and transitional fuels such as gas to address the continent’s unique challenges and opportunities. “We recognise the need for an energy mix that includes everything,” she said, adding that, despite pressure from some quarters to avoid investing in fossil fuels entirely, “we can’t just change from where we are now to only investing in renewables, even though we have all the resources.”

Highlighting the African Development Bank’s commitment to renewable energy, Kende-Robb pointed out that from 2016 to 2022, the bank approved $8.3bn in energy commitments, with 85% directed towards renewable projects. These projects, including Light up Africa and the Desert to Power project, which aims to provide renewable energy to 250m people across 11 Sahel countries, exemplify the bank’s strategy to integrate Africa into the global economy and improve the quality of life for its people.

Renewable is practical

Fagbule argued that many, himself included, are adopting off-grid power solutions, including rooftop and home solar systems, out of practical need: “while I care about the environment, it is primarily an efficient solution.”

He pointed to AFC’s investments in Infinity Power, which currently operates 1.3 GW of renewable energy assets across multiple countries, with plans to expand to 10 GW by 2030. “Already, it is helping to avoid about 3m tonnes of carbon dioxide.” In Côte d’Ivoire energy access has dramatically increased from 10% to 94% of households in the last decade.

Transitional gas

Sangster also took the view that gas can be utilised as a transitional fuel. While renewable energy has, in the long term, a competitive edge, there are inherent challenges. “If you are going to invest in these large-scale plants and recover it over a 10 to 15 year period, there has to be some [regulatory] stability.” While conceding the challenges including power- buying monopolies, purchasing power of consumers, currency risks and erratic distribution networks, Sangster said Total is nevertheless investing in renewable energy projects on the continent. “We have five in operation in Africa at the moment, and more under construction. We are also looking at another 10-15 projects. We are also part of the project to bring power from Morocco to the UK.”

Responding to a question from the audience, Kende-Robb stressed the importance of adhering to the principles of COP21, particularly the concept of “common but differentiated responsibilities,” which recognises that countries will transition differently due to varying starting points, an approach meant to ensure that transitions do not exacerbate inequalities.

Fagbule noted that while the challenges to energy generation in Africa have long persisted, renewable energy solutions are one of the fastest-growing methods to overcome these issues, allowing for decentralised energy supply. “Ten years ago, we would have loved the opportunity that we have now to be invested in the largest renewable energy platform.”

Sangster pointed to the significant financing challenges associated with meeting Africa’s growing electricity demand: “If you want to have 100 GW, then it’s $100bn.” The Tilenga onshore oil project in Uganda had, he said, created up to 18,000 direct and 60,000 indirect jobs, along with training programs totalling 3m man-hours.

Concluding, Ambassador Mugerwa emphasised the need to recognise the principle of common but differentiated responsibility. While committed to the Paris Agreement and aiming for net zero by 2050, Mugerwa pointed out that without economic growth, the goal of achieving clean energy would be unattainable.

He noted that African countries, like Uganda, will still need oil and gas for the next 20 to 30 years. He cited the difficulties faced in financing the oil and gas pipeline project in Uganda, despite its importance for the country’s development, and called for multilateral financial institutions and the private sector to be realistic about supporting such projects.

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African Business

Kenya has attracted $21 billion in energy investments, 85% of which are in renewable energy.

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Content: ECONOMY
Mulla: International partnerships in Africa will enable technology transfer and connect local partners
Thank you for reading the news about Al Mulla: International partnerships in Africa will enable technology transfer and connect local partners.
Minister of Petroleum and Mineral Resources Tarek El-Molla said that talking about the exploitation of energy in the African continent should include energy of all kinds and integration, especially as the African continent has various natural resources that can be exploited to diversify the appropriate energy mix that meets the needs of the continent's peoples while reducing emissions.
This came during the session “Moving Forward in Support of Low-Carbon Development Pathways in Africa and Developing Countries ” during the Day of Decarbonization at the Cop27 Climate Summit.
With regard to the development of the energy sector in African countries, the minister pointed to the Egyptian experience in transforming the challenges of the energy sector over 7 years into success stories based on the state ’ s provision of the appropriate investment climate to attract new investments and build confidence in investment in Egypt with international partners, which led to balanced partnerships with international energy partners.
He added that international partnerships in Africa will allow the transfer of technology and link local partners to it, stressing the importance of building a good work system in all fields such as oil, gas, electricity and renewable energy.
He pointed to the importance of African countries providing incentives to partners because some policies do not include the necessary incentives to attract investments and we must attract them to our countries and allow the participation of the private sector, Al-Mulla concluded that there are great challenges but we have the advantages in Africa to build our future through cooperation and partnership to prosper the continent.
African Development Bank President Akinwumi Adesina praised the Egyptian effort in organizing the conference, pointing out that the African Bank is committed to providing $5 million in new and renewable energy projects where Africa owns 45% of the renewable energy in the world, which makes it eligible to establish giant solar energy projects. He cited the experience of Kenya, where we managed to attract large investments of up to 21 billion dollars in the field of energy, whether oil, gas or new and renewable energy in a short time because we paved the way and worked to change policies and renewable energy represents 85% of the investments in the field of energy and we also use natural gas.
Egyptian industries are promising industries that can catch up with China, but they need to increase funding and encourage investment, and we should focus on the African market in directing industrial activities to achieve the best use of natural resources, especially relying on clean energy.
Helmet von Stroff, CEO of Siemens Middle East, said that this year ’ s conference provided an opportunity to discuss challenges and opportunities towards decarbonization and finding sustainable solutions, stressing the importance of supporting African countries towards a low-carbon economy and providing the necessary technical support, especially for developing countries.
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Content: Optimists talk about Africa as the next economic frontier

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BY DELIA DE VILLIERS

For years Africa has been shrouded in controversy when it comes to its future potential. The optimists talk about Africa as the next economic frontier, while the sceptics point to a low growth rate, poverty and conflict as key challenges standing in the way of notable development.

Yet, the continent has grown its economy by around 5 percent a year over the past decade, is as urbanised as China and has as many cities as Europe with a population of more than one million, according to Future Agenda.

The World Bank reports that sub-Saharan Africa is “home to more than 1 billion people, half of whom will be under 25 years old by 2050”, suggesting that the workforce of the future is based here. They go on to say that Africa is a “diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty”.

While potential is not a measure of performance, what is productive is to consider the motivations of businesses opting either to enter the African market or expand operations on the continent. And that’s notwithstanding the challenges, or as Shaw Mabuto, partner at private equity firm Spear Capital, puts it: “While there are undoubtedly risks in Africa, they are well known and understood. Investors can mitigate for them.”

Spear Capital is particularly excited about the opportunities in the ESG (environmental, social, governance) space in Africa. “There are many businesses that have been able to thrive in spite of the prevailing environment and lack of government support. With the right backing, companies across the continent can grow successfully while at the same time making the world a better place and providing returns to their investors,” Mabuto says.

Google’s recent announcement of plans to invest $1 billion (R15.6bn) to support digital transformation in Africa is another very positive indicator of the potential of the continent. The investment, which was announced in October 2021, will be used to enable affordable internet access and building helpful products, for investments in entrepreneurship and technology, as well as to empower businesses as they continue or embark on their digital transformation.

This positive sentiment about Africa’s potential is echoed by a number of businesses who have chosen to expand their operations on the continent.

Picking your next market is key

When SweepSouth decided to scale their business across the African continent in 2020, they chose Kenya as the first territory to launch their on-demand home services model outside of South Africa’s borders. Three months ago they started operations in Nigeria, and plans are now afoot to expand further into Africa.

“There are so many factors that go into choosing a new market, so we decided to look at countries where people experience the same sort of home-care needs South Africans required when SweepSouth was started,” says Aisha Pandor, SweepSouth chief executive.

Kenya and Nigeria were obvious choices, representing big-market regions with a high growth opportunity, ever-increasing internet penetration and digital literacy, and the potential for positive impact on employment, education and economic growth via smart, scalable technology solutions.

“Kenya appealed to us because it felt like an in-between in terms of culture, market segment and dynamics, and also smartphone and internet penetration when compared with West Africa. And Nigeria is a really exciting new venture that we hope will serve as a base for further expansion into the West African region,” says Pandor.

West Africa, too, is increasingly recognised as an area of economic and growth interest for businesses looking to get a foothold on the continent.

Integrated PR and marketing agency Irvine Partners recently opened an office in Ghana in response to an increasing number of their global clients needing support there. The agency already has wholly owned offices in South Africa, Kenya and Nigeria, and has realised the potential of this West African country.

“Most of our clients’ interest in the region stems from Ghana’s position as a tech hub within sub-Saharan Africa and its growing financial services industry, but we’re also seeing many other industries looking to invest in and expand into the country. Strategically, it makes a lot of sense for us to have a presence in the country and we’re optimistic about its potential,” says managing director Hayley van der Woude.

Beyond the obvious

Importantly, the interest in Africa extends beyond the traditionally popular economic areas such as Lagos, Nairobi and Accra, with Mauritius serving as a prime example of potential beyond the obvious. It is currently the top-ranked economy in sub-Saharan Africa, according to the World Bank’s Ease of Doing Index and is recognised for offering a sound political and economic environment that strongly encourages investment thanks to a sophisticated banking system, a favourable tax regime and low inflation.

These are among the main reasons.

The Business Exchange (TBE), a South African-launched serviced office offering, not only expanded operations to Mauritius but also designed an investment opportunity for others with their sectional title shared office investment that offers a safe and affordable way to get into this bustling market.

“Mauritius, in our view, is fast becoming one of the hottest investment hubs on the continent. Major international brands, including Samsung, Broll, Expedia and NBA (North America’s National Basketball Association), are based at our serviced office space there, which speaks to the interest in the location and offers an indication of its dynamism as a business destination,” says David Seinker, the founder and chief executive of TBE.

Embracing innovation

Lastly, but certainly very significantly, when it comes to businesses where customer-centricity is key, such as banking and telecoms, African players compete more effectively than their international counterparts, according to a finding in the Boston Consulting Group’s digital maturity index.

“It’s also hardly surprising that these are two sectors where Africa has led the world when it comes to technology-led innovation,” says Ngadi Job Goshi, the general manager at Liferay Africa. “Ultimately, while Africa may be less digitally mature than other markets, there can be no doubt that businesses on the continent are unafraid to embrace technology and innovation. And, in the customer-centric ways in which they’ve done so, despite facing adversity and strong headwinds, there are lessons for the rest of the world in the tenacity and ingenuity birthed and nurtured in the African soil.”

Delia de Villiers is the senior account manager, Irvine Partners.

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