In mid-June, the European Commission announced an increase in tariffs to 38.1% on imports of Chinese-built green vehicles, arguing that these vehicles benefit from Chinese government subsidies, infringing on fair competition in the European common market.

The US and Canada have also raised concerns over subsidies offered by Chinese government and proposed even higher- 100%- tariffs on Chinese-made EV imports.

Now, Chinese EV makers are turning to Africa as their best alternative market- ramping up their push into the continent through expansion of dedicated stores to more countries and partnerships with local companies to venture into the market.

One of Europe’s best selling Chinese electric vehicle brands, BYD (Build Your Dreams), launched a showroom in Zambia this September – its fourth market in Africa.

BYD has entered into a strategic partnership with Pilatus Electric Mobility Zambia Limited (PEM), to showcase a range of electric vehicles (EVs), and affirm its commitment to expanding its footprint in Africa.

In January 2024, BYD entered the market in Rwanda and has recently joined forces with the country’s Ampersand, following successful launches in South Africa in July 2023 and Kenya in 2022. 

In Kenya, EV company BasiGo and local manufacturer, Associated Vehicle Assemblers (AVA) have committed to integrating BYD’s technology.

In June, another Chinese brand, NETA Auto, opened its first flagship store in Kenya and is looking to leverage on this debut to venture into other African markets.

“Kenya not only serves as a gateway to Southern, Central, and Eastern Africa but is also a key node in the Belt and Road Initiative. By leveraging Kenya’s strategic location, NETA Auto aims to deepen economic and trade ties with African countries,” said the company in a statement.

Neta is a brand developed by Hozon New Energy Automobile, an EV manufacturer that was established in 2014 and produced 127,500 vehicles in 2023. Over the next two years, the auto maker plans to enter 20 countries, open 100 stores, and achieve an annual sales volume of over 20,000 units within three years in Africa.

Another smart electric vehicle company, XPENG, also founded in 2014 in China, partnered with an Egyptian auto maker, Raya Auto, to introduce two of its brands in the North African market.

“Our company is confident in the promising opportunities that lie within the Egyptian market, and we are enthusiastic about introducing cutting-edge and environmentally-friendly electric vehicle technology to consumers in Egypt. We anticipate great success in the market,” said XPENG MEA region General Manager Wang Ke, in a statement.

Research firm Statista projects Africa’s electric vehicle sales in 2024 to be slightly over 2,000 units and grow to over 3,600 by 2029, citing government incentives and the need for sustainable transportation solutions as key adoption drivers. It also affirms Chinese auto brands as key beneficiaries in this US$204.8m market in 2024.

“From an international perspective, it is evident that China will generate the highest revenue in the Electric Vehicles market,” according to Statista.

The expanding lineup of Chinese EV brands is also expected to rattle the larger general car market in Africa currently enjoyed by European and Japanese brands like Volkswagen, Toyota Motor and Suzuki.

The bigger advantage the Chinese makers will have over the traditionally known brands will be the electric powered variants and perhaps an attractive price point since European and Japanese brands in the market are largely focused on gasoline-powered vehicles with only a few EV models locally.

New vehicle sales in Africa stood at 1, 049, 842 by close of 2023, with South Africa the largest car market recording the biggest sales at 531, 787 followed by Morocco(161 504) and Egypt (86 044), according to data by the International Organization of Motor Vehicle Manufacturers(OICA).

Used vehicles in Africa however, make up a significant portion, accounting for 85% of the overall vehicle fleet on the continent, according to research firm Mordor Intelligence.

Among all the countries in Africa, Mordor intelligence cites Egypt and Morocco as the growth enabler for Africa’s used car market, owing to their widespread consumer groups and support for used cars. South Africa, Nigeria, and Kenya are the next countries keeping pace with the market with the two North African countries.

“Consumers in the regions were deeply attracted to these used cars owing to an increase in their purchasing capabilities and a hike in their average disposable income during recent times,” said the research firm.

bird story agency

The latest African drone procurement data shows the continent is recording “significant progress” in developing indigenous drones – potentially sparking an arms race – as countries vie to gain a technological edge over their neighbours.

The data by Military Africa, an online defence industry resource, tracks up to 35 different made-in-Africa drone models – either in operation or beyond the prototype stage.

“The unmanned aerial vehicles have been developed across seven African countries by thirteen different companies, showcasing the continent’s growing expertise and innovation in this field,” said Military Africa in the 2024 procurement data report.

The digital defence industry resource lists Egypt, Sudan, South Africa, Nigeria, Kenya and Ethiopia among countries with traces of indigenous technology production of these small aircraft, operated remotely without a human pilot on board.

There are currently some 180 locally-made units. The majority are fixed-wing (174), while rotary wing and vertical take-off and landing (VTOL) are less common types in the market at three units each.

Fixed-wing drones are suitable for long-endurance and long-range missions like search and rescue, maritime patrol and air strikes.

Regionally, Southern Africa leads in locally-produced drones, producing 94 units across 12 models. North Africa follows with 51 units across 14 models, West Africa has produced 20 units and East Africa 15.

South Africa’s Denel is Africa’s leading and largest drone manufacturer.

“South Africa was an early adopter of unmanned aerial vehicles and the military pushed drone development from 1970. Refined by combat experience, the drone industry blossomed in the 80s,” according to the report.

In September 2023, South Africa recorded a “significant milestone” when its locally-manufactured UAV, the Milkor 380 – with an impressive 18.6-meter wingspan and a maximum takeoff weight of 1300 kilograms – achieved its inaugural flight.

Nigeria hosts Africa’s second largest drone manufacturer, the Airforce Institute of Technology (AFIT) with 20 units produced since it started operations in the 2000s.

Nigerian drones include the Tsaigumi UAV, developed in a collaboration between the Airforce Research and Development Center and Portugal-based UAVision.

While North African countries like Egypt are heavily dependent on military drone imports, there are several locally-built or assembled units. These include the EJune-30SW model, which was produced by Egypt’s Ministry of Military, using complex robotics, which Military Africa says could probably be a result of technology transfer from the United Arab Emirates to the North African country.

Another Egyptian-made model is the ASN-209 UAV, a collaboration between the Egyptian Military and Chinese defence manufacturer, Xi-an Aisheng Technology Group.

In Algeria, Star Aviation developed the Amel-Series in 2013. The Amel 300, developed in 2016, was manufactured by the Center Industrial Research Technology (CRTI), with 17 units produced to date.

Tunisia’s Nasnan drone, produced by Tunisia Aero Technologies Industries (TATI), first took flight in August 1998.

“North African countries are not only enthusiastic importers of weapons, they are also increasingly aiming to create indigenous defence capabilities,” says the report.

In East Africa, Kenya and Ethiopia are at the top of the list for local manufacturing of military drones.

Kenya has reverse-engineered Israel’s Aerostar drone – christened ‘TAI’ – with the help of Turkish engineers. The model was unveiled in 2021.

Ethiopia’s WanderB (designated MDAV-1) has two variants: UAV and Reserve Component (RC) Training. In 2010, the country also displayed a prototype, the MALE UAV, developed by Ethiopian engineers and Turkish company, Milyaz.

Drones have been used for a variety of purposes in Africa, from combating terrorism to monitoring illegal activities like poaching and smuggling to delivering medical supplies to remote areas. There is an increased focus now on military drones, however.

“The use of military drones in Africa has sharply increased in recent years, with at least 21 countries operating drones for military purposes,” the report reads, with information gleaned from procurement data.

Nigeria, Algeria and Ethiopia are listed as the most viable markets for domestic drone industries, based on the number and types of drones purchased annually. Nigeria leads with 28 types.

Egypt has purchased the most drones, at 267, followed by Morocco with 233. North Africa is considered Africa’s most powerful region in terms of military capabilities and expenditure.

Nigeria comes third on the list with 177 drones purchased and is also considered a heavy military spender.

Africa mostly imports military drones from China (400 units), Israel (309 units) and the United States of America (227 units).

– bird, story agency

At least 10 global powers are training their eyes on Africa’s critical mineral supplies, according to the organisers of an upcoming event in South Africa.  

Europe, the United States, United Kingdom, Canada, Australia, China, Japan, South Korea and the Brics countries of Brazil, Russia, India, China and South Africa have lined up as delegates in Africa’s inaugural Critical Minerals Summit slated for mid-October in Cape Town, as the world scrambles for rare earth and “transition” minerals.

Organisers of the summit, Energy Capital & Power (ECP), have described the summit as a dealmaking space for governments and the private sector. 

Participants will be able to hold bilateral and multilateral discussions and deals to both advance critical minerals production and to process and plan strategic roadmaps for minerals and energy security. 

“This is the African critical minerals dealmaking space, standing at the intersection of energy and mining, linking global consumers and producers, and bringing capital and buyers to African projects,” ECP conference director James Chester said in the event’s brochure.

The International Energy Agency (IEA), in its Critical Minerals Market Review 2023, said a push for sustainable supplies backed by the proliferation of new policy frameworks is fuelling a scramble by global powers.

“Countries are seeking to diversify mineral supplies with a wave of new policies. There is growing recognition that policy interventions are needed to ensure adequate and sustainable mineral supplies,” said IEA researchers in the review.

The IEA Critical Minerals Policy Tracker identified nearly 200 policies and regulations enacted to address the sector globally, with more than 100 enacted in the past few years.

The EU, US, Australia and Canada all have adopted critical mineral Acts and strategies.

In its Critical Minerals Strategy 2023-2030, published in June, Australia plans to secure strategic and commercial partnerships to develop new, diverse, resilient supply chains as it seeks to move beyond its traditional reliance on exporting ore.

In March, the president of the European Commission, Ursula von der Leyen, said the European Union was strengthening its cooperation with reliable trading partners globally to reduce the EU’s dependence on just one or a few countries.

“It’s in our mutual interest to ramp up production in a sustainable manner and at the same time ensure the highest level of diversification of supply chains for our European businesses,”  Von der Leyen said.

The US, in its Inflation Reduction Act, allocated $369 billion in Energy Security and Climate Change programmes over the next 10 years.

Chinese firms have been intensifying investments into Africa’s critical mineral exploration projects, with Zimbabwe’s lithium projects attracting more than $1 billion over the last two years. A $300 million lithium project by Chinese battery metals producer Sinomine Resource Group, completed in July, is the latest.

Data compiled by the Critical Mineral Summit Africa organisers show that Zimbabwe can meet 20% of the world’s lithium demand. It also shows that the Democratic Republic of the Congo produces 43% of the global mined lithium supply, highlighting increased investments in this space.

The IEA Critical Minerals Market Review shows companies specialising in lithium development recorded a 50%  increase in spending, followed by those focusing on copper and nickel. It states that Chinese firms doubled their investment spending in 2022.

The review, tracking investments of 20 large mining companies with a significant presence in developing energy transition minerals, shows a substantial rise in capital expenditure on critical minerals, spurred by the robust momentum behind clean energy deployment. 
According to the review, the market size of the key energy transition minerals market doubled over the last five years to US$ 320 billion in 2022, following a 30% rise in investments in 2022 and 20% in 2021. — bird story agency

African countries that suffered the worst and longest civil wars are recording the biggest moves in a freedom index, with the continent logging the best growth in a key prosperity score in close to 30 years.

The United States think-tank Atlantic Council shows that Rwanda, Sierra Leone and Ethiopia registered the biggest score changes in a global ranking of free and prosperous countries, from 1995 to 2022.

The Atlantic Council’s Prosperity That Lasts: The 2023 Freedom and Prosperity Indexes focuses on six social indicators of prosperity — income, health, education, environment, minority rights and inequality. 

Of the three, Sierra Leone and Rwanda made the most significant gains in their freedom scores, according to the index.

Sierra Leone ranked 84th globally and increased its freedom rankings by 25 points, while Rwanda ranked 109th and improved its freedom score from 33.4 in 1995 to 53.5 in 2022. 

“Rwanda’s freedom score rose by more than 20 points in the 1995-2022 period, following a civil war in 1994 — the legal and economic freedom components drove most of the increase,” according to the Atlantic Council’s report.

The freedom scores reflect improved robustness in abiding by the rule of law, a more robust institutional framework to elect and hold political leaders to account and increasingly free and competitive markets to run businesses successfully.

All three countries recorded a 20-point increase in their prosperity scores, the largest movements globally over the period under review, according to the index.

“Countries with higher scores in our freedom index also attain higher levels of prosperity. 

“In all regions, countries that are free tend to also be prosperous,” according to the report.

These significant strides underscore the rise from the ashes of these countries that have, in turn, helped Africa record a higher-than-global average improvement in the rate of prosperity.

Africa’s prosperity score grew by 10 points over the review period compared with the global average of 0.4 points a year from 1995 to 2012 and only 0.1 points from 2012 to 2022 because of the effect of the Covid-19 pandemic. 

“Sub-Saharan Africa is the region where prosperity has grown fastest,” said the report’s authors.

Africa’s growing prosperity was buoyed by improvements in environment and health, whose scores rose by 25.7 and 15 points, respectively.

These factors continue to exhibit in these and other countries, highlighting a sustained growth in economic freedoms and positive future prospects for Africa’s growth story.

Ethiopia, for instance, has embarked on economic reforms that promote private sector participation in finance, telecommunications, logistics and manufacturing.

Among key developments in modernising Ethiopia’s heavily state-run economy has been the privatisation of Ethio Telecom, after the licensing of Kenyan operator Safaricom in May 2021. 

In February, the Ethiopian government proposed partial privatisation of Ethio Telecom by selling up to a 45% stake. 

This move has attracted three other foreign operators, France’s Orange, Abu Dhabi-headquartered Etisalat Group and Netherlands’ Veon, which have since expressed interest in the market.

Conversely, Rwanda is firming up its sustainable development journey by placing the circular economy at the core of its decision-making and practice.

In December 2022, the country launched a 14-year Circular Economy Action Plan and Roadmap that will cost $211.2 million to manage waste and adopt clean production technologies.

Rwanda revised its green growth and climate resilience strategy in June this year.

“The revised Green Growth and Climate Resilience Strategy aims to guide national policy and planning in an integrated way, mainstream climate change into all sectors of the economy, and position Rwanda to access international climate funding and investment,” Rwanda’s minister of environment, Jeanne d’Arc Mujawamariya, said in a statement.

Seychelles, which ranked 35th globally, leads Africa as the most free nation, with a freedom score of 79.7, followed by Cape Verde, ranked 40th with a score of 78.8, Mauritius (47) with a score of 74.7, Namibia (51) with a score of 72.9, and Botswana (55) with a score of 72, topping Africa’s freest economies.

In North Africa, Tunisia ranked 93rd globally, with a score of 60.13 and Morocco came in at 92 with a score of 60.36.Only Mauritius and Seychelles reached the index threshold for prosperous countries. Cape Verde made the cut as a fully free country, but it did not reach the category of prosperous nations, according to the Atlantic Council. — bird story agency

For the past two decades, many rural homes in Africa have relied on solar home systems to meet their basic power needs such as a few light bulbs, charging the family’s mobile phones and powering small appliances like radios and televisions. 

Now, larger off-grid systems known as mini-grids (MGs) capable of powering bigger appliances — fridges, flour and maize mills and even welding equipment — are increasingly being installed in rural areas.

“The mini-grid space continues to attract a lot of attention from development partners,” said the Africa Solar Industry Association in its latest analysis. “There are already many MGs in operation, and many more to come.” 

The recent commissioning of more than 60 solar-powered mini-grids in the Kolda region of southern Senegal is just one example. 

The Senegalese Rural Electrification Agency project targets the provision of mini-grids to more than 300 villages by 2024. The mini-grids have the capacity to power street lights, refrigerators, millet and peanut shelling machines and water pumps.

In March, the African Development Bank (AfDB) Group approved a $28.49 million grant to help the Ghanaian government install 35 solar mini-grids to power 400 schools, 200 health centres and 100 community energy service systems.

The AfDB is supporting similar projects in Madagascar, Kenya, Tanzania and Niger through its Climate Investment Funds under its Scaling Up Renewable Energy in Low-Income Countries programme.

Mini-grid initiatives are increasingly being led by private investors. In the Democratic Republic of the Congo, electricity access provider Nuru Sasu has begun courting international investors to help it develop a larger solar mini-grid project with a 35 megawatt peak capacity, targeting a population of 230 000.

Already, the energy firm has received a$1.5 million investment from a consortium of international investors to develop installed capacity of 13.7MW in the country’s three cities of Goma, Kindu and Bunia. 

“Nuru is delighted to have partners like REPP, Proparco and E3 Capital giving us the means to provide life-changing energy access in an extremely challenging environment,” said Nuru’s co-founder and chief executive, Jonathan Shaw.

In January, a Madagascar renewable energy firm, WeLight, received €‎19 million from a consortium of foreign investors, including the multilateral European Investment Bank (EIB), to support a$30 million solar mini-grid project.

The project targets a population of about 250 000 in 120 villages that will see WeLight double its coverage area in the country from eight to 17 regions.

“This project continues the EIB’s longstanding backing of off-grid solar energy in rural Africa, following successful projects in Benin, Chad, the Comoro Islands, Mozambique and Uganda,” said EIB vice-president Ambroise Fayolle in a statement.

To date, WeLight operates 40 villages in Madagascar and Mali, with plans to be present in four African countries by 2023, according to its website. “WeLight aims to replicate this approach on more than 200 new sites by 2023.”

Kenyan financial service firm CrossBoundary Energy Access and France’s Engie Energy Access plan to invest$60 million to reach a population of 150 000 in Nigeria, indicating that investment deals are now also multi-regional.

Also in March, the United Nations Development Programme announced the extension of its African Mini-Grid Programme to Burkina Faso with an investment of €1.6 million towards the development of solar mini-grids over the next four years.

The initiative, already launched in Somalia and Nigeria, targets far-flung areas of 21 African countries.

In February, Kenya announced plans to set up 136 solar mini-grids as part of WorldBank’s$150 million programme.

Kenya’s energy cabinet secretary, Davis Chirchir, said the country has 62 fully operational mini-grids and 28 others still under construction that will help the country achieve universal access to electricity by 2030.

The Rural Electrification Agency of Nigeria also recently announced plans to add 51 hybrid mini-grids following the successful installation of 12 solar-mini grids in rural areas.

In November 2021, Nigerian energy firm HUSK Power announced plans to put up more than 100 solar mini-grids by 2023 and 500 by 2026 in the country.

The World Bank has acknowledged the acceleration of mini-grids and is looking to ensure the trend continues.

The authors of a report, Mini-grids for Half a Billion People: Market Outlook and Handbook for Decision Makers, said: “This is the result of falling costs of key components, the introduction of new digital solutions, a large and expanding cohort of highly capable mini-grid developers and growing economies of scale.” 

Although mini-grids are on track to provide the least power access cost — $0.20 a kilowatt hour by 2030 —  installation needs to be accelerated if all of Africa’s rural areas are to receive electricity.

The World Bank points out that current rates will only see 12 000 new mini-grids installed by 2030, reaching only 46 million people at a cost of$9 billion dollars.

The handbook projects that more than 160 000 mini-grids are needed at the cost of$91 billion, to connect 380 million people in Africa. — bird story agency

The AfCFTA is set to combine Africa’s population of nearly 1.4. billion people and markets with a current combined GDP of more than $3 trillion, into a single market.

About 282km of an electrified standard gauge railway (SGR) line will be built from Uvinza in Tanzania (off the Tabora–Kigoma line), across the international border along Malagarasi River to Musongati and onwards to Gitega, both in Burundi.

“The two governments of Tanzania and Burundi have entered into a bilateral agreement to implement this multinational project as a single project within Tanzania and Burundi territories,” according to the tender document.

The project will be implemented over a period of five years. On completion, it will be Africa’s second cross-border electrified rail after Ethiopia and Djibouti launched the continent’s first fully electric multinational railway line, in 2016.

With a length of 750km, the Ethiopia-Djibouti line from Addis Ababa to the Red Sea port of Djibouti is still the longest of its kind on the continent. The $3.4 billion project received 70% of its funding from China’s Exim Bank.

The tender document for the Tanzania-Burundi line indicates that the governments of Tanzania and Burundi have applied for construction funding from the African Development Bank.

Tanzania has recently begun an aggressive push to modernise its railway infrastructure, revamping its ageing regional rail networks to facilitate cross-border trade.

In December 2022, the East African country finalised a $2.2 billion deal with China that will see a total standard gauge railway network of 2 561km, linking the port city of Dar es Salaam to landlocked countries such as the DRC, Rwanda, Burundi and Uganda.

So far, costs are at  $10.04 billion, with the line poised to create the longest modern rail network in Africa when completed in 2026.

With this investment, Tanzania is looking to vault ahead of regional peers including East Africa’s largest economy, Kenya, by providing the most efficient trade routes in the bloc.

“Upon completion of the SGR, Tanzania will be in a better position to utilise its strategic geographical positioning to facilitate cross-border trade,” Tanzania’s President Samia Suluhu Hassan was quoted by AFP as saying.

Kenya in 2014 entered a tripartite agreement with the governments of Rwanda and Uganda to build a standard gauge railway but the network is yet to cross international borders, marred by criticism of the project not delivering value for money. In November 2022, Uganda pulled out of the deal after terminating its eight-year contract with China Harbour Engineering Company (CHEC) which was to construct a 273km standard gauge railway line from Malaba, on the Kenya border, to Kampala.

Subsequently, Uganda initiated talks with a Turkish firm, Yapi Markezi, to help it raise funds to construct the line, which would give Uganda a direct link to Kenya’s main harbour in Mombasa.

The Turkish firm has ongoing rail projects in Uganda and is also executing part of the standard gauge railway project in Tanzania.

In August 2022, the Tanzanian and Zambian governments resolved to upgrade their 1 160km cross-border railway, Tazara (also known as the Uhuru, or Tanzam Railway), to bolster bilateral ties.

A World Economic Forum Insight report 2023, AfCFTA: A New Era for Global Business and Investment in Africa, projects the world’s largest single market will increase intra-African freight demand by 28%, leading to demand for almost two million trucks, 100 000 rail wagons, 250 aircraft and more than 100 vessels, by 2030.

“Unlocking intra-regional trade will skyrocket the demand for logistics, with more small and medium-sized enterprises needing logistics providers to connect to bigger markets,” according to the report. — bird story agency

In the same month, Europe hosted Africa’s first regional stakeholder space workshop in Pretoria. A similar workshop had been held in Portugal in July, reflecting the extent to which developed countries are projecting a mix of soft power and space-sector capacity across the continent.

Over the last decade, Africa’s interest in space has been growing fast, offering opportunities for existing and new players from within and outside the continent. 

However, Africa needs to develop a far larger pool of local space experts, according to a report on the sector.

“Capability gaps benefit foreign space powers, such as China and Europe,” according to a 2022 EU Global Action on Space Market Report Africa.

Media, analytics and consulting firm Space in Africa projects that the continent’s space market will exceed $10-billion in value by 2024, on the back of rising investment.

Over the last few years, Africa’s space industry has been working with a number of countries paying to send satellites into orbit – including those designed and developed on the continent.

Last year, 10 more African countries ventured into space science and are working on developing their first satellites, according to the Africa Space Industry Annual Report  2021.

By the close of 2021, about 13 African countries had sent satellites into orbit.

The report shows that 125 new satellites have been lined up for development by 2025 – by 23 African countries. Those figures have begun catching the eye of foreign space powers.

China has been on a diplomatic mission ever since launching its space station Tiangong in July. The mission showcases China’s developments in space, highlights its pool of experts and promotes its capacity to help African nations achieve their ambitions.

“This is the first time that a major aerospace power has had direct contact with African youths through ‘space-ground communications’ which will further inspire the young African generation to look up at the stars and devote themselves to science and technology,” said head of China’s mission to the African Union, Hu Changchun.

So far, China’s mission to the African Union, the China Manned Space Agency and the African Union Commission have reached Algeria, Egypt, Ethiopia, Namibia, Nigeria, Senegal, Somalia and South Africa through the astronaut-driven dialogue opportunity. The live events, dubbed “Talk with Taikonauts”, target the youth, considered Africa’s future space science custodians.

China is the largest beneficiary of space partnerships with African nations, enjoying huge commercial deals in building several satellites for countries such as Nigeria, Ethiopia and Sudan.

Last year, Europe unveiled two initiatives with a combined investment value of $29-million to develop the use of satellite technologies in Africa over the next four years.

The Global Monitoring for Environment and Security and the Agency for Aerial Navigation Safety in Africa and Madagascar have both offered to provide navigation services to the continent’s aviation sector, while the EU hopes to crystallise its longstanding cooperation with Africa.

European countries are now looking to move beyond their numerous funding and assistance initiatives – mostly at public and academic level – to grow their share of commercial activities in a variety of African tech spaces.

“The market opportunities with the highest potential are expected to be in agriculture, emergency response, transportation and infrastructure monitoring,” the EU advised its investors in its space market report.

These are key areas for Africa’s space policies, with the focus on Earth observation, satellite communication, navigation and exploration.

Those sentiments were shared in a report in the World Economic Forum’s Digital Earth Africa Report, called “Unlocking the potential of Earth observation to address Africa’s critical challenges”, which calls on African countries to leverage new-found satellite capacity to improve data collection and spur development.

Some of the challenges the continent faces include access to drinking water, rapid urban development, active deforestation and food insecurity, according to the report.

In 2021, African governments increased space sector expenditure by 9%, to $548.6-million. The figure was a 94% rise from the $283.12-million spent in 2018.

South Africa, the most advanced space market in Africa, had the highest national budget – at $154-million – followed by Nigeria at $68-million and Angola at $24-million.

Ghana, Ethiopia, Kenya and Gabon all also have sizeable budgets for space technology.

**bird story agency**

Zanzibar is eyeing rising investor interest in Africa’s business-to-business (B2B) e-commerce start-ups to attract funding and tech talent to build its profile as an island tech hub.

It has picked Wasoko, a B2B e-commerce platform that connects informal retailers to manufacturers of consumer goods previously headquartered in Kenya, as its first anchor company and official “private ambassador”.

The semi-autonomous group of islands off the coast of Tanzania does not feature in global startup ecosystem rankings but the move by its government is seen as deliberate positioning to make “Silicon Zanzibar” Africa’s next destination for talent and innovation. 

The region’s leadership says it will work with entrepreneurs to ensure that the environment is conducive to tech startups.

“We are excited to officially partner with Wasoko and other tech companies coming to Zanzibar to co-create policies and initiatives that will transform Zanzibar into a leading tech centre for the African continent,” said Zanzibar’s minister of investment and economic development, Mudrick Soraga.

Soraga said the government will streamline the issuance of work visas to skilled tech workers and provide an open and enabling environment for all tech companies to operate in this world-renowned tourism destination.

Tanzania’s largest city and financial hub, Dar es Salaam, features in StartupBlink’s global ranking of 1 000 cities at position 583 after improving its ranks by 141 places over the past year alone. In East Africa, the city is ranked sixth.

Africa’s first unicorn? 

The Financial Times named Wasoko Africa’s fastest growing company in May, after a $125-million -fundraising in March — the largest venture fundraising for a non-fintech startup on the continent. The startup is now valued at $652-million, inching closer to becoming East Africa’s first “unicorn” with a billion-dollar valuation.

The development of Wasoko’s Innovation Hub on Zanzibar is expected to drive more funding to the area, a nascent market as investors pile into African startups that leverage digital platforms to make it easier for informal retailers to access goods from distributors and suppliers.

“As a Pan-African tech company, Wasoko has been looking for a location where we can bring together the best talent from across the continent and beyond to innovate and develop new products and services for our customers,” said chief executive and founder at Wasoko, Daniel Yu.

The Economist Intelligence Unit estimates that Africa’s annual retail spend is worth more than $1.4-trillion with that figure expected to rise to $2.5-trillion by 2030. Yet, 90% of these sales are driven by informal retail channels such as kiosks and street hawkers, according to PwC.

Just 10 countries were responsible for 94% of all online businesses in Africa in 2019, as documented by the International Trade Centre (ITC) in its 2020 report titled Mapping e-Marketplaces in Africa, highlighting a vast, untapped e-commerce potential.

Over the last one year, there has been significant fundraising by B2B e-commerce startups looking to plug this hole and tap opportunities.

Apart from Wasoko, Kenya’s MarketForce and Twiga, along with Nigeria’s TradePort, Alerzo and Omnibiz are among B2B platforms that have driven fundraising into e-commerce startups to more than $400-million since July last year. More than three-quarters of this venture capital went to startups in Kenya and Nigeria.

In December 2021, Nigeria’s TradePort, with a presence in South Africa and Ghana, raised $110-million and is looking to expand to other African countries.

MarketForce raised $40-million in Series A funding early in February, to expand services across East and West African markets. Market Force has a presence in Tanzania, Uganda, Rwanda and Nigeria.
Data by Statista shows that global retail e-commerce sales will rise from $4.9-trillion in 2021 to about $7.4-trillion by 2025. Zanzibar hopes to become the regional centre for nascent tech solutions tapping into this huge opportunity. — bird story agency

Africans are upgrading their smartphones to 5G faster than the rate at which their home countries are developing and rolling out network infrastructure to support high-speed internet.

The number of 5G devices shipped into the market rose significantly in the second quarter of 2022 as vendors intensified their battle to grow market share in the world’s biggest young and tech-savvy market.

US-based tech-research firm International Data Corporation (IDC) says competition among handset-makers to bring to market the most advanced, but affordable, models is fuelling adoption.

“Shipments of 5G devices increased 26.9% in Q2 2022 and their share of the overall market is growing as major brands launch more flagship 5G devices into the market,” said IDC senior research analyst, George Mbuthia.

The demand for 5G over the period significantly outpaced the overall growth of smartphone shipments into Africa – which fell 7.9% quarter-on-quarter due to gloomy economic prospects, rising inflation and component shortages across the market.  

That means 5G shipments ate into the market share of 4G and 3G-enabled devices, with the latest smartphones giving users the ability to upgrade to a higher-speed network, when it becomes available.

Falling smartphone prices, especially in mid-range devices – between $200 (R3 500) and $450 – is also offering a big window for rising adoption of some high-end, 5G-powered devices.

Devices in this range recorded the biggest fall in average prices, at 22.3%, as imports of entry-level smartphones priced at less than $200 dropped by 6%.

Chinese vendors are the key drivers behind the falling prices, with Transsion brands – Tecno, Itel and Infinix – controlling 48% of the shipments. Samsung is placed second, at 25%, while another Chinese brand, Xiaomi, takes the third slot with 6.6%.

Chinese brand Realme announced in Kenya that it is to increase its research and development budget by 58% to make advanced smartphone models with designs that appeal to young customers.

“This means you can expect even more exceptional Number Series phones moving forward, as our Number Series is our essential product line, packing essential tech into a stylish package with an accessible price tag,” said Realme chief executive Sky Li.

Similarly, the handset-maker has embarked on a “market cultivation” strategy to grow shipments to 1 million for each of its 15 core markets.

According to IDC, 4G devices make up 73.9% of all smartphone shipments to Africa, followed by 3G (18.5%) and 5G (7.6%), with the latter projected to gain a significant market share as more countries begin to roll out network infrastructure to support this technology.

“The 5G segment includes foldable smartphones, although adoption of this new technology has been slow due to the high prices of these devices. The slow pace of 5G network infrastructure development across Africa has not slowed adoption, since 5G devices can also be used on the more readily available 4G networks,” said Mbuthia.

So far, South Africa, Seychelles, Botswana, Ethiopia, Tanzania, Nigeria and Zimbabwe have rolled out commercial 5G services over the last two years. South Africa was a frontrunner, having launched the services during the Covid-19 pandemic to support demand for work and learn from home arrangements.

Botswana, Ethiopia and Zimbabwe telecoms went commercial this year and are planning to expand coverage to more sites in their markets. 

Tanzania and Nigeria are the latest to officially roll out 5G on the continent, after MTN Nigeria began test runs in six states in late August and Vodacom Tanzania launched the 5G service in Dar es Salaam on 1 September.

Other markets are at different stages of development, with many remaining at the testing and planning stages due to delays in spectrum and licence issuance to telcos. 

Kenya’s largest telco, Safaricom, has been testing 5G in four towns since March 2021, with plans for an official roll-out this year.

The country’s telecoms regulator, the Communications Authority of Kenya, announced in February plans to roll out the technology on a pilot basis in 2022. In June, it signed a five-year partnership with China’s tech giant Huawei to build a 5G network across the country.

In July, MTN Ghana indefinitely postponed its commercial roll-out for this year, after pilot plans failed to materialise. New dates remain elusive.

“Since I promised once and failed, I don’t want to make another promise until we are absolutely sure,” MTN Ghana managing director Selorm Adadevoh told the media.

South Africa (16.6%), Nigeria (13.8%), and Kenya (7.7%) hold Africa’s top three smartphone market slots by unit share, according to IDC.

**bird story agency**

Over the next three years, Africa’s fintech industry is projected to hit record-breaking revenues for startups in the financial sector and herald a new growth phase characterised by more advanced financial services.

The latest McKinsey report shows revenue generated by fintech startups are set to grow eight times to $30-billion by 2025, as Africans find digital finance solutions more convenient — and cheaper — when seeking credit, making purchases, settling bills and managing expenses, than traditional financial services.

At a maximum average penetration rate of 5% in 2020 — excluding South Africa — the report estimated that some African fintechs would be generating revenue of about $4-billion to $6-billion per annum by 2025 — in line with global market leaders.

“With digital becoming a way of life in Africa, the stage is set for the next phase of fintech growth,” says the report, titled Fintech In Africa: The End of the Beginning.

Fintech markets in Ghana and French-speaking West African countries are predicted to grow even faster than two of the continent’s biggest startup ecosystems, Nigeria and Egypt. Ghana’s annual fintech growth rate is the fastest, at 15%, followed by Cameroon, Côte d’Ivoire and Senegal. Nigeria and Egypt are tied, with growth rates of 12%.

Growth opportunities are also anticipated in Kenya, Morocco, Tanzania, Uganda and South Africa. The latter accounts for 40% of all fintech revenue in Africa. These 11 markets account for 70% of Africa’s GDP and half its population.

Mature fintech markets, such as South Africa and Nigeria, will begin moving from offering wallets, payments and distribution to offering advanced services to support the liquidity and regulatory aspects of business-to-business transactions.

Compliance services for mature markets 

The report lists anti-money laundering and know-your-customer compliance as among new services that will begin dominating more mature markets with more complex financial systems and digital infrastructure. For growing ecosystems, there will be a rise in offerings such as buy-now-pay-later, services for SMEs and insuretech offerings.

However, the road to sustainability in this sector is not easy. The report says, with varying levels of maturity in these markets, startups are bound to face key challenges to growth.

Markets with weak mobile and internet penetration, lack of identification coverage, limited payment rails and low incomes will make it hard for startups to reach scale and build profitable business models.

Businesses will also have to navigate an uncertain regulatory environment where different markets are at different stages of developing fintech regulation — presenting complexities that can make business continuity and compliances difficult.

A rise in competition for growth funds, the report shows, is also bringing in a tough operating matrix. There is a slowdown in funding for later-stage startups on the back of reduced levels of venture investment globally and as more early-stage startups begin to disrupt the market. 

Currently, 70% of fintech startup deals are financed by foreign investors — mostly from North America — with locally financed deals concentrating on early-stage startups.

“This suggests that African fintechs will likely have to tighten their belts to adjust to a new venture-funding reality,” said the report.

CB Insights State of Venture Report Q2 2022 shows global venture funding fell by 23% to $108.5-billion in the second quarter of this year. This is the largest quarterly percentage drop in close to a decade. However, in value terms, it was still the sixth-largest quarter for funding on record.

Key foreign investor regions such as the US (25%), Asia (25%) and Europe (13%) recorded drops in venture funding. However, growth prospects, coupled with the fundraising upswing recorded on the continent since last year, could be enough to deliver more African unicorns.

“Despite all the activity seen on the continent, Africa has only produced a handful of unicorns and the profitability of many ventures is precarious … With the right incentives and support, the next marvel of African unicorns is just waiting to emerge,” said the McKinsey report. 

Africa’s decacorn 

To date, only one unicorn — KuCoin, a Seychelles-based crypto exchange that raised billions of dollars from foreign investors, pushing up its valuation to $10-billion (making it a “decacorn”) — has been delivered on the continent this year.

In February, Wasoko came closer to growing into a unicorn after raising $125-million from international investors, pushing up the company’s valuation to $625-million.

Fintech founders have also been challenged to develop an ambitious strategy to attract, develop and retain the very best talent amid high competition in and out of the market.

In addition, to build a strong, positive organisational culture that provides stability, clarity and direction, fintech companies on the continent will need to strengthen their corporate governance foundations, according to the report.