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African Business 2021

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The 2021 edition of African Business is the second issue of this useful guide to business and investment on the continent. The positive reception accorded the inaugural edition in 2020 was encouraging and we are optimistic that this publication and future issues will continue to meet the need for timely and relevant information in an exciting time for African business. African Business 2021 has articles on recent trends plus overviews of the key economic sectors on the continent and regional and country profiles. There is an in-depth analysis of the implications for trade on the continent of the introduction of the African Continental Free Trade Area agreement (AfCFTA) and an article on the growth and importance of exploration for minerals, gas and oil. Namibia and Botswana feature in an article on how cooperation can drive economic growth and an opinion piece focusses on the role that digital technology can play not only in the financial sector, but in the driving progress in a broader sense. Global African Network is a proudly African company which has been producing region-specific business and investment guides since 2004, including South African Business and Nigerian Business, in addition to its online investment promotion platform:

OVERVIEW Information and

OVERVIEW Information and Communications Technology Entrepreneurs are using technology to overcome hurdles. SECTOR INSIGHT Telecoms operators spend -billion in Africa annually. RxAll, a Nigerian online health company, is part of a programme run by Founders Factory Africa. Combine a lively imagination, youthful ambition and some encouragement (or funding) and Africa’s entrepreneurs will tackle the continent’s problems – with the latest technology. Helping Nigerian factories in the food sector get access to quality raw materials quickly and efficiently via the latest technology was the central idea behind the Releaf Group venture. MAX (Metro Africa Xpress) turned the problem of a poor public transport system into an opportunity by creating an Uber-like motorcycle-taxi company in Lagos. What these successful ventures share is membership of the Harambe Entrepreneur Alliance, a group of more than 300 African innovators who have been working since 2008 to develop scalable businesses. Mentoring and sharing is part of the plan, as is raising capital. Since it began, members of the alliance (“Harambeans”) have generated over 3 000 jobs and raised more than 0-million from Google Ventures, the Chan Zuckerberg Initiative and Alibaba. Andela (which builds and manages engineering teams) and Yoco (payment card machines) are tech businesses that began in the Harambe stable. The Harambeans Prosperity Fund has allocated -million to provide low-interest loans and equity investments to businesses in the post-Covid environment which have sound business models, proven traction and demonstrated adaptability. The fund will make capital available to entrepreneurs who have repositioned their ventures, or had proven business models prior to the pandemic, and are likely to thrive in the new norm but are unable to access capital markets. Founders Factory Africa is supporting tech startups across Africa. The plan is to assist with the launch of 140 small businesses between 2019 and 2025. Standard Bank, which has a presence in 22 African countries, has invested in Founders Factory Africa and may be able to help individual entrepreneurs expand their businesses through local knowledge and access to markets. The Overseas Private Investment Corporation, a selfsustaining US government agency, has a three-year plan (Connect Africa) to invest -billion in projects that include telecommunications and Internet access. AFRICAN BUSINESS 2021 44

OVERVIEW Satellites are a critical part of the telecommunications network of Africa. Content and data providers typically use satellite services where no fibre network is available. SES Africa has a fleet of satellites that orbit four times closer to earth than other models. Vodacom Business Nigeria is partnering with Intelsat to offer more to its customers in the enterprise and Internet of Things sectors. Several African countries are participating in the Square Kilometre Array (SKA) radio telescope project. Based in South Africa, SKA’s Africa programme will see the creation of the AVN (the African very-long baseline interferometry (VLBI) network). The other participating countries are Botswana, Ghana, Kenya, Madagascar, Mauritius, Mozambique and Zambia. Telecoms A figure of -billion is invested by the continent’s telecoms operators, according to one of the biggest, MTN. A lack of spectrum is the only constraint on even more being invested into a sector with huge growth potential. Several countries’ overall GDP growth has been boosted by the telecommunications sector: Benin (10.6%) and Gabon (18%) are examples and Ethiopia is expected to see a spike when parts of its telecommunications network are privatised. GSMA expects mobile phone and data usage to grow in Africa at a compound rate of 4.5% to 2024. In 2018 there were 456-million mobile phone subscribers Tanzania has 6.4-million users of the M-Pesa mobile phone payment system. Senegal expects to achieve a 95.3% mobile phone penetration rate in 2021. The high price of data in most African countries is a serious obstacle to the development and deepening of the sector. The number of broadband connections in Africa crossed the 400-million mark in 2018 (which was nearly 20 times more than in 2010) but the regional average broadband penetration was ONLINE RESOURCES Connect Africa: Founders Factory Africa: Harambe Entrepreneur Alliance: Research ICT Africa: Smart Africa: only 25%. Mobile broadband coverage in Africa is still at 70% of the population. Key areas for investment are infrastructure, digital transformation (including digital platforms and services), digital skills and cybersecurity. Other key factors are the development of a common digital market and aligned policies and regulations. Smart Africa is an initiative backed by all the leaders of the AU to promote and expand the telecommunications potential of the continent. Examples of projects under the Smart Africa banner are data centres (Djibouti), innovation and entrepreneurship programmes (Egypt), e-payments (Ghana), cybersecurity (Ivory Coast) and smart energy and the blue economy (Togo). A Kenyan company has found a way to offer WiFi for free. BRCK has 700 000 active unique visitors per month and operates out of 2 700 sites in East Africa. It has its own operating system, Moja, and is robust enough to be installed in taxis. In reporting on the introduction of BRCK to South Africa, TimesLive quoted World Wide Worx MD Arthur Goldstuck saying, “Between 25% and 33% of SA smartphone owners don’t use cellular data with their devices because they can’t afford to.” ■ 45 AFRICAN BUSINESS 2021

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