Nine African business trends: Copper the new oil, Uber-style tracking, and medical tourism

How We Made It In Africa

Some of the forces impacting countries and industries in Africa include the growing demand for African commodities to fuel the global green economy, the retreat of South African retail giants from the west and east Africa, as well as young people embracing business opportunities in agriculture. Here is a selection of emerging African business and economic trends that came across our desk over the past year.

1. Copper is the new oil: green economy could be a boon for Africa’s copper producers

A recent research note from Goldman Sachs asserts that copper – found in several Africa countries – could be among the envisaged green economy’s most significant beneficiaries. It appears decarbonisation of global energy production will be nigh impossible without this commodity.

The achievement of global green energy ambitions will require a move from a system based on oil and gas to one dependent on sustainable, renewable sources of energy such as wind, solar and geothermal. Goldman Sachs contends this is where copper will come into its own. “As the most cost-effective conductive material, copper sits at the heart of capturing, storing and transporting these new sources of energy. In fact, discussions of peak oil demand overlook the fact that without a surge in the use of copper and other key metals, the substitution of renewables for oil will not happen,” it states.

Should Africa’s copper-producing regions succeed in quickly bringing new greenfield projects online – or upping output at existing operations – the obvious boost to commodity export revenue could be accompanied by welcome gains downstream. Following a well-trodden boom-town trajectory, businesses related to or nearby mining operations could leverage off a new copper renaissance. Roads will have to be built, supermarkets upgraded, accommodation constructed and healthcare services established, extending the opportunities of an increase in copper demand beyond merely the mining companies. Read more.

2. Young people embracing money-making opportunities in farming

When 36-year-old Baldwin Mazango started farming in 2012 in Mazowe, Zimbabwe, he had land on which he could plant just 22 potato seed lines, each 15 m long … something he now jokes about to friends. But through hard work and sheer determination, Mazango managed to expand his potato farm from that tiny piece of land to more than 10 hectares. Today, his 55 tonnes of potatoes per hectare – against a US average yield of under 50 tonnes – is a local record and also the first generation of a locally produced, virus-free variety.

Mazango is one of many new young farmers in the country who recognise the opportunity for financial freedom that farming offers. He is just one of more than 6,000 young farmers connected through various digital farming platforms in Zimbabwe alone. Through online campaigns, these digitally connected young farmers are motivating other young Africans to take up farming instead of hard-to-find office jobs. Read more.

3. South African retailers retreat from east and west Africa

The recent announcement that South African retail company Massmart was selling off its once-prized Game stores in five African countries rang alarm bells about the future of the consumer opportunity in Africa.

For over a decade, a consumer boom has been driven by demographics, the growth of the middle class in Africa, high growth in a dozen or so countries, increasing demand for quality goods and products, and a taste for more modern shopping environments. However, this past year, there has been a retreat of South Africa’s biggest retailers from many African markets. Shoprite announced last year it would sell its 25 stores in Nigeria and later revealed it would also shed its outlets in Uganda, Kenya and Madagascar. Mr Price closed its last store in Nigeria in early 2021 and, in August this year, Tiger Brands announced it was selling its 49% stake in UAC Foods, one of Nigeria’s biggest consumer companies. Read more.

4. Uber-style trucking businesses are changing long-haul transport in Africa

While an increased number of trucks are criss-crossing the continent, once they deliver the goods, many travel back empty. A better co-ordinated network could deliver greater efficiency, faster transit times and lower cargo costs.

Start-ups like Kenya-based Lori Systems, Kobo360 in Nigeria, and several others are stepping in to fill the gap, with the backing of international investors. Launched in 2018 in Nigeria, Kobo360, presents itself as a technology firm aimed at achieving efficiency: a “company that aggregates end-to-end haulage operations to help cargo owners, truck owners, drivers and cargo recipients to achieve an efficient supply chain framework.” Read more.

5. Africa’s data centre market poised for massive growth

Africa is poised for a data centre boom as internet penetration rates rise and the continent plays catch-up with other regions. Africa accounts for less than 1% of the world’s co-location data centre supply, with South Africa making up the bulk of the continent’s capacity. Co-location facilities lease space, power and cooling to enterprise and hyper-scale customers. They also offer interconnection, enabling businesses to scale at low complexity and cost. Customers in Africa are increasingly using data centres to access public cloud-based services from hosts like Amazon Web Services (AWS), Microsoft and others.

To meet surging demand, data centre facilities are being developed by telecommunications groups, enterprises, governments, cloud and co-location service providers including Teraco and Africa Data Centres. Hyperscale and internet cloud players, such as Amazon Web Services have also recently established local data centres. Read more.

6. Start-ups tapping into Africa’s healthcare supply chain opportunities

In the midst of the Covid-19 pandemic, the need for innovative, cost-effective, robust, technology-enabled systems to deliver health products and information has never been more clear. Across Africa, supply chain constraints result in critical bottlenecks in the movement of essential medicines from manufacturer to end-user. Leveraging technology to ease this flow holds tremendous promise.

Start-ups across the continent are developing innovative, commercial models to transform health product distribution for consumers and providers alike. Read more.

7. Kenya becomes the new frontier for start-up investment in Africa

When you think of Kenya, you’re not likely to think of the country’s startup ecosystem. You’re much more likely to think about the country’s success in long-distance running or the country’s beautiful wildlife reserves. The COVID-19 pandemic has had a huge impact on the country, but there are still examples of Kenyan startups that are defying the norm and are succeeding. They are growing fast and are managing to achieve investment In this article, we’ll be going over the top Kenyan startups to watch in 2021.

Despite the aforementioned difficulties, the Kenyan startup ecosystem is one of the best in Africa. Startups in the country have managed to raise a collective total of 21 Billion Kenyan Shillings in 2020. This is the equivalent of $222,428,172. The economy in the country is expected to grow by 5% in 2021 and 5.9% in 2022.

8. Green is the new yellow as more African taxis turn electric

Electric cars and shared mobility concepts are starting to disrupt Africa’s taxi industry. Just a few years after cab-hailing apps upended the market and made city transportation cheaper and safer, they’re now about to get greener.

Nopea Ride, Kenya’s electric taxi fleet service, recently opened a new EV charging hub at Village Market in the capital Nairobi, underpinning the growing demand for electric mobility in the East African state. In January, the Finnish electric cab firm announced it planned to triple its fleet in Nairobi, helping reduce emissions from the populous city’s notorious traffic. EkoRent, the parent company of Nopea, is planning to have about 1,500 EVs in its ecosystem by the end of 2021. Read more.

9. Regional medical tourism set to grow in Africa

One unintended consequence of Covid-19? A rush of investments into research and medical facilities across the continent will see overseas-bound medical tourists staying local as regional centres of excellence abound.

Fewer trips to India and other ‘medical tourism’ destinations by Africa’s middle class is one anticipated result of a surge of investment into medical facilities, according to a recent report, which highlights the opportunity for these facilities to mint money treating lifestyle diseases as Africa’s middle class rapidly expands.

Africa’s own regional medical tourism destinations are increasing beyond South Africa, Morocco, Egypt and Tunisia – which currently have the most advanced medical facilities on the continent – according to Research and Market’s Medical Tourism 2022: African potential. Read more.

10. The rise of the African super app

Until very recently, planning a wedding or co-ordinating a sightseeing outing with family and friends in Africa required that the organiser juggle mobile apps to make arrangements.

The announcements and logistics would require an app like WhatsApp; fundraising activities might take place on a money platform like M-Pesa; while transport to venues would be arranged through a hailing app such as Uber or Bolt. According to a new report, all of these activities are now combined on African super apps, which conveniently combine pay, commerce, mobility and communication applications on one platform