Key trade and investment trends in Africa
Interested in the key trade and investment trends in Africa?
Africa has a massive domestic market with significant long-term opportunities for worldwide investors. However, this wasn’t always the case.
According to The Economist in 2000, Africa was considered a hopeless continent that didn’t present any financial incentive to global investors.
However, in 2013, Africa showed significant economic growth. Moreover, the continent’s GDP (gross domestic product) is expected to grow by an average of over 6% between 2013–2023. In particular, West Africa, East Africa, Central Africa, and Southern Africa are expected to reach a combined GDP of $29 trillion by 2050.
Additionally, trade in Africa has grown by 300% in recent years, beating global averages of 196%. As a result, the flow of FDI (foreign direct investment) to the continent has experienced a significant improvement over the last decade.
This blog post will cover the African economic outlook and trends to expect in 2022.
Technology, media, and telecommunications (TMT)
The introduction of 5G to Africa will lead to positive transformations for the manufacturing, health, transport, and utility sectors.
- Doctors will practice and give medical advice remotely thanks to 5G connectivity. Surgeons will also perform surgeries remotely by using robotics and other tools.
- Mines can use automated vehicles and machinery to boost efficiency and personnel safety.
- The agricultural sector can take advantage of wireless sensors. Farmers can use these tools to monitor crop conditions and track livestock.
On the downside, not many African countries have access to 5G. As a result, the continent will need to focus on the efficient and accessible rollout of 5G in the coming years and promote affordable data services and smart devices for Africans.
Africa’s fintech ecosystem has continued to grow despite the impact of the pandemic. The continent has seen a growth in access to smartphones and internet connectivity, which has resulted in the development of Africa’s global banking and payment platforms.
In fact, over 50% of the world’s mobile money customers are now based in Africa.
Africa has also invested in digital currency. The Central Bank of Nigeria is the second central bank to create a Central Bank Digital Currency (CBDC) – the eNaira. Launched in October 2021, the eNaira aims to improve access to bank money, boost financial inclusion and accessibility, and reduce the costs of processing cash and cross-border payments.
Moreover, South Africa launched its first cryptocurrency back in 2018. SAFCOIN went global in September 2021 and reached a value of US$105.6 billion between June 2020 and June 2021.
Data privacy and security
The COVID-19 pandemic has shown the African continent and its people how valuable personal data is while also showcasing its vulnerability to abuse and attack. As a result, South African President Cyril Ramaphosa signed the Cybercrimes and Cybersecurity Act (Act) in early June 2021. Now, the continent’s cybersecurity regulations are in line with global standards.
The Act compels electronic communications service providers and financial institutions to protect African citizens’ digital privacy and security rights and freedoms.
Additionally, on July 1st, 2021, President Cyril Ramaphosa also signed the Protection of Personal Information Act (POPIA). The legislation protects the personal information of South African citizens and regulates the use of such data.
Perhaps the continent will continue to take significant steps to implement laws and regulations to further protect its citizens’ data and personal information.
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