InvestAfrica Media April May

Invest
APRIL/MAY EDITION MAGAZINE £3
The state of play:

FDI in Africa
Financing Digital Infrastructure

Investors Guide to West Africa
Al Improving Mental Health Therapy
Agribusiness Trends
Technology Investment Area
15 HOW TO FINANCE
DIGITAL INFRASTRUCTURE
2022 GLOBAL
STRATEGY OUTLOOK
19
CONTENT
22 GLOBAL FDI PROSPECTS
FOR 2021–2022
GLOBAL DISRUPTION
IS BOOSTING AFRICA'S
CREATIVE INDUSTRIES
24
FIVE AFRICAN COUNTRIES

25 FOR INVESTORS TO
WATCH IN 2022
AGRIBUSINESS -
TRENDS TO LOOK 27
OUT FOR IN 2022
TEN TECHNOLOGY
29 INVESTMENT AREAS
TO WATCH IN 2022
AN INVESTOR'S GUIDE
TO WEST AFRICA
32
36 SIX REASONS TO
INVEST IN AFRICA
FINTECH- CAUGHT BETWEEN

BANKS AND ONLINE SHOPPING: 40
2022 PREDICTIONS
50 FDI FORECASTS AND

TRENDS TO WATCH IN 2022
WAYS ARTIFICIAL INTELLIGENCE

IS IMPROVING MENTAL 52
HEALTH THERAPY
investAfrica Magazine 1
FROM THE
EDITOR-IN-CHIEF
investment (FDI) for the first time ever.
Technology has matured and the rise of ESG
finance shifted massive pools of capital towards
green energy and cleantech.
New winners have emerged. Texas has
The United Nations Conference on Trade and become a beacon for both wind and solar power
Development (UNCTAD), has in its recent projects, while Egypt and Morocco had their
findings predicted that Foreign Direct investment plummeted accordingly, while the
Investment (FDI) in Africa will plunge from $45 recent global chip shortage is rather due to a
billion in 2019 to between $25 billion and $35 booming demand than some flaw in the
billion in 2020, with a recovery not expected semiconductor value chain, regardless of its
until 2022. geography, there is just not enough production
There will be investment. But where? capacity in the system at the moment. Besides,
The big question mark concerns the more regional supply chains have not
geographical distribution of this new necessarily led to more resilience in the system.
investment. Despite much talk and arguing, With arguable economics, the case for more
global supply chains have withstood the Covid- regional, or like-to-like trade and investment, is
first and foremost a political one.
19 storm ,shortages were rare and often .Covid-
After two decades of heavy globalisation,
19 has deeply shocked the world economy and
'the triad' is back as the US, the EU and the Asia-
global investment plummeted accordingly.
Pacific region entrench and strengthen their own
The previous year revealed the many regional blocs. Tighter screening of foreign
different nuances of this main narrative, and investment has now become the norm, and
provides valuable guidance for the years to global powerhouses of the likes of Germany are
come. Paradigm shift has become the name of incorporating principles of technological
the game and disruption will drive new sovereignty in their industrial policies. A divide
investment, as well as disinvestment, in the near between developed and developing economies
future. Report suggests that the pandemic let the has emerged already. As much as 60% of global
genie of the digital economy out of the bottle investment projects originated and stayed
once for all. Tech providers, whose market within OECD countries in 2021, thus
dominance appears threatened only by looming crystallising a trend that started at the beginning
antitrust regulations, are seizing the moment and of the global financial crisis in 2008, when intra-
building data centers and cloud infrastructure at OECD investment made up 41.6% of global
unprecedented pace, empowering a new wave of investment.
developers and researchers. This new, polarised world risks rewiring
The booming demand of digital global investment flows in the years to come.
infrastructure and services has led to a severe The investment promotion industry has two
shortage of chips in the market, prompting options: either to comply and uphold barriers to
producers of the likes of TSMC, Samsung and global trade and investment; or else work around
Intel to pour billions of dollars into new politics and facilitate cross-border investment to
production capacity. Mass deployment of 5G bring barriers down.
infrastructure looms further down the line.
Renewable energy is also fulfilling its Kunle Aderemi
potential, The sector has dethroned oil and gas as
the biggest recipient of foreign direct
EDITORIAL BOARD
Publisher/ Editor-In-Chief – Kunle Aderemi
Managing Editor – Augustina Ntow Brisaa
Sub Editor/ Proof Reader – Tatenda Cornelius
Staff Writers – Mq Khumalo, Bongiwe Tutu,
Alfred Soroh, Albert Smith,
Emmanuela Odiachi
Research – Kemi Alonge, Frank Edima
Special Projects – Prisca Kyei-Sakyi
Photography – Reynolds Qarshie
Design & Production – AOD CONCEPTS
Correspondence
InvestAfrica Media Ltd
The Square,
112-114, Broad Street
Birmingham, UK. B15 1AS
+44 7508036835, +234 960008114
kunle@investafricamedia.co.uk
The state of play: FDI in Africa – Kunle Aderemi
F
DI in Nigeria was declining even trajectory, steadily growing from 36 projects
before the Covid-19 pandemic, and worth $4.8bn in 2017 to reach 76 projects
worth $10.2bn.
continues to remain weighted Dampened global demand for commodities
towards the oil and gas sector. is a major headwind facing Nigeria, a
Nigeria attracted the third-largest commodity export-based economy.
foreign direct investment (FDI) inflows of Depressed oil prices and the Covid-19 crisis
any African country in 2019, but, as with the in 2020 are continuing impediments to
continent more broadly, it suffered a sharp inward investment.
Investment diversification is a long-
yearly decline in inward investment.
term objective for Nigeria, with a decline in
Data from the United Nations Conference on oil and gas investment in 2019 the main
Trade and Development (UNCTAD) shows reason why inward FDI has almost halved
Nigeria received $3.3bn of FDI inflows in from $6.4bn in 2018. The total value of FDI
2019, a yearly decline of 48.5%. Only Egypt flows had previously been rising each year
($9bn) and the Democratic Republic of the since 2015.
Congo ($3.4bn) received more inward FDI Nigeria increased the government's
during a year that saw FDI inflows across the share of profits from oil activities conducted
whole African continent fall 10.3% to under production-sharing contracts, which
$45.4bn. may act as a further deterrent to investment in
Though FDI inflows in Nigeria this sector.
declined in 2019, FDI stock has grown over A new $600m integrated steel plant in
the past three years to reach $98.6bn in 2019. Kaduna State, has been hailed as the largest
The number and value of greenfield ever non-oil-related foreign investment in
investments have been on a similar Nigeria, and is a positive sign for economic
investAfrica Magazine diversification. 5
$
600m integrated steel plant in corruption continue to be concerns for
Kaduna state wider economic potential investors into Nigeria. While
conditions are likely to limit FDI the country rose 15 places in the World
into Nigeria, however. UNCTAD
Bank's 'Doing Business 2020' report, it
expects the downward revisions on
earnings for multinational enterprises still only ranked 131st out of 190
(MNEs) in 2020 to have a tangible countries globally.
impact on investment flows into So, while progress has been made,
Africa. Reinvested earnings of MNEs NIPC still has much work to do to
account for 26% of FDI in Nigeria. attract a greater volume and greater
The Nigerian Investment variety of investment into Nigeria.
Promotion Commission (NIPC) The country fell into a recession
recorded 92 investment project
in 2016, largely due to low petroleum
announcements in 2020, with a value
of $90.9bn. 33% of this value is prices and terrorist attacks on
accounted for by domestic rather than pipelines in the Niger Delta. It
foreign investors. returned to growth in 2018 but
recovery has been largely dependent
Total investment in 2020 was on oil prices. The government has
well spread across the country, repeatedly stated plans to invest in
according to NIPC, whereas foreign
infrastructure projects to diversify its
investment was predominately
focused in the Federal Capital oil-dependent economy.
Territory (FCT), which includes Nigeria's GDP dropped by 3.5%
capital city Abuja. FCT accounted for between 2019 and 2020, with Covid-
21% of the total value of investment 19 having a significant impact on the
projects in Nigeria, but 49.1% of all extractive sector. Unemployment and
foreign capital inflows. inflation rates that were already on the
A number of reforms have been rise pre-pandemic rose sharply in
introduced in recent years to improve
2020. As a result, the World Bank has
the ease of doing business in Nigeria.
These measures include simplifying warned that, without substantial
the process for starting a business, reforms, the pandemic could send
reducing the cost of construction personal incomes back by four
permits and launching an e-payment decades. According to the National
system for import and export fees in Bureau of Statistics, GDP grew by 5%
the cities of both Kano and Lagos. in the second quarter of 2021 but may
NIPC, which was established in not be enough to make a meaningful
1995 to promote and support inward impact as it is barely equal to the
investment, acknowledges political country's population growth rate.
instability, weak security and
C
ape Verde has the highest GDP per
capita of all West African countries at
$3,064 in 2020. The island nation has
been a stable democracy since the early 1990s
and remains one of Africa's most developed
and democratic countries.
Nana Addo Dankwa Akufo-Addo,
The President of the Republic of Ghana
G
hana had the second-largest
GDP in West Africa in 2020.
Efforts have also been made to
diversify the economy into sectors such
as digital technology goods, automotive
and ship construction as well as
hydrocarbons and industrial minerals.
Although rich in natural resources such
as cocoa, Ghana isn't dependent on one
commodity. In addition, Ghana became
José Ulisses de Pina Correia e Silva, the fastest-growing economy in the
Prime Minister of Cape Verde world in 2011 due to a GDP rebasement.
Despite few natural resources, Cape Verde has
a dynamic, service-oriented economy focused However, the country has to deal
on commerce, trade, transport and public with many economic problems. Since
services. Tourism is a key sector and provides
January 2016, the IMF has warned that
direct and indirect employment for many
residents. This is likely why Cape Verde was Ghana is at high risk of debt distress.
one of the West African countries hardest hit This has been further aggravated
post-Covid. Its GDP contracted by 14% following Covid-19, with the
between 2019 and 2020.After the start of the government helping contain the
C o v i d - 1 9 p a n d e m i c , C a p e Ve r d e ' s
government overhauled its Ambition 2030
pandemic and support the economy, but
strategy, supported by the UN and focused on at the cost of a record fiscal deficit.
sustainable development. The plan seeks to According to Renaissance Capital,
diversify the economy away from tourism and Ghana's interest payments as a
develop sectors such as maritime trade, ocean- proportion of government revenues
based commerce, digital innovation, and the
g r e e n a n d c i r c u l a r e c o n o m y.
were 50% in 2020, the highest in Africa.
C ô t e d ' I v o i r e 2002 and 2020. The is also highly dependent
experienced the e c o n o m y i s h e a v i l y on foreign aid. In May
2021, the IMF Executive
h i g h e s t G D P dependent on mineral
Board granted $14.4m to
growth among West exploitation and can be
Gambia to support its
African countries between described as 'a rentier recovery post Covid-19.
2011 and 2020 at a state', in which most of its
Guinea was one of
compound annual growth national revenues come
the few West African
rate (CAGR) of 9.21%. from the rent paid by
After the end of the 2011 foreign individuals or countries to grow its
political crisis, Côte governments. economy in the wake of
d'Ivoire's economy Gambia's GDP has the Covid-19 pandemic.
increased steadily since
r e b o u n d e d s h a r p l y, Its GDP increased by 16%
2014. The country
culminating in 2020, going from
in a record
$13.5bn in 2019 to
$61bn in
$15.7bn. This is
2020. The
government connected to a strong
h a s 18.4% increase in the
introduced mining industry in
policies to 2020 and growing
encourage Chinese demand for
transparenc bauxite and
y and attract
aluminium, of which
businesses
ALASSANE DRAMANE OUATTARA Guinea is a major
including President of the Republic of Côte d'Ivoire.
t h e supplier.
recorded the highest
2016–2020 National
population growth in West In September 2021,
Development Plan. It was
Africa at 2.9% in 2020,
implemented to develop which can be attributed to Lieutenant Colonel
l a r g e i n f r a s t r u c t u r e a rapidly falling mortality Mamady Doumbouya, the
projects driven by the rate. Gambia's economy is commander of the
private sector.Following h e a v i l y r e l i a n t o n country's special forces,
the end of its civil war, a g r i c u l t u r e , w h i c h overthrew President
Sierra Leone's GDP has contributes 20% to GDP Alpha Conde in a coup,
been slowly growing at a and employs 78.6% of the raising the political and
CAGR of 6.1% between labour force. The country operational risk for its
Nigeria, Ghana and Côte d'Ivoire
lead in West African FDI
N igeria has consistently been
West Africa's leading foreign
direct investment (FDI)
destination since 2003, attracting one-
tenth of total African FDI in 2020.
received FDI in the oil and gas and
agribusiness sectors but has looked to
branch out in recent years with a focus
on logistics, financial services and
technology.
In 1995, the Nigerian Investment In August 2020, the Secretariat of the
Promotion Commission was established African Continental Free Trade Area
to encourage inward investment. officially opened in Accra, Ghana. The
Consisting of 27 governmental and government has also implemented
parastatal agencies, the commission infrastructure development goals in line
helps reduce red tape for new with the UN's SDGs and the African
businesses. Foreign investors are Union Agenda 2063. In May 2021, it
generally treated the same as locals in outlined plans for three rail projects
representing a combined $12.9bn to
Nigeria, including access to tax
attract private investment.
incentives.
Côte d'Ivoire is the third most
popular FDI destination in West Africa.
However, there have been periods Since the end of political crisis in 2011,
of decline. FDI into Nigeria suffered a FDI project values have more than
significant drop between 2009 and tripled from $697.9m to $2.54bn in
2010, largely due to the insurgency of 2019. Côte d'Ivoire ranks second only
terrorist organisation Boko Haram. to Ghana when analysing FDI data per
Investment has fluctuated since, 100,000 people, with 0.09 projects
reaching a high of 78 projects in 2013, created. As a Francophone country,
then declining year on year until 2018. Côte d'Ivoire's key investing countries
This can be attributed to diminished are France and Canada.
demand for commodities and One of the aims of Côte d'Ivoire's
fluctuating oil prices as well as political 2021–2025 National Plan of
unrest. Development is to facilitate private
Ghana attracted the second- investment and improve economic
highest number of projects between growth. Major reforms have been
2003 and 2020 and the highest number implemented since 2017 to bolster
political stability and encourage a
of FDI projects per capita in 2020.
healthy business environment.
Following the reintroduction of
However, violence surrounding the
multiparty democracy in 1992, Ghana presidential elections in October 2020
has enjoyed increasing political could discourage foreign investors.
stability. The country has traditionally
Guinea-Bissau
G
uinea-Bissau has struggled alleging voter fraud. Umaro Sissoco
to attract FDI in recent Embalo eventually took office in
years, with no inward FDI February 2020.
projects recorded between 2017 and
2020. Guinea-Bissau is among the
world's least-developed nations and Poor infrastructure, widespread
one of the ten poorest countries in the corruption, a vulnerable legal system
world. and high energy costs are also
The country has a long history of
deterrents for potential investors.
governmental instability. Since All countries have experienced
gaining independence from Portugal significant declines in FDI in light of
in 1947, four successful coups have Covid-19, regardless of how
been recorded and another 16 have successfully they attracted investment
been attempted, plotted or alleged. previously. Four West African
countries failed to attract any foreign
The 2019 presidential elections
investment in 2020: Guinea-Bissau,
sparked political unrest when the
Cape Verde, Gambia and Sierra
defeated candidate, Domingos Leone.
Simões Pereira, contested the results
CAPE VERDE BEST FOR BUSINESS
IN WEST AFRICA
M ore than 95% of Cape Verde's

population had access to
electricity as of 2019 , the
highest share of all West African countries
and a 10% increase compared with 2010.
in their countries, from 62 and 57 days,
respectively, in 2003 to just six on average
in 2019.
Both countries have also considerably
improved their scores on the Corruption
The country is also the best West African Perception Index. Côte d'Ivoire has
country in terms of digital connectivity. increased by seven points since 2003 while
Cape Verde had the highest number of Senegal has added nine. Senegal ranked
fixed broadcast subscriptions per 100 second in West Africa in the index in 2020.
people in 2019 as well as the highest share
of its population with access to the internet Cape Verde and Senegal lead on
(57%). Since 2003, Cape Verde has liveability
consistently ranked first in West Africa in Cape Verde has the highest unemployment
the Corruption Perception Index. rate in West Africa, which remained at
On average, it takes 2.5 days to set about 10% between 1991 and 2010. It
up a business in Togo, a significant continued to increase throughout the 2010s
improvement from 74 days in 2003. Togo to reach a record 13.41% in 2020, despite
also has the lowest corporate tax rate in the country's relatively small population
West Africa at 18%. Despite its small size, and high GDP per capita.
Togo is home to some notable companies, Cape Verde's economy remains
including African financial giants Ecobank dependent on tourism, leaving it highly
and Atlantic Bank Group. vulnerable in the wake of Covid-19 and
Côte d'Ivoire and Senegal have also fluctuations in the global economy. Other
cut the time it takes to establish a business sectors including fisheries, transport and
construction are rising in prominence in the Partnership Framework for Benin, which
country. In April 2021, a new IMF aims to aid the economic empowerment of
programme was announced to support Cape women.
Verde's post-pandemic economic recovery. Landlocked Burkina Faso has a
Even with its high unemployment rate, literacy rate of just over 40%, one of lowest
Cape Verde fares well in other quality of life in West Africa, and a life expectancy of
indicators. The country has the highest life 61.6, below the regional average. Less than
expectancy (73 years), literacy rate half of the country's population has access
(86.6%), percentage of people with access to basic drinking water services, a decline
to at least basic drinking water services on where it was ten years ago. Its tertiary
(87.1%) and tertiary enrolment rate enrolment rate is just 7.1%.
(23.6%). Burkina Faso has historically
Senegal has a relatively high life suffered from recurring droughts and
expectancy of all countries analysed, military coups. Since 2015, the country has
been battling increasingly frequent and
second only to Cape Verde. The country
deadly terrorist attacks by jihadist groups.
recorded a life expectancy of 68 years in
This has led to the internal displacement of
2019, a vast improvement on 58 in 2000.
6% of the country's population as of July
More than 80% of the country's population
2021.
have access to drinking water and more than Nigeria, despite being Africa's
13% of the population are enrolled in largest economy, also falters across several
tertiary-level education, above the West liveability indicators. The country's
African average. unemployment rate has been on the rise
Benin has the lowest unemployment rate in since 2016. It peaked at 9% in 2020, the
West Africa. It hovered around 1.5% for third highest out of all West African
most of the 1990s, falling below 1% in 2000 countries analysed. These figures are even
and rising to 2.65% in 2011. It stayed more startling when broken down by age.
around the 2.5% mark for rest of the 2010s, According to the Nigerian Bureau of
reaching 2.54% in 2020. Statistics, 33.3% of people who should be
While the unemployment rate is very working more than 40 hours a week were
low, underemployment is a significant recorded as unemployed in 2020.
problem in Benin Republic, particularly for Nigeria also had the lowest life
young people. Underemployment is where expectancy in West Africa at 54.7 years,
workers are underused because the only which can be attributed to poor healthcare
jobs available do not suit their skill set, are facilities. Economic inequality in Nigeria
part-time, or leave the workers idle. In has reached extreme levels, which have
addition, women form the majority of been further exacerbated post Covid-19.
employees in the informal sector, where Pre-pandemic, about four out of ten
their work is not recognised or fairly Nigerians lived in extreme poverty. The
compensated. World Bank estimates that the combined
The government's Action Plan impact of Covid and population growth
2016–2021 aims to reduce dependency on could see 100 million people living below
subsistence agriculture and boost the the poverty line in Nigeria by 2022.
country's development. In January 2019, the In December 2020, the World Bank
Board of the World Bank approved an announced its $1.5bn Country Partnership
International Development Association Framework for Nigeria to support growth
grant of $90m to back human development post-Covid-19 and help the government
measures in Benin. It also supports the achieve its goal of lifting 100 million
World Bank's 2018–2023 Country Nigerians out of poverty by 2030.
WEST AFRICA IS STILL HEAVILY
DEPENDENT ON FOSSIL FUELS
More than 90% of electricity generation in Gambia, Benin,

Guinea-Bissau and Senegal was derived from fossil fuels in 2018.
S ierra Leone was the lowest

producer of electricity from
fossil fuels (35.36%) in
West Africa in 2018. The country
has an electrification rate of just
National Adaptation Programme
of Action, the sectors that will be
most affected by climate change
in the country are agriculture,
health, fisheries, water and coastal
generation.
Nigeria's Renewable
Energy Master Plan seeks to
increase the supply of renewable
electricity from 13% of total
22.7% and more than 70% of its resources. electricity generation in 2015 to
electricity is derived from The average temperature 23% in 2025 and 36% by 2030.
hydropower. The government's in Gambia has also increased Renewable electricity would then
National Renewable Energy ,growing by 1.03°C between 1960 account for 10% of Nigeria's total
Action Plan was introduced in and 2020. Climate change is energy consumption by 2025.
2015 with the aim of utilising the expected to increase or make more Establishing renewable
country's rivers to generate severe windstorms, floods, energy sources in Nigeria is
hydropower and reduce fossil fuel droughts, and coastal erosion and highly challenging, particularly in
rural areas where there is an
dependency. saltwater intrusion in the country.
abundance of solar but little or no
Similarly, Liberia's access Agriculture represents
access to the grid. In 2018, Nigeria
to electricity is extremely limited 26% of Gambia's GDP and invested more than $20bn in solar
at 27.7%. Hydroelectric power employs 68% of the labour force. power projects to increase the
represents 55% of its electricity Changes in rainfall will have a capacity of the national grid.
generation. Despite limited significant impact as much of Measures were also taken to
development of its clean energy Gambia's agriculture is rain fed. reduce reliance on it by building
sector, Liberia has abundant Gambia published a Climate mini-grids in rural areas without
hydro, biomass and solar Change Priority Action Plan in mains electricity.
resources. Electricity production 2016 that focuses on 24 cross- Several West African
is projected to expand by about ten sectoral activities. The UN's economies have experienced
times to reach 5,000GW by 2030. $20.5m Environment Programme rapid growth in recent years, but
Togo's average seeks to restore forests and poverty and political instability
temperature increased by 1.04°C marginal agricultural land in are still prevalent across the
between 1960 and 2020 to partnership with the government. region. This disparity is expected
27.86°C. The main climate risks Nigeria was responsible to only worsen in light of Covid-
facing Togo are flooding, drought, for almost 70% of West Africa's 19. Local governments must take
poor distribution of rain, late CO2 emissions in 2018. Fossil measures to reduce inequality
rains, violent winds and coastal fuels also accounted for more than within countries and across the
erosion. According to Togo's 77% of the country's electricity region in order to unlock West
Africa's full economic potential.
IS DIGITAL THE NEW INFRASTRUCTURE? - Paul Crutzen
an increase from 7% to 25–30% in the
C ovid-19 has led to the rise of digital

infrastructure, but how much
support are new projects going to get
from investors in the short term and how
much will governments have to spearhead
amount of people working from home on
multiple days a week in the US in 2020.
While companies such as Apple
reported a dramatic drop, to near to zero, in
data usage on typical paths to work during
the financing effort?
the pandemic, having so many people
The rise of technology as a new working remotely meant that the so-called
infrastructure sub-sector began some time 'fibre-to-home' network experienced
before the Covid-19 pandemic struck. Over increasing use. It also meant that people
the past five years in particular, the working from suburban areas were relying
infrastructure industry has seen a flurry of upon their local broadband more than ever.
deals and new projects in telecoms towers At the same time, the pandemic has
and data centres, and there has been much impacted not only urban travel, but air
talk of rolling out 5G and fibre-optic travel too. In the early months of the virus's
networks across countries. spread, many infrastructure deals and
While raising eyebrows among the projects in the aviation sector were
purists of the asset class – those for whom suspended, and while a lack of traffic due to
infrastructure should remain limited mainly lockdown measures meant that some
to transport and energy more and more highway and rail projects could be
investors have started to view these sectors completed more quickly, the transport
no longer as merely technology, media and sector was generally perceived as a risky
telecoms or real estate plays, but as reliable space.
and steady assets that fit their infrastructure On the other hand, with network
allocation. carriers reporting surges in their network
The spread of Covid-19 meant that traffic of 25% (AT&T) and 50% (Vodafone)
almost overnight vast portions of the versus their baseline, and companies such
working population went from commuting as Zoom increasing daily users (by 200
to an office every day to simply getting out million in March 2020, versus ten million in
of bed and sitting at their kitchen/spare room December 2019 in Zoom's case), digital
infrastructure started to be seen not only as a
table to fulfil their professional duties.
resilient asset class, but as the asset class of
The US Bureau of Labor Statistics reports
the future.
HOW TO FINANCE
DIGITAL INFRASTRUCTURE
C ase studies back up the
theory that digital
infrastructure will only
grow in the coming years. The
International Energy Agency
government, for instance,
launched the National Digital
Infrastructure Fund, which it
seeded with £400m, and invited
private investors to match that
take years to play out. Yet in the
near term, we believe it will
affect governments' ability to
finance large-scale projects.
Most countries faced a gap
expects global internet traffic through a tender that was won between infrastructure needs
to double by 2022 to 4.2 by Amber Infrastructure. and financial resources before
zettabytes (4.2 trillion Such efforts alone will the pandemic hit; that gap is
gigabytes) a year. Cisco not meet this great demand, now larger as a result of it.”
however, and while the industry Normally, when government
reports that nearly two-thirds funds are not enough to cover a
of the global population will expects digital infrastructure to
be one of the tools that bill, the private sector
have internet access by 2023, intervenes or is called in to
with 5.3 billion internet users governments will use to reboot
their economies in a post- help.
in total, up from 3.9 billion However, within the
(51% of the global population) pandemic landscape, many
worry that there simply will not infrastructure investor
in 2018. community which is mainly
This means that the be sufficient funding to do so. made up of institutional
already significant demands A recent PwC report on investors with long-term
on digital infrastructure are global infrastructure trends liabilities to meet for their
only going to rise, and to highlights such concerns while pension funds or insurance
match them a significant addressing the rise of digital policies some issues may
financing effort is required. infrastructure and technology. prevent them from getting
Even before the pandemic, “The emergence of Covid-19 behind the digital cause in the
some governments had started introduces an altogether new next few years, at least in the
adding digital infrastructure to set of challenges,“The full volumes required.
their budgets. In 2017, the UK impact of the pandemic will
The changing face of digital infrastructure
D igital infrastructure
goes beyond 5G,
fibre-optics and
data centres and has come to
cover, among other things,
innovation is also making
asset life cycles less
predictable (causing a ripple
effect along supply chains
affecting service providers),”
contractors and financing
organisations, which will
need shorter-term contracts
and a more flexible approach
to financing,” it adds.
the outfitting of streetlights notes the PwC report. Alistair Higgins, managing
with sensors, wireless “And current contract director in the debt and
transmitters, electric vehicle structures, which last for advisory team at ING Bank,
charging stations, security decades and are highly rigid, shares a similar view, given
cameras and, more are impeding the application that typical infrastructure
generally, the so-called of novel technology. The financings comprise equity
internet of things (IoT). disparity between and debt tranches, each
“Though these are positive technology cycles and asset having different return and
developments, the growing timelines will have risk appetites.
role of technological significant consequences for
AN OPPORTUNITY
FOR SUSTAINABILITY
T he equity side of the industry is

definitely showing interest in this
space and some are making it part of
their environmental, social and governance
agenda.
A recent survey of infrastructure investors
conducted by the IJGlobal journal and
M&E Global revealed that 32.4% thought
government support was key to unblocking
digital infrastructure investment. The
Alistair Higgins survey also showed, however, that despite
MD,ING Bank, London, England the costs, investors are keen to get involved.
More than half believe that digital
“ Infrastructure debt investors are

typically looking for stable, long-
term cash flows, which aren't always
proven with new technologies,” he says.
“Infrastructure is arguably seeing a
infrastructure is key to rebooting
economies post-Covid and 63.6% say that
the benefits of this sector outweigh the
risks.
“After all, these are long-life assets
renewed focus on new technologies not providing essential services, with strong
seen since the 19th-century railway boom. cash flows (customers who enter into
“However, much of this focus is arguably recurring contracts) with the ability to
as a result of a dearth of traditional potentially deliver long-term growth in a
infrastructure procurement by government down or flat market, as is the case now. This
rather than an increase in viable new is key for institutional and other investors,”
infrastructure-related technologies.” say Benjamin Kelly and Antonio Botija,
Covid-19 has given fresh impetus for respectively senior analyst global research
investors to reinvent their investment and head of origination and investments
models, although many remain naturally within the infrastructure team at Columbia
cautious given the need to take stock of the Threadneedle Investments, in a recent
“new normal”, Higgins argues. comment piece.
“There is a reluctance to take on unproven Private-public partnership (PPP) consultant
technology risk on the debt side, where the and expert David Baxter sees “tremendous
potential upside is for the benefit of equity, interest” from investors. “There is interest
and debt may potentially still take specifically in digital infrastructure that is
disproportionate downside risk,” he adds. sustainable and resilient,” he says.
Higgins agrees, however, that the appetite “I am currently working on a PPP pilot
for digital infrastructure is much greater on project that is focused on providing
the equity side of the industry, while the broadband connectivity to peri-urban
role of government in establishing viable businesses that have been impacted by the
longer-term investment frameworks will pandemic and there is considerable interest
be an important factor to bridge any in improving digital infrastructure in peri-
financing gap. urban areas in emerging economies so that
they can be competitive.”
David Baxter,
Private-Public Partnership (PPP)
Consultant
B axter points out

that emerging
markets are best
positioned to provide
opportunities in this
the biggest growth
geographies in the next
decade and will offer the
most opportunities to
investors.”
buildings more energy
efficient, Covid-19 has
been a real catalyst.
“The service we provide
helps users to check
space, as they are not remotely that the
encumbered with dated Improving digital temperature is right in
information and infrastructures to meet their office or restaurant,
communications SDGs or whether the water is
technology infrastructure Many companies have flowing or not,” explains
and do not have to also incorporated digital chief operating officer
compete with existing infrastructure into their Khiloni Westphely. “It
monopolistic enterprises. efforts to help meet the also not only tells them
“There are emerging UN's Sustainable whether something is
economies such as Development Goals wrong but pre-warns them
Rwanda that have better (SDGs). about malfunctions.”
access to broadband than For Infogrid, a UK-based
the rural US, for company using IoT and AI
example,” he states. “I to provide end-to-end
firmly believe that Africa connected sensor
and Latin America will be solutions that make
W hen Covid-19 hit, high on its agenda and says that
Westphely says there Covid-19 has propelled the
was a rush from owners company's investment plans in 5G.
of commercial buildings to get “We believe that edge computing
Infogrid's services in order to keep
will be a key enabler of 5G and as
an eye on their properties remotely.
As they were forced to shut, many those demands increase,
restaurants started requiring infrastructure investment
systems that could reassure
throughout the UK and
them, for instance, that
their freezers would other countries will
keep functioning. also grow,” says
Based in the Marc Garner, vice-
UK and with a
president of
large presence in
the US and a Schneider's secure
smaller one in power division in
Estonia, Westphely
the UK and Ireland.
says Infogrid is looking
Schneider has
to Asia as the next
market to set up Khiloni Westphely, worked with the
CEO, Infogrid, UK
World Economic
shop in.
Forum as part of
While more related
an expert group
to prop-tech than infrastructure,
investigating the applications and
companies such as Infogrid fall business cases driving 5G adoption
within investors' green and SDG on a global scale.
portfolios, as its role to make “We estimate that in stand-alone 5G
buildings more energy efficient is clusters (without 3G or 4G) there
seen as vital to the achievement of will be a three to one ratio of
carbon-cutting goals. telecoms towers with base stations,
Energy and automation digital including mobile edge cloud data
solutions provider Schneider centres, for every existing 4G tower
Electric also has energy efficiency today,” says Garner.
2022 Global Strategy Outlook, Fundamentals
will dominate – Jesus Campos
M organ Stanley
strategists say
the easy returns
are over for U.S. equities,
credits and Treasuries, but
says Andrew Sheets, Chief
Cross-Asset Strategist for
Morgan Stanley Research.
While inflation will be at
levels higher than many
Emerging markets
seem primed for growth,
but it's too early to be all-
out bullish those markets,
say strategists. “In China,
see value in European and investors have seen before, headwinds from energy
Japanese stocks in 2022. Morgan Stanley prices, regulation and
The current market economists believe prices COVID remain, and our
cycle has been hot and fast. will soon “peak then expectations don't call for
So much so, in fact, that retreat” as supply chain major policy easing, at
investors are now pressures ease and prices least not yet,” says Sheets.
confronting a very for many commodities “The one exception is
different dynamic for the normalize. To that end, high-yield credit in China,
year ahead—early-cycle central banks likely won't where we think that the
timing, mid-cycle take drastic measures to market is underestimating
raise rates and pump the the resolve and ability of
conditions and late-cycle
brakes on growth. That
valuations, with policymakers to control
said, investors have an
exuberance to boot. the disruption in the
almost Pavlovian response
to any talk of tightening, property sector.”
“As unprecedented fiscal which is just one of many
and monetary policy reasons to approach U.S. Here are five highlights of
support fades, equities and Treasuries the 2022 global investment
fundamentals dominate,” with caution. outlook.
TIME TO LIGHTEN UP
ON U.S. STOCKS?
I n a view that is “most

likely to raise
eyebrows,” says
Sheets, strategists think
the S&P 500 index could
stocks to account for high
valuations and more catch-
up potential and less
volatility elsewhere in the
world.
earnings trends, but
uncertainties are mounting
around cost pressures,
supply issues, policy
uncertainty and tax
decline 5% in 2022 while “The persistent price changes,” says Mike
other developed markets outperformance of U.S. Wilson, Chief U.S. Equity
could end the year higher. stocks for much of the last Strategist.
They recommend decade has been driven by
underweighting U.S. superior and more durable
EUROPEAN AND JAPANESE
STOCKS ARE CALLING
I n contrast to U.S. equities, stock

markets in Europe and Japan are
more reasonably priced and geared
toward growth. “And thanks to reduced
inflationary pressures, their central
compared to the rest of the world, and
that pattern should continue thanks to
increased mergers and acquisitions,
buyback activity and changes in investor
positioning since many global portfolios
banks should be exceedingly patient,” had been underexposed to the region.
says Sheets, whose team recommends “Our combined earnings and
investors overweight both markets. valuation assumptions suggest that
In Japan, equities continue to European stocks can deliver an 8% price
deliver improving returns on equity, return and double-digit total return,”
while economic stimulus, business says Graham Secker, Chief European
reopenings and strong global capex all Equity strategist. The team's top sector
suggest that Japan's stock market could picks include autos, energy and
appreciate 12% next year. financials, which should all benefit from
Meanwhile, the MSCI Europe the move up in real yields.
index has enjoyed its best period of
relative outperformance in 20 years
Stock Selection Could Matter

More Than Style and Sector
M organ Stanley strategists

believe health care, financials
and secular technology
companies could see upside in the year
ahead. Consumer goods and cyclical
“In our view, the economic and political
environment has been permanently
altered from its pre-COVID days,
although the changes are not necessarily
due to the pandemic itself,” says Wilson.
technology stocks could lag as supply The eventual outcome should
and demand dynamics settle into a more mean greater investment and
normal pattern. productivity, but that could take years to
Even so, relative to other points in play out. “That breeds higher uncertainty
this market cycle, there are fewer and dispersion, making stock picking
opportunities for investors to take more important than ever in the year
advantage of big swings in styles and ahead,” Wilson says.
sectors.
MONEY
VEX
GLOBAL FDI
PROSPECTS FOR
2021/2022
- James Zhan
How will FDI recover?
T here are reasons to be optimistic for

the foreseeable future
The Covid-19 pandemic caused a triple

economic shock it hit supply, demand and
The FDI recovery is likely to be a gradual
one, trailing the global economic recovery
in GDP and trade. According to the IMF's
latest World Economic Outlook, global
policy-making at the same time. Foreign economic output is now expected to grow
direct investment (FDI) paid the highest by 5.8% in 2021, from –3.3% last year, and
price as its drop in 2020 was significantly global trade by 8.4% from –8.5%. Both are
sharper than the drop in global gross expected to fully recover by the end of
domestic product (GDP) and trade. 2021.
Looking ahead, I am cautiously There are two dichotomies here.
optimistic about global FDI prospects in First, the current FDI recovery differs in
2021, and more optimistic for 2022. Flows modes of investment. Cross-border
will bottom out this year, with a modest mergers and acquisitions (M&As) are
increase of up to 15%, regaining part of the leading, while the actual greenfield
35% lost in 2020. Global FDI is likely to investment is lagging. M&As are led by
increase further by 20–30% in 2022. Our corporate restructuring and capex for
most optimistic scenario is that global FDI inventory replenishment, whereas large-
will approach the pre-pandemic level of scale new investment projects take time to
be prepared and implemented. The pace of
2019.
actual greenfield investment growth
Nevertheless, global FDI prospects
appears slower than that of M&As in 2021.
are highly uncertain. They will depend on,
The announced greenfield
among other factors, the pace of economic investment has increased significantly,
recovery and the possibility of pandemic according to fDi, indicating a much
relapses, the potential impact of recovery stronger recovery in 2022.
spending packages on FDI, and policy Second, the pace of FDI recovery
pressures, including geopolitical tensions differs geographically. Developed
and reshoring. economies, such as the US and the EU, are
leading the global FDI recovery, while Policy environment.
developing economies may trail behind. While the regulatory environment
African and Latin American economies will generally remains favourable for FDI
continue to suffer from the impact of the inflows, the number of restrictive policies
pandemic on FDI. Their FDI rebound will being introduced globally has been
be very modest and the full recovery is increasing significantly, driven by rising
likely to take much longer. national security concerns and geopolitical
FDI flows to Asia will remain tensions and rivalry. According to Unctad's
relatively stable at a high level. Flows into global investment policy monitor, the share
of restrictive/regulatory measures in the
the 10 Association of Southeast Asian
total new policy measures has increased
Nations countries will recover from the from the annual average of 5% in the 1990s
heavy loss in 2020. FDI into South Asia, led and 2000s to more than 41% in 2020. The
by India, will decline significantly. ongoing tax reforms in large economies
In terms of the distribution of FDI may also create short-term uncertainty for
growth, sectors such as ICT, consumer foreign investors, as well as exerting
goods, manufacturing, retail, business longer-term implications.
services and infrastructure are leading the Political pressure.
FDI recovery, while hotels and airlines, and For outward FDI, the strong political
extractives for fossil fuels, are lagging pressure on and incentive for multinational
behind the overall trends. enterprises to “make at home” are
Furthermore, the protective policies discouraging outward FDI from major
of many governments will be less enabling home countries and encouraging reshoring
for cross-border technological cooperation, of their overseas operations, hence the
particularly through FDI modes. More than reduction in the supply of FDI.
80% of the technological cooperation has Environmental concerns.
been through the FDI mode over the past The sustainability imperative will drive the
decade. growth of green, blue, social and
infrastructure investments. Many countries
will focus their efforts on promoting and
There are five major factors that will have facilitating more sustainable greenfield
an impact on the future global FDI investment, particularly in sustainable
landscape. These are: development sectors.
Economic prospects. The rapid growth in Global FDI recovery will be gradual
GDP and trade will contribute to the growth and the road to recovery remains bumpy.
of FDI. Nevertheless, the imbalance of Developed countries will lead the FDI
recovery among different industries and the recovery, mainly through the significant
fact that FDI cycle typically lags the increase in cross-border M&As and capex,
business cycle create an inertia for prompt while developing economies will lag,
and massive recovery, such as in GDP and owing to the low level flows in greenfield
trade. investment. In medium term, investment
Firm-level perspectives. Corporate cash is protectionism will negatively affect both
piling high and investors are bullish about inward and outward investment. However,
capex. The 25 top non-financial firms in the the global sustainability imperative will
S&P 500 expect a 10% capex increase in boost green and blue investment for
2021, while half of the S&P 500 companies sustainable development.
are not expected to invest more than they
did in 2019. FDI is more concerned with James Zhan is senior director of the
Investment and Enterprise division at the
stock replenishment and restructuring in the United Nations Conference on Trade and
short run. Development (Unctad).
Global Disruption Is Boosting
Africa's Creative Industries
S pending on African content production

is also on an upward trajectory that was
previously only dreamt of. According
to Purely, investment by streaming services in
the Middle East and Africa (MEA) was up
46.3% in 2020, reaching $2.8bn.
The surge is not just financial, but also
qualitative. African literature is attaining
global recognition, with authors from
Tanzania and Senegal winning some of the
world's biggest literary accolades such as the
Nobel Prize and Goncourt Awards in 2021.
These developments increase the
likelihood of much-needed investment flows
to the continent, which remain much lower
Hannah Wanjie Ryder than other regions. A 2015 EY study for
Unesco estimated cultural and creative
industry revenues in the MEA region account
A frican pop culture is witnessing

a surge in popularity that has
never been seen before. In
September 2021, the most 'Shazamed'
song (song found using the music
for just 3% of global totals.
Recent success also illustrates the
flaws of thinking that an incremental
approach without changing existing
structures will yield results. It is not seed
identifying app Shazam) in the world money from creative funds, nor is it African
governments better protecting intellectual
was the Afrobeat track 'Love Nwantiti' property, that have brought about the
by the singer Ckay. stratospheric rise of global culture on the
world stage. Such efforts have been ongoing
for decades, yielding few results.
The real reason for the success has
been systemic change to the global market. As
the world's digital economy grows, the
business models of broadcasters, social media
companies and publishers have changed, and
it is this change that is for the first time
delivering for Africa.
It is Tiktok's model that has led to the
rise of Afrobeats. It is Netflix's model of
seeking out new subscribers in frontier
markets and audiences that has led to the
launch of Netflix Naija, an untapped market
that had been producing more films than
Hollywood for years prior. Audible too
appears to be doing the same for books.
Africans should not only capitalise on
Ckay this global market disruption, but encourage
even more. Now is the time to see how we can
bring change to other global and financial
markets if we want real progress for Africa
beyond the cultural industries.
INVESTORS TO WATCH IN 2022
FIVE AFRICAN COUNTRIES FOR
·NAS: Highlight with RED colour, Egypt, Botswana,

Morocco, Ghana & Tanzania, on the Map.
Egypt Botswana
E gypt is one of the largest economies in

Africa and in 2019 was the top FDI
destination in the continent. The
country recorded 140 greenfield FDI
projects, an increase of 52% on 2018 and its
B otswana is one of fastest-growing
economies in Africa and is set to
continue making strides with expected
economic growth of 9.7% in 2021. The
government has further forecast 4.3% growth
highest level recorded between 2003 and in GDP in 2022, according to its budget
2020. Since 2016, and pre-Covid-19, Egypt strategy document. GDP surpassed $18bn in
attracted more than 10% of FDI into Africa, 2018 and 2019 alongside a small decline in
following investments in key sectors such as inflation.
automotive, financial services, agriculture In October 2021, Botswana was
and ICT. removed from the Financial Action Task
The IMF has predicted that FDI in Force's (FATF) 'grey list' following
Egypt will grow year on year until 2025, improvements in money-laundering handling.
The FATF, an intergovernmental body, focuses
adding that the country could see FDI capital on money laundering, terrorist financing and
investment increases of 59% in the financial other illicit money flows. Removal from the list
year 2021–22 to reach $8.6bn. It further has sparked optimism and should help efforts to
forecasts that FDI will rise to $11.7bn in the diversify Botswana's economy and attract
financial year 2022–23 before reaching foreign investors.
$16.5bn in the financial year 2024–25. The country also plans to utilise its
In 2019 the Egyptian government energy resources. It aims to become a net
announced the establishment of seven new exporter of electricity by 2027. In 2021
free zones as part of plans to attract more Botswana, Namibia and the US signed a
investors and increase exports and memorandum of intent to create a mega solar
productivity. project in the two southern African countries.
Egypt was also one of the few This has the potential to generate 3,000–5,000
countries to witness growth in GDP in 2020, megawatts of energy. Once realised it would
increasing from $303bn in 2019 to $363bn in transform the country to one of the most
2020. The IMF predicts real GDP growth of significant producers and exporters of solar
power energy.
Morocco production, Ghana has been building its
tech sector over the past few years and its
M orocco's GDP had been

increasing yearly since 2016,
reaching a peak of $119.7bn in
2019, before Covid-19 struck. The country
has an annual compound growth rate of
tech-focused products and services are
fuelling growth.
The opening of Google's first
African AI lab in Ghana in 2019 and the
recent announcement that Twitter will
4.5%. establish its African headquarters in the
Morocco has had one of the more country are expected to further establish
successful vaccination campaigns and has Ghana as a regional IT hub. Emphasis is
used the Covid-19 pandemic as a chance to being placed on innovation and start-ups,
rebalance and launch an ambitious attracting tech talent to the country.
programme of transformative reforms. IT Infrastructure is continuing to
Following two years of drought, the develop in Ghana. Telecoms company
country also had an excellent harvest in MTN Group is aiming to provide 4G
coverage to 98% of the country by the end
2021, spurring growth in the economy. of 2022, before quickly introducing 5G.
Agriculture gains are expected to continue,
with Morocco's Minister of Agriculture,
Mohamed Sadiki, stating: “Citrus Tanzania
production is expected to increase by 14%
and olive production by 21% compared
with the previous season.”
Morocco also recently implemented
a new agriculture strategy, the Green
T anzania's GDP has been increasing
since 2016, reaching $62.4bn in
2020, growing at a rate of about 6%
over the past five years. Inflation declined
to 3.3% in 2020 following stabilisation in
Generation 2020–2030. Its core objectives food prices. The 2020 African Economic
are to support and encourage young people Outlook report stated that Tanzania was
to invest in one million hectares of arable among the world's ten fastest-growing
lands, creating about 350,000 jobs, and economies that year.
In 2020 the country reached lower-
increasing agricultural exports to $6.6bn middle-income status. Tanzania's
by 2030. Development Vision 2025 aims to propel
FDI peaked in the country in 2019, the country further towards the middle-
with a total of 111 FDI projects recorded, income bracket by 2025. The African
an increase of 56% on the previous year. Development Bank forecasts Tanzania's
Ranking third in Africa in the World Bank's GDP will grow by 4.9% in 2022 and 6.3%
Ease of Doing Business ranking in 2020, in 2023.
and with a 1.7 point increase in its score, The appointment of President
the country offers an attractive landscape Samia Suluhu Hassan in April 2021 also
for investors. brought some optimism to Tanzania.
Hassan travelled to Kenya for talks to
improve trade relations between the
Ghana countries following years of feuding. She
G hana's GDP has been increasing has also promised to lower income tax and
since 2016, peaking at $72bn in review existing tax structures and charges.
2020. It was cited as the fastest- The outlook is positive for these
growing economy in Africa in 2019. African countries, all of which are on a
The country is less dependant on oil growth trajectory. Although Covid-19 and
the Omicron variant will pose yet more
than some of its counterparts, meaning challenges, each looks well positioned to
it was able to combat the recent drop in emerge from the pandemic in a healthy
oil prices. state.
Having diversified from oil
AGRIBUSINESS
Trends to look out for in 2022
From robotics to waste reduction and sustainability, Investment Monitor
identifies trends that could shape the agribusiness industry in 2022.
By Marina Leiva
The use of drones in agribusiness is one of the trends expected to gain momentum in 2022
as robotics and the internet of things become more essential to farmers.
(Photo by Li Xianjun/VCG via Getty Images)
A s 2021 draws to an
end, Covid-19
continues to have
a big impact on the
agribusiness industry,
healthier lifestyles, while
the world also continues to
face the challenge of
feeding an ever-increasing
population while battling
developments go,
however, robotics, the
internet of things (IoT),
waste reduction and
sustainability, healthy
causing issues such as the climate crisis. Indeed, plant-based food
supermarket shortages on the hurdles facing the alternatives and low-
a global scale. Meanwhile, agribusiness industry in alcohol drinks are some of
consumers continue to 2022 look quite similar to the areas set to grow
show a growing those from 2021. throughout the coming 12
preference for adopting As far as more positive months.
The role of robotics in shoring up supply chains PLANT-BASED ALTERNATIVES
P ictures of empty supermarket shelves in the

UK made news headlines around the world,
but food supply chain issues have been a
common problem worldwide as the pandemic
revealed their vulnerability.
CONTINUE TO GROW
A ccording to the FAO, agricultural
greenhouse gas emissions will grow by 4% by
One of the main causes attributed to issues with 2030, and with livestock accounting for more
food supply chains has been a shortage of labour than 80% of this increase, more and more
exacerbated by the pandemic. As such, the role consumers are turning to plant-based
that robotics can play in agricultural supply chains alternatives to reduce the carbon footprint of
has risen to centre stage and is one to keep an eye
on as a potential agribusiness trend in 2022. their meals.
The global agricultural robots market size is According to Verified Market Research, the
expected to grow from $4.9bn in 2021 to $11.9bn global vegan fast-foods market size was
by 2026, at a compound annual growth rate valued at $17bn in 2020 and is projected to
(CAGR) of 19.3%., according to
MarketsandMarkets research. reach $40.3bn by 2028, growing at a CAGR of
The use of agricultural robots can also help 11.4% between 2021 and 2028.
farmers to reduce inputs – pesticides, herbicides With adult obesity continuing to increase in
and fertilisers – which can help to increase the most global regions, according to the FAO,
sustainability of agriculture.
However, according to the UN's Food and any move towards healthier diets could also
Agriculture Organisation (FAO), about 90% of reduce the strain on a country's health
farmers worldwide operate on a small scale and
this technology seems some way off being
accessible to this large group. Waste reduction and sustainability
The internet of things and improved sustainability
In the same vein as robotics, and within the “Reducing food loss and waste through a coherent
agritech space, the use of IoT technology set of policies and investments in food
promises to help make agriculture and agriculture production, harvesting, handling, packaging,
supply chains more efficient and, in turn, more storage, transportation, processing and
sustainable.
According to a market research report published marketing,” has been identified by the FAO as one
by Meticulous Research, the global agriculture of the key policy areas to enable food supply
IoT market is expected to grow at a CAGR of chains to lower the cost of nutritious foods.
15.2% from 2019 to 2027 to reach a value of According to UN projections, the world's
$32.7bn by 2027. population is expected to grow from 7.8 billion in
The scope of IoT in agriculture is vast, from the 2020 to 9.7 billion in 2050. Some 2.4 billion
use of drones to check or spray crops to utilising people did not have access to adequate food in
smart greenhouses and smart sensors to maximise 2020 an increase of 320 million people in just one
yields while minimising the use of resources.
year, according to the FAO's State of Food
Alcohol-free and low-alcohol drinks Insecurity and Nutrition in the World in 2021
report.
Low-alcohol and no-alcohol drinks have been Consequently, future-proofing global food supply
gaining popularity over the past few years, with
drinks such as hard seltzers increasingly chains to improve the sustainability of the food
populating supermarket shelves across the US and system while meeting the challenge of feeding the
Europe. world will be a key item on the agribusiness
The low and no-alcohol category increased its agenda in 2022.
share within the total beverage alcohol market to As the world enters 2022, and the Covid-19
3% in 2020, and total volume is forecast to grow
by 31% by 2024, according to the No- and Low- pandemic continues to pose problems the world
Alcohol Strategic Study 2021 by IWSR Drinks over, the virus looks set to dominate agribusiness
Market Analysis. trends in the coming year. However, this does not
The report looks into no-alcohol and low-alcohol mean that other key issues, such as meeting the
consumption across Australia, Brazil, Canada, targets of the UN's Sustainable Development
France, Germany, Japan, South Africa, Spain, the Goals or fighting the climate crisis, should be
UK and the US, which represent about 75% of the
world's consumption of these types of drinks. neglected. The five trends identified above can all
Even though alcoholic drinks are not likely to work towards reaching these aims, and hopefully
disappear any time soon, the market share of as we approach 2023 some notable progress will
healthier, low-alcohol and no-alcohol drinks is have been made.
one to keep an eye on within potential
agribusiness trends in 2022.
Ten technology investment areas to watch in 2022.
Staying on top of technology developments in 2022
will be a priority for most companies and investors,
but which areas need close attention?
By Lara Williams
Cryptocurrencies such as Bitcoin look set to become more relevant to business markets in 2022.
(Photo Illustration by Chukrut Budrul/SOPA Images/LightRocket via Getty Images)
T here is nothing like the start of a new

year to hone a company's business
priorities, and as technology
underlies almost every business
management process and continues to be
applications that help their core businesses.
The AI market will be worth $190bn in
2025, up from $67bn in 2021, according to
GlobalData.
Businesses should already be
the number one enabler of growth, investing in one or all aspects of AI,
investment in this field will be top of mind including machine learning, data science,
for corporate decision makers. Here, conversational platforms, computer vision
Investment Monitor takes a look at the AI chips, smart robots and context-aware
technologies to watch in 2022. computing. Banking, healthcare and
technology sectors lead implementation,
but most businesses will face some
Artificial intelligence disruption from some or all of these
Much has been made in the media of ways in technologies, according to GlobalData.
which artificial intelligence (AI) could Big Tech is at the forefront of AI use
disrupt our world. GlobalData's 2022 TMT cases, with the significant advantage of
Predictions report sees a more practical role having vast quantities of data and
for AI in the coming year, with less hype and computing power at its disposal, a
companies focusing more on practical
prerequisite for AI 2022. With increasing skills higher risks of downtime,
development. shortages as the sector according to GlobalData.
The metaverse continues to grow, software Fintech
The metaverse is a virtual start-ups will be targets for A surge of investment in
world where users share acquihires, especially those start-ups has expanded the
experiences and interact in already partnered with larger number of fintech unicorns
real time within simulated tech companies, predicts to 116, with a combined
scenarios. Investment in a GlobalData. Some – value of $529bn, according
global metaverse could PsiQuantum for example – to GlobalData, whose
reach $800bn by 2024, may even go public in 2022. analysis expects at least ten
according to Bloomberg start-ups to join the unicorn
Intelligence, and Big Tech is Cloud computing ranks over the next two
already investing The global cloud computing years, including Atom
significantly even though market will be worth $616bn Bank, Corvus Insurance and
realisation of the full global by the end of 2022, according Navi Technologies. The
metaverse is some way off. to GlobalData forecasting, up growing stable of highly
Meta (formerly Facebook) 13% from 2021. Cloud valued fintech start-ups
plans to invest $10bn by the services will be an essential demonstrates the level of
end of 2021 in its Reality utility for businesses in 2022 potential disruption to the
L a b s d i v i s i o n , as they increasingly outsource financial services sector. A
demonstrating how much of management of data and sense of 'if you can't beat
a priority this area has applications to third-party
become. Early prototypes them join them' will pervade
providers. Data centre security with old line institutions
and use cases will emerge in will become evermore
2022, according to including Goldman Sachs
important, as will their need to and Visa forming alliances
GlobalData, with gaming an be redesigned to become
ideal starting point and with fintech unicorns.
cloud-centric. As a
enterprises becoming the consequence, GlobalData
prime market for metaverse Cryptocurrency
expects cybersecurity The cryptocurrency market
developers in 2022.
investments to rise, especially is worth $3trn and will
the security-as-a-service
Quantum computing continue to grow in 2022,
approach of deterring
The next year will be an predicts GlobalData,
cyberattacks. The Covid-19
important one for quantum despite its volatility. The
crisis has been a steep learning
computing, a sector on the sector is garnering
curve and prompted greater
cusp of commercialisation. mainstream acceptance
investment in disaster
Important advances in this
recovery services, particularly with businesses including
nascent technology are
for critical national Visa and PayPal
being made while
infrastructures such as incorporating crypto into
increasing competition for a
healthcare and energy t h e i r p a y m e n t
finite global talent pool of
services. Successful infrastructures. A
software engineers will
companies will secure their
continue to be a challenge proliferation of
data and applications for ease
throughout the next year and cryptocurrencies beyond
of use for remote workers
beyond. Quantum the original Bitcoin means
using cloud-native
computing will enter a there are now more than
applications and keep their
period of consolidation in 14,000 types in existence.
operations running even with
With global regulators grappling with how potential to disrupt the much larger $221bn
to regulate the sector, cryptocurrencies have video games industry when companies
the potential for major disruption to global
settle on the right growth strategies.
financial systems.
Meanwhile, in 2022, services with
Electric vehicles and batteries exclusive games and reasonable pricing
Annual electric vehicle (EV) production will will see faster adoption than others.
exceed ten million units by 2025, according
to GlobalData. EVs as a proportion of new
5G
light vehicle production will rise from 5% in
5G adoption will increase steadily in 2022,
2021 to 11% in 2025, predicts the analytics
company. The shift towards EVs has been driven by the Asia-Pacific market. North
primarily driven by legislative changes to America will have the highest 5G
meet environmental, social and corporate penetration by population in 2022,
governance targets, but momentum is also increasing faster than any other region, to
becoming demand-led. Although Europe's 115% by 2025. However, the Asia-Pacific
EV fleet grew faster than China's in 2020, region will lead in 5G subscriptions in 2022.
China will continue to dominate the sector.
5G fixed wireless access will be gradually
In 2020, 48% of all EVs on the road were in
deployed in 2022, especially for consumers
China, more than the combined total for the
US and Europe. in harder-to-reach areas in developing
However, in 2022, the growing gap countries, but increasingly for urban and
between supply and demand for lithium, as suburban consumers who are working from
well as other core battery raw materials, will home more often.
become increasingly challenging.
GlobalData predicts a mounting possibility Robotics
of a global battery shortage by 2025. In The robotics industry will be worth $568bn
response, miners of core battery raw by 2030, up from $45bn in 2020, according
materials will see an influx of deals and
to GlobalData. The robotics industry
investment and many automakers such as
comprises two main areas: industrial robots
Tesla will continue to lobby the US
government to waive tariffs on Chinese- and service robots. Industrial robots are
dominated battery materials such as used in factories to automate parts of the
graphite. manufacturing process and include caged
The cloud gaming market will reach industrial robots and cobots. Service robots
assist humans at work in non-industrial
revenues of $3bn in 2022, up 59% from
settings or in the home, and include
2021, according to GlobalData forecasts.
logistics, medical, consumer and field
Cloud gaming allows video games to be robots. Although the service robot market
streamed directly from the cloud and played was larger than the industrial robots sector
using any device with a display and an in 2020, the industrial robot market is set to
internet connection. Cloud gaming has the grow faster over the next decade.
An Investor's Guide
To West Africa
This investor's guide to West Africa is essential for anyone
establishing operations in Benin, Burkina Faso, Cabo Verde, Gambia,
Ghana, Guinea, Guinea-Bissau,
Côte d'Ivoire, Liberia, Nigeria, Senegal, Sierra Leone or Togo.
By Cathy Mullan and Naomi Davies
W est Africa has experienced a

surge in economic growth
since the early 1990s. Since
2000 its collective GDP has risen from
$105bn to more than $659bn in 2020.
However, there is a huge disparity
within West Africa, with countries such
as Guinea-Bissau, Liberia and Sierra
Leone among the poorest in the world.
Not only that but there is also increasing
The largest economies in the region – income inequality within many West
Nigeria, Ghana and Côte d'Ivoire – African countries with major gaps
accounted one-quarter of Africa's GDP between rich and poor, particularly
in 2020. when it comes to accessing education,
water and health services.
West Africa's Economic Big Hitters
N igeria is the largest

economy not only
in West Africa but
across the wider continent.
It accounted for 18.3% of
been largely dependent on
oil prices. The government
has repeatedly stated plans
to invest in infrastructure
projects to diversify its oil-
and public services.
Tourism is a key sector and
provides direct and indirect
employment for many
residents. This is likely why
total African GDP in 2020, dependent economy. Cabo Verde was one of the
the largest share of all Nigeria's GDP dropped by West African countries
countries. 3.5% between 2019 and hardest hit post-Covid. Its
2020, with Covid-19 having GDP contracted by 14%
Nigeria's a significant impact on the between 2019 and 2020.
GDP overtook that of South extractive sector.
Africa – once the Unemployment and After the start of the
continent's major players – inflation rates that were Covid-19 pandemic, Cabo
in 2012. In 2020, Nigeria's already on the rise pre- Ve r d e ' s g o v e r n m e n t
GDP was $432.29bn, while pandemic rose sharply in overhauled its Ambition
South Africa's came in at 2020. As a result, the World 2030 strategy, supported by
$301.92bn. Nigeria is Bank has warned that, the UN and focused on
already the most populous without substantial reforms, sustainable development.
African country and is the pandemic could send The plan seeks to diversify
expected to overtake the personal incomes back by the economy away from
tourism and develop sectors
US to reach 400 million four decades. According to
such as maritime trade,
people by 2050. the National Bureau of
ocean-based commerce,
Despite this, Nigeria Statistics, GDP grew by 5%
digital innovation, and the
faces stark economic in the second quarter of green and circular economy.
challenges. Its economy is 2021 but may not be enough
heavily reliant on the oil to make a meaningful Ghana
and gas industry, which impact as it is barely equal had the second-largest GDP
accounts for 90% of the to the country's population in West Africa in 2020.
total export volume and growth rate. Efforts have also been made
more than 80% of to diversify the economy
government revenues. Cape Verde into sectors such as digital
Nigeria produces 2.5 has the highest GDP per technology goods,
million barrels of crude oil capita of all West African automotive and ship
per day on average, making countries at $3,064 in 2020. construction as well as
it Africa's largest producer The island nation has been a hydrocarbons and industrial
and the sixth largest in in stable democracy since the minerals. Although rich in
the world. early 1990s and remains one natural resources such as
The country fell into of Africa's most developed cocoa, Ghana isn't
a recession in 2016, largely and democratic countries. dependent on one
due to low petroleum prices Despite few natural commodity. In addition,
and terrorist attacks on resources, Cape Verde has a Ghana became the fastest-
pipelines in the Niger dynamic, service-oriented growing economy in the
Delta. It returned to growth economy focused on world in 2011 due to a GDP
in 2018 but recovery has commerce, trade, transport rebasement.
However, the country has to deal with economy is heavily reliant on
many economic problems. Since January agriculture, which contributes 20% to
2016, the IMF has warned that Ghana is GDP and employs 78.6% of the labour
at high risk of debt distress. This has been force. The country is also highly
further aggravated following Covid-19, dependent on foreign aid. In May 2021,
with the government helping contain the the IMF Executive Board granted
pandemic and support the economy, but $14.4m to Gambia to support its recovery
at the cost of a record fiscal deficit. post Covid-19.
According to Renaissance Capital,
Ghana's interest payments as a Guinea
proportion of government revenues were was one of the few West African
50% in 2020, the highest in Africa. countries to grow its economy in the
wake of the Covid-19 pandemic. Its GDP
Côte d'Ivoire increased by 16% in 2020, going from
experienced the highest GDP growth $13.5bn in 2019 to $15.7bn. This is
among West African countries between connected to a strong 18.4% increase in
2011 and 2020 at a compound annual the mining industry in 2020 and growing
growth rate (CAGR) of 9.21%. After the Chinese demand for bauxite and
end of the 2011 political crisis, Côte aluminium, of which Guinea is a major
d'Ivoire's economy rebounded sharply, supplier.
culminating in a record $61bn in 2020. In September 2021, Lieutenant
The government has introduced policies Colonel Mamady Doumbouya, the
to encourage transparency and attract commander of the country's special
businesses including the 2016–2020 forces, overthrew President Alpha Conde
National Development Plan. It was in a coup, raising the political and
i m p l e m e n t e d t o d e v e l o p l a rg e operational risk for its natural resources.
infrastructure projects driven by the Nigeria has consistently been West
private sector. Africa's leading foreign direct
Following the end of its civil war, investment (FDI) destination since 2003,
Sierra Leone's GDP has been slowly attracting one-tenth of total African FDI
growing at a CAGR of 6.1% between in 2020.
2002 and 2020. The economy is heavily In 1995, the Nigerian Investment
dependent on mineral exploitation and Promotion Commission was established
can be described as 'a rentier state', in to encourage inward investment.
which most of its national revenues come Consisting of 27 governmental and
from the rent paid by foreign individuals parastatal agencies, the commission
or governments. helps reduce red tape for new businesses.
Foreign investors are generally treated
Gambia's the same as locals in Nigeria, including
GDP has increased steadily since 2014. access to tax incentives.
The country recorded the highest However, there have been periods
population growth in West Africa at of decline. FDI into Nigeria suffered a
2.9% in 2020, which can be attributed to significant drop between 2009 and 2010,
a rapidly falling mortality rate. Gambia's largely due to the insurgency of terrorist
organisation Boko Haram. Investment has One of the aims of Côte d'Ivoire's
fluctuated since, reaching a high of 78 2021–2025 National Plan of
projects in 2013, then declining year on Development is to facilitate private
year until 2018. This can be attributed to investment and improve economic
diminished demand for commodities and growth. Major reforms have been
fluctuating oil prices as well as political
implemented since 2017 to bolster
unrest.
political stability and encourage a healthy
Ghana attracted the second-highest
number of projects between 2003 and business environment. However, violence
2020 and the highest number of FDI surrounding the presidential elections in
projects per capita in 2020 (0.11). October 2020 could discourage foreign
Following the reintroduction of investors.
multiparty democracy in 1992, Ghana has Guinea-Bissau has struggled to
enjoyed increasing political stability. The attract FDI in recent years, with no inward
country has traditionally received FDI in FDI projects recorded between 2017 and
the oil and gas and agribusiness sectors but 2020. Guinea-Bissau is among the world's
has looked to branch out in recent years least-developed nations and one of the ten
with a focus on logistics, financial poorest countries in the world.
services and technology. The country has a long history of
governmental instability. Since gaining
In August 2020, the Secretariat of independence from Portugal in 1947, four
the African Continental Free Trade Area successful coups have been recorded and
officially opened in Accra, Ghana. The another 16 have been attempted, plotted or
government has also implemented alleged. The 2019 presidential elections
infrastructure development goals in line sparked political unrest when the defeated
with the UN's SDGs and the African candidate, Domingos Simões Pereira,
Union Agenda 2063. In May 2021, it contested the results alleging voter fraud.
outlined plans for three rail projects Umaro Sissoco Embalo eventually took
representing a combined $12.9bn to o ff i c e i n F e b r u a r y 2 0 2 0 . P o o r
attract private investment. infrastructure, widespread corruption, a
Côte d'Ivoire is the third most vulnerable legal system and high energy
popular FDI destination in West Africa. costs are also deterrents for potential
Since the end of political crisis in 2011, investors.
FDI project values have more than tripled All countries have experienced
from $697.9m to $2.54bn in 2019. Côte significant declines in FDI in light of
d'Ivoire ranks second only to Ghana when Covid-19, regardless of how successfully
analysing FDI data per 100,000 people, they attracted investment previously. Four
with 0.09 projects created. As a West African countries failed to attract
Francophone country, Côte d'Ivoire's key any foreign investment in 2020: Guinea-
investing countries are France and Bissau, Cape Verde, Gambia and Sierra
Canada. Leone.
Six Reasons to invest in Africa
The conversation about Africa is shifting horizons and return models that fit other
from one of “deficits” and “gaps” to one markets don't always work in there.
about opportunities, prospects, ventures Even the most experienced,
and creativity. That's not news to sophisticated companies can be forced
companies that have paid close attention to recalibrate, as Nestlé did last year
to the continent and invested there. The when it announced a 15% cut in its
fast growing youth population, the workforce across 21 African countries.
urbanization expected to drive over 50% Deficits remain. What's
of Africans to cities by 2050, and Africa's important is that investors now realize
formalizing economy are all well known. there is money to be made for those bold
These trends and other developments enough to help close the gaps. As that
have driven a half century or more of takes place, the promise of greater
growth in Africa, and will continue to do prosperity for Africans and African
so. businesses will be realized. Why is it a
It's important to acknowledge that good time to invest?
Africa tests an investor's patience. Time
Africa needs 'connectors'
M issing across much
of sub-Saharan
Africa are the roads,
rails, ports, airports, power
grids and IT backbone needed
lack of aviation agreements has
limited intra-African air
connections. Africa's lack of
efficient storage and
distribution infrastructure
aviation agreements has
limited intra-African air
connections. Africa's lack of
efficient storage and
distribution infrastructure
to lift African economies. This hinders businesses, hinders businesses,
lack of infrastructure hinders entrepreneurs and farmers. Up entrepreneurs and farmers. Up
the growth of imports, exports, to 50% of African fruit and to 50% of African fruit and
and regional business. vegetables spoil before vegetables spoil before
Companies that can connect reaching markets. reaching markets.
Africans and markets can There's a soft infrastructure There's a soft infrastructure
prosper. Sub-Saharan Africa is deficit, as well. Outside of
deficit, as well. Outside of
plagued by power outages – South Africa, the data and
South Africa, the data and
almost 700 hours a year on information critical to decision-
information critical to
average – sapping making by businesses is
productivity, adding cost and missing or hard to obtain – decision-making by
leaving businesses captive to credit and risk information, businesses is missing or hard
back-up and alternative power market data, consumption to obtain – credit and risk
options. Massive investment is patterns, you name it. Lessons information, market data,
leading to major upgrades and from Dubai and Singapore tell consumption patterns, you
expansion at African ports and us that once an infrastructure name it. Lessons from Dubai
airports, but much of Africa's race is on in a rapidly and Singapore tell us that once
growth potential depends on expanding market, being the an infrastructure race is on in a
in-country and intra-African first-mover is a significant rapidly expanding market,
road, rail and air connections. advantage for investors. being the first-mover is a
Roads and rail lines are sparse, over-burdened. A lack of significant advantage for
decrepit and over-burdened. A
African trade barriers are falling and

intra-African trade holds enormous potential
A frican trade barriers

are falling and intra-
African trade holds
enormous potential
With the 54-nation
countries. That could lead to
development in electronics,
machinery, chemicals, textile
production and processed
foods.
of goods for home markets and
export.
And an increase in local
beneficiation in the
commodities sector could be a
Continental Free Trade Area – As a first step, free trade driver of growth – processing
Africa's own mega-trade deal between and within the African local commodities (such as
– even the smallest African economic blocs would make a minerals, coffee, cotton) in
economies could see a lift. If huge difference. Africa's share country rather than exporting
duties are lowered and of global trade – a meager 3% –
incentives introduced, them in raw form. That said, it
can only increase if the will continue to be a challenge
manufacturers could see continent's commodity and
benefit from setting up for regions with poor power and
consumption-led economies infrastructure to compete as
production and assembly
operations in multiple African begin to produce a broad array global manufacturers.
CUSTOMERS Digital
ARE CHANGING transformation
W A
ith the growth of frica leads the world in
mobile adoption, which
Africa's middle
continues to offer the
class, we're biggest cross-sectoral economic
seeing development of new opportunities. Mobile payment
networks, pioneered in East Africa,
expectations. Educated, urban
opened the wired, global economy to
professionals are young, brand- poor, unbanked city and rural dwellers.
aware and sophisticated in terms of Companies such as Novartis are using
mobile communications to manage
their consumption. Retailers and
their supply chain; Olam has used
consumer brands want to anticipate mobile to reach out to new African
and drive buying preferences in suppliers and farmers. These mobile
initiatives have achieved huge
fashion, home and lifestyle
successes.
products, but they know they need
In 2014, Ethiopia set up a
international standard supply telephone hotline allowing small
farmers immediate access to advice
chains if they are to meet demand.
from agronomists, with over 3 million
The largest economic forces
calls done in the first six months of the
in Africa are small to medium pilot programme. Mobile is the area
where Africa has pushed beyond the
enterprises, working to meet this
boundaries in the developed world, and
new demand and competing with
African tech incubators are pushing to
global brands. innovate.
Africa is Diversifying
A frican economies are finally non-commodity areas where they can be
beginning to diversify beyond competitive. And they are packaging
commodities, though this is still themselves to appeal to a broader set of
in the early stages. Africa is seeing a investors. Recognizing they can no
returning diaspora that recognizes the longer count on growing investment
potential and opportunities in their own
from China, every country now has what
countries. This population supports local
are called “Investment Promotion
economic growth with their skills and
talent, by acting as “first movers”, Agencies”, which act as one-stop shops
investing back in their communities. for investors, assisting with registration,
At the same time, African taxes, and other steps to establish
countries are beginning to place bets on companies locally.
Africa can lead in sustainable development
I
n energy, technology, supply Business leaders are hungry for
chain design and other areas, vibrant new markets and consumers
Africa has the ability to look at know the reality: globalization
what works elsewhere then fashion means there are too few remaining
its own answers. It can openly frontiers. As the developed world
embrace new technology and ideas, matures, and becomes increasingly
with no historical imprint from which difficult to trade in as a result of
to break free. It can develop flexible factors from legislation to terrorism,
fuel grids that generate power with a opportunities for corporate growth
mix of abundant wind, solar, hydro are limited.
a n d b i o e n e r g y, a l o n g s i d e There are too few places where
conventional fuels such as oil and entrepreneurs and businesses with
gas, which are also abundant. ideas and an appetite for risk can
Nowhere on Earth is there as much bring value and find long-term
unused or poorly used arable land, so growth if they are persistent, creative
look for big agricultural and determined. But there's
breakthroughs and productivity gains something else they know: Africa is
in food production in Africa. still such a place.
FINTECH
Caught between banks and online shopping:
Fintech predictions for 2022.
T
h e f i n t e c h fintech industry experts G l o b a l D a t a ' s
industry has to get their predictions Technology Intelligence
g r o w n on what to expect in the Centre highlights that
tremendously over the year to come. there have been 2,202
past few years at a Fintech companies, who deals worth a total of
breakneck pace that has operate in the space $81.02bn to date in 2021
only been accelerated by between the financial in the financial services
Covid-19. With 2022 at and technology realms, industry, up from 1,449
the door, InvestAfrica have surged in the past deals worth $17.85bn in
Magazine spoke with six years. Data from 2015.
T he coronavirus arguably accelerated the
growth of the sector. There's no secret to
why that is. During the pandemic, the
demand for digital payment solutions grew
from both people and businesses. Fintech
$166bn by 2023, according to 'GlobalDatas
thematic research.
Swedish Klarna provides the clearest
example of the sector's growth. In June 2021, it
became Europe's most valuable privately-
companies are simply supplying to this demand owned tech company following a $639m
and as the predictions below will outline, they funding round that took its valuation to
are poised to do so in a big way. $45.6bn. That was up from the $31bn valuation
The general public abandoning physical the fintech had achieved in March following a
cash is a clear sign of the digitalisation of $1bn funding round.
money. In Norway, only 4% of all transactions A similar push towards more digital
were cash-based in 2020. In the UK, that figure services can be seen in the world of banking.
was 17%, down from 70% in 2010. Open banking, the catch-all term for a way to
Some of the fintech experts offering
share financial data between organisations, has
their predictions to InvestAfrica Magazine
such as Square's Kaushalya Somasundaram also grown during Covid-19. Several of the
have not only seen this evolution first hand, but experts offering their fintech predictions
are confident that it will continue long into the believe the industry is only set to grow from
next year and beyond. here.
Although, some fintech predictions, like
Fintech predictions about more than cash those offered by Ivan Zhiznevskiy, CEO of 3S
The move towards the cashless society is Money, include sentiments that the industry has
inimitably linked to shoppers migrating in lost its way in the pursuit of unsustainable
droves to online stores. Ecommerce has grown unicorn valuations. Instead, he's hoping that
extremely popular during the coronavirus 2022 will be the year the industry focuses on
crisis. Unsurprisingly, several fintech experts getting back to basis. He has levied similar
Verdict has spoken with for these 2022 attacks in the past.
predictions believe this trend is only set to Whether or not you believe fintech deals
grow. have ballooned out of proportion, most
Other fintech predictions include the predictions make it clear that this sector will
massive growth of the buy-now-pay-later continue to influence industries and the general
(BNPL) sector. The BNPL industry has public for years to come. Hopefully, these
enjoyed explosive growth over the past few fintech predictions will help you stay abreast of
years. The global sector is expected to be worth what's to come.
Kaushalya Somasundaram, Head of UK Jaimini Pattani
p ayments partnerships and industry

relations, Square
The fintech industry has continued to

evolve this past year in both flexibility and
s enior analyst financial services
division, GlobalData
In fintech, we have seen new trends

conquer the financial services world,
inclusion, and even more so since the onset from AI to open banking and financial
of the Covid-19 pandemic. In 2021, we literacy to financial well-being. Financial
found that the number of businesses services providers have been quick to
accepting payments through cashless adapt to the changes in consumer
methods, such as online, nearly doubled behaviour driven by lifestyle changes
from the year prior. Digital payment tools from the pandemic, and fintechs have
not only allowed an increase in scalability, managed to leverage technology to
but also facilitated financial inclusion by conduct banking activities. As a result,
helping more businesses to continue we will likely see some trends rapidly
playing an active role in the economy, even evolve further in 2022. Two trends on the
during the pandemic. rise are BNPL integration and enhanced
In 2022, businesses are set to personalisation through changes in open
continue the contactless trend, offering banking.
their customers safety, speed and Let's start with. BNPL integration.
convenience; whilst also finding new ways
The BNPL market has boomed in the past
to grow and reach new audiences. We also
year or so, with the likes of Klarna and
expect businesses to pursue an accelerated
drive towards digital fintech initiatives and
Afterpay taking the markets by storm and
tools in order to access new revenue launching super-app style services and
streams. Our recent Future of Retail report banking products. Towards the end of
uncovered that 71% of retailers are looking 2021, UK banks such as Monzo and
to inventory management technology to Virgin Money have been seen to
improve supply chain efficiency, incorporate such services into their retail
demonstrating a continued investment on banking offerings but through different
solutions through technology. business models. For example, the
If the past few years have taught us Monzo offering, unlike Klarna, can affect
anything, it is that an innovative and open credit reports, thus making banking
mindset, coupled with the right digital options less attractive to consumers.
tools can help businesses regardless of However, it is apparent that regulation in
their size or industry to continue their the BNPL is tightening and the
growth, even in uncertain times.
crackdown is likely to increase further in
2022. With regulation tightening, we will
likely see other banks replicate BNPL
concepts and enhance their services to
meet consumer demand, especially in
ecommerce.
So, in 2022, we expect to see banks take on
more BNPL firms to increase revenues
and adapt to customer preferences around
fees and interest payments. Francesco Simoneschi, CEO and co-founder
Personalisation through open

banking is another important trend to keep
an eye on. Open banking has been a much
talked about topic with consumers across
T rueLayer 2022 will see open
banking continue its disruption of
traditional payment methods.
Amazon's decision to stop accepting Visa
credit cards in the UK is more than a
the globe using open banking products in
negotiation tactic, it's further evidence
their everyday lives. Open banking is how that in a world of instant payments and
banks share financial data and services to borderless commerce, cards have reached
get enhanced insights into customer their expiry date. For years, they have
behaviour to provide more personalised been retrofitted into online checkouts,
services and real-time insight to help creating an invisible web of hidden costs
people spend and save smarter. and unwieldy payment structures.
The 2021 GlobalData Financial The commercial impact of this
Consumer survey data shows that inefficiency also cannot be overstated
consumers are willing to share data if it when it comes to the customer experience.
holds out the possibility of better money How often have you tried to buy
something only for the card to not be
management and better personalisation.
accepted – whether through mistyping
Since the pandemic, consumers expect a details or a fraud block? The risk of
certain level of personalisation from the customer drop-off at the checkout is high
services they use. From Amazon to and impactful.
Netflix, and a vast number of other brands, Ecommerce is creating huge
they are all used to 'because you demand for experiences that are quicker
watched/bought X, we thought you might and more cost effective. Account to
like to watch/buy Y.', and thus there is now account payments through open banking
the need for this to translate across to are the necessary next step in that
banking products and services. evolution, moving money at a fraction of
The next most significant trend we the cost to the merchant and more securely
and more conveniently for the customer.
are likely to see is banks further leveraging
In 2022, more merchants will implement
open banking for a better real-time, these payments into their checkouts,
personalised service to drive more taking open banking out of the world of
competition in the market through fintech and into the mainstream, replacing
collaboration between the larger legacy cards as the primary payment option.
banks and fintech's.
Michael Vanaselja, founder and CEO, Keebo Neha Mittal, interim CEO of Divido
O
ne of the most important
and valuable changes for
fintech in 2022 will be
I n 2022, the big story for retail finance
will continue to be the global
regulatory reform of the BNPL
space. Over the course of this year, the
Financial Conduct Authority (FCA) has
personalisation. Across other actively been driving its agenda through
a series of announcements and proposals
industries we have seen designed to shake up the unregulated
BNPL market. Regulation is coming and
personalisation becoming more it brings plans for 'delivering better
outcomes in consumer credit'.
widespread for consumers. However, The proposed changes mean that
I think it takes longer for fintech to any BNPL finance product not currently
within scope of the Consumer Credit Act
get to the same place, e.g. because of (CCA), credit provided for a period of
less than 12 months and with 0% APR,
the importance of customer will be regulated. At Divido, we welcome
protection and regulation. We're at a these changes.
Straight up, companies will have
stage now where real human to put the customer first, as requirements
to increase focus on consumer outcomes
experience will start to transform the and needs, especially those in vulnerable
circumstances, becomes the order of the
industry. At Keebo, our focus is to day, through the FCA's proposed
make accessing credit and credit Consumer Duty.
Established lenders could take
building personal, relevant and back the advantage from the unregulated
meaningful for people by using their fintechs, where they already have years
of experience operating with high
unique open banking data to deliver it standards of consumer protection. This
a better a more personalised has the potential to change the game.
Where new market entrants have forged
experience. ahead, taking advantage of a regulation-
free market, they will now have to wrestle retailers seeking responsible lending,
with regulatory reform, which could come whilst maintaining control of customer
as a major set-back – especially for the data and brand experience. They care
smaller firms. deeply about brand association.
Further, profitability will come The impact of regulatory change on
under pressure especially for business the business models of the new market
models based largely on affiliate entrants in the BNPL space will be
marketing. At Divido we see large profound.
implement open finance, so the

ecosystem can deliver and capitalise on
the opportunities it can bring. The CMA
is also set to publish an update on the
future framework for open finance at the
start of the year. Hopefully, we will start
to see more and more third-party
providers educate consumers and
businesses on the benefits it can bring
and help abolish misconceptions behind
too much data sharing. And we'll see this
unfold globally. Joe Biden's 2021
Executive Order is a clear example of the
Maria Palmieri, Head of Public Policy, Yapily industry moving in the right direction.
We're also going to see an
T he number of open banking

adopters is set to increase. Covid
made it abundantly clear that
SMEs need real-time insight into their
financial position to forecast cash flow
explosion of new payment use cases in
2022. New players are coming to the
market at speed and competition is
fierce. Europe must move fast and push
forward quickly with initiatives, like the
and consumers need greater oversight of
their personal finances to stay in good European Payments Initiative and the
financial shape. It's predicted that 71% of proposed digital wallet, to stay ahead of
SMEs along with 64% of adults are the game.
expected to be open banking adopters by The use of open banking in lending
2022, and by 2024 users worldwide will decisions is another trend to watch out
reach 63.8 million. But this is only the for next year. New lending providers are
beginning. The true opportunity is open taking the industry by storm using the
finance which we'll slowly but surely see initiative to better their services – more
unfold next year. than 17 million people have now used
I predict regulators will work more BNPL. Ease of access to credit means
closely with national governments to more affordability and creditworthiness
come to a consolidated approach to checks which can be done seamlessly.
Ivan Zhiznevskiy, CEO, 3S Money Daniel Kjellén, CEO and founder, Tink
I nvestment in fintech was at an all-

time high in 2021. We've witnessed
frankly ridiculous figures – stand out
examples include 'TrueLayers $1bn
valuation and Varo Bank's $510m Series
O
pen banking is at an exciting
crossroads. We're seeing the
market go from building PSD2
compliant APIs to exploring the many use
cases of open data. This means there is
E funding. Both are shocking. All this huge potential for innovation as previously
epic growth in investment has caused closed data sets become available to be
fintechs to lose focus, with many utilised for new purposes for the benefit of
transfixed on bagging all the investor businesses and consumers.
cash they can to achieve 'unicorn status'. One of the most interesting open
What I'd like to see in 2022 is banking use cases is the ability to enable
lenders to get a fairer and more holistic
fintech's demonstrating business
understanding of an individual's financial
profitability by providing genuine value
position. This will help them make more
so that their customers start paying for
informed choices about credit decisions,
their services. Not investors. They
opening up credit to more people, and
cannot continue to feed into start-ups enhancing risk management by making it
forever. easier to detect possible risk factors from
The impact of COP26 will also data insights.
play a huge role in the landscape next Finally, the green agenda is only
year. The UK government is demanding going to become more important. I firmly
banks and financial institutions police believe consumers and businesses want to
customers, to ensure no one is servicing do more to meet their environmental and
anyone involved in fossil fuels. While a social obligations. The key question is how
great idea in theory, it means more do we empower them to do that? The
compliance, more policing functions financial services industry does have a
and, ultimately, customers will suffer. solution. It can build better products that
Instead of focusing on lobbying groups offer everything from greener loans and
and fossil fuel companies directly, the mortgages to checking accounts with
government is outsourcing their pledges. carbon-tracking features built into mobile
And its banks and financial institutions apps. By harnessing data, banks and
who are going to pay the price. More fintechs can become the agents of positive
questions mean less trust with customers. environmental change.
Rolands Mesters, co-founder and CEO, Nordigen James Allum, VP and head of Europe, Payoneer
I T
n the UK, open banking has reached he battle lines are being
four million users in the three years
since its inception. In 2022, I predict
drawn between open
the user count will double across all b a n k i n g a n d
countries, and reach eight million in the
cryptocurrencies the debate is set to
UK. Open banking allows free
movement of customer financial data, heat up further in 2022. More
provides opportunities to financial
companies will turn to new
service providers, and offers autonomy
to end users. compliance and regulation
The growth of open banking has
technologies to keep customers safe
been accelerated by a natural shift to
digital, modernisation of the financial and improve their customer
sector, and the pandemic. Customers are
experience.
making more payments and purchases
online rather than in person, making As they become more mature,
physical bank cards almost obsolete and
fast-growing fintechs will shift from
solutions like BNPL are leading the way
for open banking. focusing on customer acquisition to
I believe open banking will
improving their margins throughout
continue to develop in 2022, and I
believe someone will launch the first their operations. The larger fintechs
free open banking payments platform to
listed on public exchanges, e.g., Wise,
facilitate the growth of open banking.
The uptake of open banking will level Payoneer and PaySafe, will become
the playing field for fintech startups and
more confident operating as a public
increase financial inclusion for users,
resulting in a better overall experience company and more vocal about their
for all participants of the fintech
ambitions.
industry.
Jed Rose, GM EMEA, Airwallex Jamil Ahmed, Director, Solace
E mbedded finance is not a new

concept, but the era of embedded
finance has considerable
momentum due to recent advances in
the industry. This is being driven by
A s online shopping increases, so
does payment processing
volume. Consumer behaviour
has already been changing over the past
few years to more frequent use of
many factors which will continue into
2022: changing consumer expectations payments cards, while the transaction
as more people use online services, amounts themselves be of smaller
Covid-accelerated digital value. Covid only just accelerated that
transformation, the rise of alternative change further when physical stores
financial services providers and more also favoured cashless point of sale,
brands investing in their online adding to online shopping processing
presence due to tough market volume.
competition.
An identical impact to stock and
Like today's consumers,
businesses want and need a seamless order management is also being seen
payment experience. Embedded with shoppers checking out more
finance was designed to streamline the frequently with shopping baskets
entire financial process for consumers, containing less items, versus collecting
while also creating significant up towards a single large checkout. All
operational efficiency gains for the intermediaries, from banks to e-
businesses. With embedded finance, commerce giants, that make a
businesses can create a holistic
transaction possible need to meet these
experience for the end user and
customers can easily send and receive high demands of the modern hyper-
money in near real-time while usually consumer by upgrading systems to keep
saving up to 80% in transfer costs pace with the volume growth. In order
versus fees charged by high street to overcome a bombardment of online
banks. payments and orders, big retailers will
We'll see more organisations have to enhance IT systems with event-
switching to more efficient financial driven architecture to ensure processing
services in 2022, particularly as
can be accurate and timely, to complete
businesses prioritise customer
experience and loyalty to maintain and fulfilment that doesn't disappoint
grow market share. consumers with errors or delays.
alone and globally, in the last three months,
33% of all total new unicorns have been
fintech-focused. We've also seen a huge
number of fintech IPOs as well as influential
M&As. The growth opportunity for fintechs
is greater than ever but has made market
competition hotter, the challenge for
fintechs this year has been standing out and
prioritising customers.
I've long been a believer that fintech
should make the world a better place but
what's been really unique about 2021 is the
growth of 'green fintechs' or 'fintechs for
good'. Next year, I expect to see many more
Ann Maya, General Manager, Boomi solutions that prioritise financial well-being
and allow people to make more sustainable
T aking the leap into mobile and

remote friendly processes that
impact employee and customer
interactions will continue to make
companies more competitive. Giving a
choices with their money, for example by
showing the carbon footprint of their
spending.
We're going to see the fintech and banking
world adopt the 'Netflix effect in 2022'
better user experience is no longer a Modern consumers want an
cosmetic benefit, it will make or break experience where banks and fintechs can
companies in every sector. think on their behalf and like Netflix,
provide automatic recommendations based
on the individual. The burden of finance is
increasingly moving away from the
customer to the latest tech which can
automate the 'busy work' of managing
personal finances and actually help
customers with their overall financial well-
being. This development doesn't hinge on a
single technology but a combination of
technologies together that use data to
understand customers on a deeper scale.
I'm also excited to see how
technology starts to democratise wealth
management by helping people with their
investments and trading. There are currently
Dorel Blitz, millions of underserved customers who
don't have the means for their own financial
V P Strategy & Business

Development, Personetics
2021 has been defined by record-breaking

growth. In the UK, investment into fintech
advisor who will benefit from a hybrid
model where data is helping relationship
managers make more informed decisions
and open up wealth management to a larger
audience – just like
hit £17.7bn in the first half of the year Robinhood has expanded retail investing.
FDI FORECASTS AND TRENDS
TO WATCH IN 2022
Greenfield FDI is expected to grow by approximately 6% in 2022 after getting back to pre-
shock levels in 2021, but which sectors and countries will be the key beneficiaries or
drivers of this growth?
By Glenn Barklie
G reenfield foreign direct business world is hopeful that it will not

investment (FDI) is expected to experience any other lockdown scenarios
grow by approximately 6% in comparable with those that heavily
2022 after getting back to pre-shock levels impacted FDI project volumes in 2020.
in 2021, according to GlobalData's FDI Which sectors will drive FDI?
forecasting model. Life science sectors will continue to grow
Greenfield FDI volumes are expected as the focus to develop more effective
finish 2021 at a similar level to that of vaccines and treatments for Covid-19
2019. That is a 20% increase on 2020 continues. Additionally, companies should
numbers. invest further to combat the next potential
Investors have adapted well to the chaos pandemic. We foresee FDI in the biotech
created by Covid-19. Although recovery and healthcare sectors growing by 15%
speed differs by country and sector, in and 10%, respectively, in 2022.
general investors are in an optimistic Pharmaceuticals will, however, remain the
mood. New variants of Covid-19 such as largest life science sector with FDI
Omicron, which at the time of writing is in growing by about 7%.
its infancy, may dramatically shift growth The sectors that bore the brunt of the
predictions. However, with continued lockdowns in 2020, such as aerospace,
vaccination and booster programmes, the construction and real estate, leisure and
entertainment, and tourism, are expected to Software and IT services will continue to be
return to positive growth. Although the the largest FDI sector in terms of project
threat from Covid-19 remains, and there is numbers. The continued rise of global
not quite a return to 'normal', regulations are digitalisation, smart cities and new
allowing these sectors to reopen and interest technologies ensure the sector's continued
in investments should pick up. growth. Fintech and AI (the latter with a
Non-renewable energy investments market value expected to treble by 2025)
are expected to fall marginally year on year should be notable growth subsectors.
in 2022 and continue their overall Growth in electronics FDI is
d o w n w ar d tr en d . R en ew ab le an d predicted to be driven by increased demand
alternative power FDI is expected to rise for batteries, particularly for electric
further, after what will be a record year for vehicles and semiconductors. The global
investments in 2021. Electrification and chip shortage has impacted several sectors,
decarbonisation will be high on the agenda and companies will take steps to ensure
of most governments in 2022 following the production can keep pace with demand.
COP26 meeting in November. This should Companies such as Intel have committed to
be reflected in favourable opportunities for building chip plants in Europe in the coming
companies to further invest in establishing years.
renewable operations.
Developed Economies Prosper,

Developing Economies Play Catch-up
The top five FDI destination countries in the world are expected to remain the same.
The US, Germany, the UK, India and China are all expected to see positive growth in 2022.
Some of the biggest winners could include Colombia (dependent on government elections),
Ireland (if it continues to attract projects that would have gone to the UK in a pre-Brexit landscape)
and Portugal (particularly if the tourism sector gathers pace).
R egionally, Central America and the

Caribbean is expected to see the
largest growth (7.5%) of any world
region. This is amid the projected recovery
of the tourism sector, which is of upmost
19 vaccine roll-outs started much earlier.
Western Europe and Asia-Pacific will
account for approximately 58% of all
inbound FDI in 2022.
In terms of outbound FDI, the five
importance to the region. Countries in
Central America and the Caribbean were largest countries – the US, the UK,
heavily impacted by Covid-19 and Germany, Japan and France – will account
experienced the largest decline in any world for 43% of total outbound FDI in 2022. Of
region in 2020. Even with very strong these countries, Japan is projected to see the
growth in 2022, the region will still fall short largest increase in outbound FDI, about 7%.
of its 2019 project volumes. Other Asian countries expected to see
Developed countries will continue to significant increases in outbound FDI levels
grow more quickly than developing include China (12%), Singapore (12%) and
countries, particularly because their Covid- South Korea (14%).
M&A, ESG and cautious optimism in 2022
G reenfield FDI is expected to

grow at a slower rate than M&A.
According to GlobalData's deals
database, the volume of M&A deals for
2021 (up to the start of December) had
investment attraction perspective, there
will be even more onus on attracting
companies that are publicly showing and
working towards achieving ESG goals.
Failure to do so may result in public
already exceeded the total for the full backlash. From a corporate perspective,
year of 2020, representing an increase of companies that are looking to invest
almost 13%. We expect M&A deals to abroad should be mindful of local
grow by about double the rate of regulations that can either help or hinder
greenfield FDI in 2022. Large their ESG goals.
multinational companies (MNCs), in There is a determination from
particular, are able to flex their muscles businesses to return to normal. Covid-19
by acquiring businesses during times of has had many detrimental effects, but it
economic uncertainty, and in the short has also created some opportunities.
term afterwards. Businesses have had time to develop new
Environmental, social and strategies, and take into account new
corporate governance (ESG) will ways of working and the push towards an
become the key theme discussed at the evermore digitalised world. We remain
senior management level across the cautiously optimistic that FDI can see
majority of MNCs in 2022. From an another year of growth in 2022.
FOUR WAYS ARTIFICIAL INTELLIGENCE

IS IMPROVING MENTAL HEALTH THERAPY.
M ental health professionals are

using artificial intelligence
(AI) to improve the accuracy
of diagnosis and treatments. Therapists
are turning to AI to help with stretched
disorders say there's been an increase in
demand for treatment since the start of
the pandemic, according to a survey by
the American Psychological
Association. That's up from 74% a year
workloads. 84% of psychologists have earlier.
seen a rise in demand for anxiety Already used in many industries,
treatments. it is becoming clear that the use of AI
The technology is helping with within mental health services could be a
the quality control of treatment and the game-changer for providing more
training of therapists. Upended by a effective and personalized treatment
global pandemic, the healthcare sector plans. The technology not only gives
is finding new ways to adapt quickly more insight into patients' needs but
and safely. For many, technology has also helps develop therapist techniques
been the key. and training.
In the field of mental health, 84% Here are four ways that AI has
of psychologists who treat anxiety improved mental health therapy.
Mental health professionals report increased workloads
since the start of the pandemic as demand for therapy soars.
Image: American Psychological Association
KEEPING THERAPY STANDARDS HIGH WITH QUALITY CONTROL
W ith an increased language processing (NLP) - with the tools to better

demand for a technique where machines understand the words spoken
services and between therapists and
process transcripts. The
workloads stretched, some
clinic aims to provide clients. In the UK and US,
mental health clinics are
therapists with a better software company Lyssn
investigating automated
ways to monitor quality provides clinics and
insight into their work to
control among therapists. universities with a
ensure the delivery of high
The mental health clinic Ieso technology designed to
standards of care and to help
is using AI to analyze the improve quality control and
trainees improve.
language used in its therapy training.
Technology firms have taken
sessions through natural- note and are providing clinics
REFINING DIAGNOSIS AND
ASSIGNING THE RIGHT THERAPIST
A I is helping doctors to spot

mental illness earlier and to
make more accurate choices in
treatment plans.
Researchers believe they can use
Technology Review. Furthermore, AI
research can hone patient diagnoses
into different condition subgroups to
help doctors personalize treatment.
U t i l i z i n g A I t e c h n o l o g y,
insights from data for more successful therapists can sift through large
therapy sessions to help match amounts of data to identify family
prospective clients with the right histories, patient behaviours and
therapists and to figure out which type responses to prior treatments, to make a
of therapy would work best for an more precise diagnosis and to make
individual. more insightful decisions about
“I think we'll finally get more treatment and choice of therapist.
answers about which treatment Machine learning a form of AI
techniques work best for which that uses algorithms to make decisions –
combinations of symptoms,” Jennifer is also being harnessed to identify forms
Wild, a clinical psychologist at the of post-traumatic stress (PTSD)
University of Oxford told the MIT disorder in veterans.
MONITORING PATIENT PROGRESS AND

ALTERING TREATMENT WHERE NECESSARY
O
nce paired with a therapist, therapists. In a recent paper, the team
there is a need to monitor identified “change-talk active”
patient progress and track responses uttered by clients, such as “I
improvements. AI can help identify
don't want to live like this anymore”
when a treatment change needs to take
and also “change-talk exploration”
place or if it's time for a different
therapist. where the client is reflecting on ways to
For example, Lyssn's uses an move forward and make a change.
algorithm to analyze utterances The team noted that not hearing
between therapists and clients to reveal such statements during a course of
how much time is spent on constructive treatment would be a warning sign that
therapy versus general chit chat during the therapy was not working. AI
a session to make improvements. transcripts can also open opportunities
The team at Ieso is also looking to investigate the language used by
successful therapists who get their
into utterances during sessions,
clients to say such statements, to train
focusing just on patients rather than the other therapists in this area.
JUSTIFYING COGNITIVE BEHAVIOURAL
THERAPY (CBT) INSTEAD OF MEDICATION
T he use of drugs as a treatment

for mental health issues like
depression has increased. The
number of patients in England that
were prescribed antidepressants in the
AI can help validate CBT as a
treatment, according to researchers
from Ieso. In a paper in the JAMA
Psychiatry, the researchers used AI to
discern phrases used in conversations
third quarter of 2020-2021 rose 23% between therapists and patients.
compared with the same quarter in CBT aims to identify negative
2015-2016, according to the NHS. thought patterns and to find ways to
However, the UK's National break them, meaning therapists use
Institute for Health and Care statements to discuss methods of
Excellence (NICE) recently updated change and planning for the future.
The researchers concluded that having
its guidelines to encourage the use of
higher levels of CBT chat in sessions
CBT before medication for cases of instead of general chat correlated to
mild depression. better recovery rates.
MENTAL HEALTH, DIGITAL

What is the Forum doing to ensure the safety of digital mental healthcare?
I mprovements outside of the clinic
Another avenue where AI is improving

mental health therapy is wearable
improve systems, it also opens up the
potential for misuse and mistreatment.
As a way of guarding against this
risk, the World Economic Forum
launched a toolkit to provide
governments, regulators and
technologies.
independent assurance bodies with the
In conjunction with in-clinic means to develop and adopt standards
sessions, therapists are using and policies that address the ethical
technologies like the Fitbit to determine concerns relating to the use of disruptive
ways to improve treatment. For example, technologies in mental health.
mental healthcare providers can monitor “In mental health, trust is more
a patient's sleep patterns with a Fitbit than the mitigation of risks of unethical
instead of relying on them to give and malicious uses, it is working with
accurate reports. communities to act responsibly,”
The long-term efficacy of AI in Stephanie Allen from Deloitte and
mental health therapy is yet to be Arnaud Bernaert, the Head of Global
thoroughly tested, but the initial results Health and Healthcare at the Forum
wrote in a report. “Not only is this the
appear promising. start of that journey – which will not be
While the use of AI within the mental easy – but we have a clear medical, moral
health ecosystem offers opportunities to and economic imperative to do better.”
The dilemma: How can Africa industrialise and reach net zero?
Alleviating poverty and improving access to electricity and 'clean
cooking’
are bigger priorities for most African countries than reaching net zero.
By Jason Mitchell
A man walks by the towers of the coal-fired Rooiwal Power Station

on the outskirts of Pretoria, South Africa.
(Photo by Michele Spatari/AFP via Getty Images)
A frica's greatest
challenge is how to
industrialise but not
increase carbon emissions
significantly at the same time
World Bank (in the US it was
15.52t and in Australia 17t).
Africa's total population is
around 1.3 billion people
in sub-Saharan Africa
(excluding South Africa) is
180 kilowatt-hours (kWh),
compared with 13,000kWh
compared with China's 1.4 in the US and 6,500kWh in
otherwise, hundreds of billion, but China's total Europe. Around 900 million
millions of people will be carbon emissions are ten to Africans also lack access to
condemned to a life of 14 times higher than Africa's. 'clean cooking', the use of
poverty. The reality is that many modern stoves and fuels.
The whole of Africa accounts African nations are already at Agriculture, forestry and
for only 2–3% of the world's net zero. More than 640 other land use accounted for
CO2 emissions from energy million Africans have no 57% of Africa's total carbon
and industrial sources, a c c e s s t o e n e rg y, emissions in 2016
according to the UN. It is corresponding to an (agriculture was at 21% and
roughly the same proportion electricity access rate of just land use change and forestry
as Germany and a lot lower over 40%, the lowest in the at 36%), up from 45% in the
than China (27%), the US world, according to the year 2000, according to the
(15%) and India (7%). African Development Bank AfDB. Energy made up 36%
Africa's per capita emissions (AfDB). Globally, around of emissions in 2016, down
of CO2 were 0.76 tonnes (t) in 87% of the population have from 49% in the year 2000.
2018 compared with 4.4t access to electricity. Per Wa s t e a n d i n d u s t r i a l
globally, according to the capita consumption of energy processes each made up 4%
of emissions in 2016 (up from 3% each in over much of the continent – and with
the year 2000). predictions that temperatures will rise
In 2018, electricity demand in Africa further – it is facing a wide range of impacts,
was 700 terawatt-hours (TWh) and the including more frequent droughts and
North African economies and South Africa floods. The UN predicts that climate change
accounted for more than 70% of the total, will contribute to decreases in food
according to the International Energy production, floods and inundation of its
Agency (IEA). In North Africa, gas already coastal zones and deltas, the spread of
meets around half of the sub-region's energy waterborne diseases and the risk of malaria,
needs, but in sub-Saharan Africa gas only and to changes in natural ecosystems and
the loss of biodiversity in the near term.
makes up approximately 5% of the energy
Total available water in the large
mix. basins of Lake Chad and the Niger and
At 39%, natural gas constituted the Senegal rivers has already nosedived by
biggest element in Africa's electricity 40–60% and many climate models project
generation mix in 2019, followed by coal declining mean precipitation in the already-
(29%), hydro (15%) and oil (10%), dry regions of southern Africa.
according to the African Energy Chamber "Certainly, carbon emissions will
(AEC). While nuclear energy accounted for rise in Africa [during the next ten years]
another 2%, the share of renewables in the particularly amongst fossil fuel-producing
mix (5%) is growing, albeit at a slower pace countries," says Dimieari Von Kemedi,
than in other regions. Most renewables managing director of Alluvial Agriculture, a
growth came from solar, wind and block farming start-up based in Nigeria.
geothermal power plants and is expected to "They will want to utilise cheaper sources of
continue into 2030. Africa had 830MW of energy and buy up the internal combustion
geothermal, 5,748MW of wind and engines other countries will be phasing out."
7,236MW of solar installed capacity in He adds that higher carbon emissions from
2019, increases of 17.4%, 26.1% and fossil fuels will be necessary for the
60.2%, respectively, since 2010. industrialisation and urbanisation of many
Fossil fuels will power two-thirds of African economies because of the
Africa's electricity in 2030 comparatively higher cost of clean energy.
The Oxford Smith School of Enterprise and "African countries will come from
the Environment (OSSEE) forecasts that behind and with time build capacity to
the share of non-hydropower renewables in invest in clean energy," he says.
African electricity generation will likely "Renewable industry is critical for Africa.
remain under 10% by the year 2030. It Much of global growth over the next 50
predicts that fossil fuels will account for years will happen in Africa and this will
two-thirds of all generated electricity across need energy, including nuclear energy."
Africa and a further 18% of generation will Galina Alova, a researcher at the
come from hydropower projects by the end OSSEE, said in a recent report: “Africa's
of this decade. electricity demand is set to increase
Only two African countries ,South significantly as the continent strives to
Africa and Malawi have pledged to reach industrialise and improve the well-being of
net zero by the year 2050. Egypt has its people, which offers an opportunity to
committed to ensuring that between power this economic development through
30–40% of its energy mix is renewable renewables. There is a prominent narrative
(solar and wind) by 2035 and is on track to in the energy planning community that the
meet this target. continent will be able to take advantage of
its vast renewable energy resources and
Africa is the region of the world most rapidly decreasing clean technology prices
vulnerable to the impact of climate change, to leapfrog to renewables by 2030, but our
according to the UN. Already experiencing analysis shows that overall it is not currently
temperature increases of roughly 0.7°C positioned to do so.”
Africa requires energy to reduce poverty
Africa needs energy to drive its global average of 2%, according to the African continent in the
economic growth and to reduce Frost & Sullivan Africa, a research year 2040. The UN estimates
poverty the big question is where company. In 2020, 472 million that 660 million people will
will that energy come from during people lived in African cities and still lack access to electricity in
the next ten to 20 years? How this number is expected to jump to 2030, most of them in sub-
Africa meets its growing energy 810 million by 2035. This is the Saharan Africa.
needs is crucial for the region's equivalent of adding a city the size The 20 countries with
economic future. of Lagos to the region every year the worst rates of access to
Sub-Saharan Africa's for the next 15 years. clean cooking account for 81%
population is growing at 2.7% a Growing urban populations of the global population
year, more than twice as fast as mean rapid growth in energy without access to clean fuels
South Asia (1.2%) and Latin demand for industrial production, and technologies. Of these 20
America (0.9%). The number of cooling and mobility. With the countries, ten are located in
people in the region is expected to growing appetite for modern and sub-Saharan Africa: the
almost double to 2.5 billion by efficient energy sources, Africa is Democratic Republic of the
2050. In Nigeria, the continent's also expected to emerge as a major Congo, Ethiopia, Ghana,
most populated country today with force in global oil and gas markets. Kenya, Madagascar,
around 205 million people, the The IEA expects the global Mozambique, Niger, Nigeria,
population is forecast to double to population without access to Tanzania and Uganda.Among
around 400 million by that year. energy to become increasingly these countries, the
Africa is also the fastest- concentrated, with 90% of those Democratic Republic of the
urbanising region in the world with globally without access to Congo, Ethiopia, Madagascar,
an average annual urbanisation electricity and almost 50% without Mozambique, Niger, Tanzania
rate of 3.2%, well ahead of the access to clean cooking living on and Uganda had less or equal
Only 7% of South Sudanese 2010, thanks to annual additional demand

have access to electricity electrification growth rates in stemming from
All 20 countries of the world excess of three percentage productive uses and
with the smallest share of the points, driven largely by an emerging middle and
population with access to integrated approach that has higher-income
electricity in 2019 were combined grid, mini-grid and households.
located in sub-Saharan Africa, on-grid solar electrification. The region's
underscoring just how big an In 2018, Africa's annual electricity generation
issue it is in the region. At 7%, electricity demand was capacity has expanded at
South Sudan had the lowest 700TWh, with the North an average of 4.8% a year
access to electricity globally, African economies and South since 2008, compared
while countries including Africa accounting for over with 2.7% globally,
Chad, Burundi, and Malawi 70% of the total. The IEA according to the AEC.
had slightly higher access expects other sub-Saharan Nonetheless, Africa's
rates but still at under 20%. Africa countries to see the share of global electricity
Among the 20 fastest growth through to generation has been
countries with the largest 2040. It expects energy approximately 3% since
electricity access deficits, two demand to shoot up to between 2000. In terms of sectoral
African countries Kenya and 1,600TWh and 2,300TWh electricity consumption,
Uganda have showed the under various scenarios by the industrial sector
greatest improvement since 2040, with most of the remains the region's
largest user ( followed by residential (33%), the global energy mix; and to double the
commercial and public services (18%) and global rate of improvement in energy
agriculture (4%). Transport consumes a small efficiency.
proportion (around 1%) while the remaining The problem for Africa is that it is hard
3% was accounted for by other sectors. to achieve universal access while at the same
In September 2015, world leaders time markedly increasing the share of
agreed to Sustainable Development Goal 7 renewable energy, creating a conundrum for
(SDG7) as part of the 2030 Agenda. Its three African leaders. The issue is exacerbated by
core targets are: to ensure universal access to sub-Saharan Africa's high fertility rate at 4.62
affordable, reliable and modern energy births per woman in 2019 against a global
services by the year 2030; to increase average of 2.4 births. This fast-expanding
substantially the share of renewable energy in population needs additional energy.
AFRICA WANTS TO BECOME A

GLOBAL POWERHOUSE BY 2063
A frica has its own blueprint and

master plan for transforming the
region into a global powerhouse
of the future, called Agenda 2063.
Adopted by the heads of state and
IEA. Despite being home to 17% of the
world's population, the region accounts for
just 4% of global power supply
investment. Achieving reliable electricity
supply for all Africans would require an
governments of the African Union in 2015, almost fourfold jump in investment to
it is incorporated in the national planning around $120bn a year through to 2040. The
framework of over 30 countries. Under the IEA says that mobilising this sum is a big
blueprint, faster economic expansion is undertaking but can be done if policy and
accompanied by the full achievement of regulatory measures are put in place to
access to electricity and clean cooking in improve the financial and operational
line with SDG7. efficiency of utilities, many of which are
In the case of electricity, this would state-owned.
require tripling the average number of These steps would also facilitate a
Africans gaining access every year from more effective use of public funds that
approximately 20 million today to more could act as a catalyst to private capital.
than 60 million. Grid extension and Nurturing Africa's own financial sector is
densification is the least cost-option for also critical to ensure a sustained flow of
almost 45% of the population gaining long-term financing to energy projects.
access by 2030, mini-grids for 30% and "Africa is simply tired of being in the
stand-alone systems for around a quarter. dark," said Akinwumi Adesina, president
Liquefied petroleum gas is used by more of the AfDB, in a report. "It is time to take
than half of those gaining access to clean decisive action and turn around this
cooking in urban areas across sub-Saharan narrative: to light up and power Africa –
Africa, while improved cookstoves are the and accelerate the pace of economic
preferred solution in rural areas. transformation, unlock the potential of
Electrification, biogas, ethanol and other businesses and drive much-needed
solutions also play important roles. industrialisation to create jobs."
Africa's electricity sector requires Jean-Paul Adam, the director for
far greater investment in generation and technology, climate change and natural
grids, for which it currently ranks among resources management at the UN
Economic Commission for Africa
the worst in the world, according to the (Uneca), agrees. "Africa requires a 'just'
energy transition," he says. "Access to make hydro less dependable than in the
electricity must be the number one priority past. Natural gas is likely to play an
of African countries. The region has the important role in the coming decade as a
biggest energy deficit in the world, the scale transition fuel. It is the cleanest fossil fuel
of the challenge is huge. Additional coal use and is a good way of generating baseload
is not the solution. Coal-fired plants involve energy, which allows additional renewable
high upfront capital costs and the assets are energy to be brought online. It can easily be
likely to become stranded in the future as used for other purposes, including clean
global energy supply chains move towards cooking, as well. Gas can be used for base
cleaner energy sources. In many countries generation and solar and wind as
coal-fired plants are also contributing intermittent forms of energy."
significantly to negative health outcomes He adds that doubling electricity
among populations. We encourage every generation from gas in Africa would allow
African country to look at the right energy the multiplication of solar and wind
mix for itself and to make itself future-proof. investments by 38 times. The
It is important that they ensure future base corresponding increase in global emissions
generation capacity. Solar and wind are ill- would be less than 1%.
suited to doing this on their own and need to Experts say that coal is not an issue in
be paired with other energy sources. Africa, except in South Africa, where
“Hydro-electricity is vulnerable to significant resources are needed to
climate change. Recently, we have seen a
number of droughts in southern Africa that transition away from coal as it is a huge
employer in the country.
NATURAL GAS COULD BE THE TRANSITION FUEL

I n North Africa, gas already meets
around half of the region's energy
needs, but in sub-Saharan Africa it
has been a niche fuel. The share of gas in
the energy mix is around 5%, the lowest
the development of distribution
networks (including small-scale
liquefied natural gas (LNG)
distribution), the financing available for
infrastructure and the strength of policy
in the world, according to the IEA. efforts to displace polluting fuels."
However, it could become a lot more
important in the near term. There have In 2018, Mozambique had an
been a series of major discoveries in estimated 204,747 billion cubic feet
recent years in Egypt, East Africa (bcf) of natural gas resources while
(Mozambique and Tanzania), West Tanzania had 114,915bcf, Nigeria
Africa (Senegal and Mauritania) and 91,973bcf, Angola 32,790bcf, and
South Africa, which collectively Equatorial Guinea 14,300bcf, according
accounted for over 40% of global gas to Uneca. Nigeria had the biggest gas
discoveries between 2011 and 2018. production at 1,653bcf, followed by
"These developments could fit Equatorial Guinea at 337bcf, Angola at
well with Africa's push for industrial 197bcf, Mozambique at 152bcf and
growth and its need for reliable Tanzania at 53bcf.
electricity supply (constraining the Natural gas could become a lot
expansion of more polluting fossil more important to African countries in
fuels)," said the IEA in Africa Energy the future, but it would require a massive
Outlook 2019. "Much will depend on the investment in gas pipelines between
price at which gas becomes available, countries. Furthermore, a number of the
region's ports would need time when the traditional Continental Free Trade
to be expanded so that they forms of energy – fossil Area, the world's biggest
could accommodate huge fuels – could be used to free trade area with 54
ships carrying LNG from drive industrialisation has participating countries,
the likes of Mozambique passed. The region must came into force on 1
and Tanzania. f i n d a w a y o f January this year. It could
"There is no easy way of industrialising that is a lot spur much greater trade
saying it, but Africa has more dependent on within the region and
the raw end of the deal at renewable forms of s t i m u l a t e
the moment," says Daniel energy." industrialisation, but a
Kavishe, Africa economist This could be an exciting great deal of power will be
at RMB, the South African moment for the region needed for it to work.
investment bank. "The economically. The African
AFRICAN COUNTRIES EMBRACE

RENEWABLES AT SLOWER PACE
T here are strong

subregional
differences in the
pace of the transition to
renewables, with southern
more Western investors
are looking at energy
projects in the region with
an environmental, social
and governance (ESG)
of their energy mix.
However, I think we will
see a shift to a greater use
of natural gas in the region.
It does not always involve
Africa leading the way. lens. This really impacts laying long pipelines – gas
South Africa alone is what they are prepared to stoves can be used in
forecast to add almost 40% invest in and will affect the cooking, for example,
of Africa's total predicted region's economic replacing wood burning."
new solar capacity by the development. It is not only Western
year 2030. Namibia is "I think in an African investors that are
committed to generate context, it is important that becoming less enthusiastic
70% of its electricity needs investors put a lot more about investing in fossil
from renewable sources, emphasis on the 'S' in fuels, in particular coal. In
including all the major ESG; the region's massive October, for example,
alternative sources such as social issues must be China also said it would no
hydropower, wind and tackled. It is not clear that longer finance overseas
solar generation, by 2030. Western investors are coal-fired power plants. In
"This is a difficult moment prepared to back fossil fuel June, China's biggest
for financing Africa's projects, including natural bank, the Industrial and
industrialisation," says gas as well as oil and coal. Commercial Bank of
Elena Ilkova, investment They are keen on China, dropped plans to
strategist at RMB. renewables, which creates fund a $3bn, 2,800MW
"African countries do not a big opportunity for coal-fired power plant in
have sufficient internal African countries to Zimbabwe.
financing to do so and include renewables as part "Africa's industrialisation
has to be different from most people need wood but it has to take into
Europe's," says Dorsouma and charcoal for cooking. account the climate change
Al-Hamdou, acting If we can move towards dimension."
director, climate change clean cooking, Africa has abundant
and green growth deforestation rates will resources of oil and the
department at the AfDB. decline. associated revenues could
"We can now see that the "The correct balance must be an important motor for
developed world's be struck between poverty development. However,
industrialisation was not reduction and net zero. changing global energy
right, it resulted in high Most of Africa is already at dynamics mean that
carbon emissions. Africa net zero, so talking about a resource-holders cannot
must have a cleaner transition to net zero does assume that their oil
industrialisation. One of not make any sense. The resources will translate
the region's biggest issues region's priority must be into reliable future
is deforestation because economic development, revenues.
Africa is home to 'transition metals'

T he region is also
home to many of the
mineral resources
that are critical in driving
the global clean energy
predominantly mined in
Ghana, Guinea and
Mozambique.
Flows to developing
countries in support of
short of the target in 2019,
according to the
Organisation for Economic
Co-operation and
Development. Based on
transition, so-called clean and renewable energy recent trends, it was almost
'transition metals'. The reached $14bn in 2018, certainly not met in 2020
Democratic Republic of the with only 20% going to the either. One of the key goals
Congo accounts for two- least-developed countries,
of COP26 will be to try to
thirds of global cobalt which are the furthest from
ensure that wealthy nations
production and South achieving the various
Africa produces 70% of the SDG7 targets. An increased meet this pledge.
world's platinum, for emphasis on "leaving no Lazarus Chakwera, the
example. Rising demand one behind" is required in Malawian president, told
for the minerals that can the years ahead, according ITV News recently: "Fulfil
support global energy to the World Bank. your pledge. I am talking to
t r a n s i t i o n s o ff e r s a n In 2009, wealthy nations those developed nations
opportunity for minerals- committed to collectively north of us. Ten years ago,
rich countries in Africa. mobilise $100bn a year $100bn was pledged. We
The region also has some of between 2020 and 2025 to (in the developing world)
the world's largest help developing countries need that support in order
resources of bauxite, the cut their emissions and for us to do more solar and
world's primary source of adapt to climate impacts. wind and hydropower
aluminium – it is production."
Rich nations were $20bn
A
standard of living of hundreds of
frica has enormous
millions of people. As Africa's
carbon sinks in the
population grows and the region
Congo basin, the
industrialises, natural gas will
world's second-biggest river basin
become more critical, particularly
at 3.4 million square kilometres
during the next ten to 20 years. If
after the Amazon (seven
foreign investors shun
million square
investments in all
kilometres). It is
fossil fuel projects
essential for global
in the region
carbon emission
because of ESG
levels that the
considerations, the
international
LAZARUS CHAKWERA, continent is
community
President, Republic of Malawi likely to remain
helps African
extremely poor. There must be a
countries to preserve them.
huge effort to mitigate carbon
Africa's priorities are different
emissions from land use,
from the rest of the world's.
agriculture and forest
Economic growth north of 6% is
conservation. Renewable forms
needed to reduce poverty
of energy can be added to the
significantly in the region.
energy mix over time, but natural
Environmental concerns are
gas must play a vital role in base
extremely important but must be
generation.
weighed against improving the
IBADAN ENTREPRENEURS
NETWORK SUMMIT & AWARD

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