News type: Africa Bulletin

Africa’s burgeoning digital economy is full of growth opportunities as global businesses and investors continue to explore its digital landscape. With this upward trajectory, various stakeholders across the continent are focusing more on cybersecurity to reduce incidents and address vulnerabilities. According to a report by Kearney titled Cybersecurity in Africa – A Call to Action, the African cybersecurity market was valued at USD 2.5 billion in 2020 and is projected to increase to USD 3.7 billion by 2025, which encompasses the amount organisations invest to enhance their cybersecurity capabilities.

Africa
Afreximbank to Double Intra-African Trade Financing to USD 40 Billion by 2026
African Export-Import Bank (Afreximbank) plans to double its financing of intra-African trade from USD 20 billion in 2021 to USD 40 billion by 2026, Mr Haytham El Maayergi, Afreximbank’s Executive Vice President, Global Trade Bank, recently said. Mr El Maayergi was addressing participants and guests at the African Caucus Meeting of the World Bank Group and the International Monetary Fund, where he represented Prof Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank.

Attended mainly by finance ministers and central bank governors from across Africa, the meeting aimed to identify key challenges facing Africa in achieving full integration and engaging in strategic dialogues to engender sustainable solutions. Mr El Maayergi said that Afreximbank had been a champion in facilitating intra-African trade since its founding and that it had committed USD 1 billion to support the funding of the African Continental Free Trade Area Adjustment Fund and a USD 10 million grant to facilitate the establishment and operationalisation of that fund.

Source: Afrieximbank

As the global community intensifies its fight against climate change, Africa is emerging as a key player in the global carbon markets. While still in the nascent stages, the continent’s engagement with carbon trading is growing, driven by innovative initiatives and a burgeoning recognition of the economic and environmental benefits.

 

Africa

AfDB Tops 2024 Global Aid Transparency Rankings for the Second Year
The African Development Bank’s (AfDB) sovereign portfolio was recently acclaimed as the most transparent in the 2024 Aid Transparency Index, released by the global advocacy group for aid and development transparency. For a second time running, the result highlights the Bank’s continued effort and prioritisation of good-quality data publication. The portfolio emerged first out of 50 global development institutions with a top score of 98.8 in 2024, according to the report.

The report commended the Bank for detailed publication of project objectives, impact appraisal documents, environmental studies and evaluation reports – a total of over 29 documents in both French and English. The 2024 Index assesses six sovereign (public sector) portfolios and six non-sovereign (private sector) portfolios of development finance institutions. The sovereign portfolios of development finance institutions occupy three of the top five positions in the ranking with the AfDB coming first, the InterAmerican Development Bank second and the World Bank International Development Association fourth.

Source: Business Insider Africa

Foreign exchange markets are pivotal to the global economy, facilitating currency conversions that enable international trade, financial transactions, and investments. Africa’s foreign exchange (forex) landscape is a critical component of its economic framework, influencing both domestic stability and international trade. However, the continent faces unique challenges due to a complex mix of domestic politics and global market conditions governing its forex exchanges and respective currencies.

Africa
USD 5 Billion Deal Signed for Establishment of Africa Energy Bank
African Export-Import Bank (Afreximbank) and the Africa Petroleum Producers’ Organisation (APPO) recently made history by signing the Establishment Agreement and the Charter of the Africa Energy Bank (AEB). The AEB is designed as an independent and supranational pan-African energy development bank, starting with an initial capital of USD 5 billion. This milestone concludes two years of negotiations and preparations since the signing of a Memorandum of Understanding in May 2022, aiming to establish the AEB.

The AEB’s primary objective is to address the imminent void caused by the withdrawal of funding for oil and gas projects in Africa by traditional financiers. With over 125 billion barrels of proven crude oil reserves and over 600 trillion cubic feet of proven gas reserves, Africa needs to tap into these resources to produce energy as it currently has the largest proportion of the world’s population living without access to modern energy. While the AEB’s focus will be on funding oil and gas projects, it remains open to renewable energy initiatives. The AEB aims to harness all forms of energy to eradicate Africa’s energy poverty. Although initiated by Africa, shareholding is open to all investors who align with the mission and vision of the Bank.

Source: Afreximbank

With its rapidly growing population, Africa is poised to double by 2050, reaching over two billion people. This surge in population will be met by the demand for cost-efficient and reliable energy, a crucial factor in powering the continent’s socioeconomic development. To meet this energy demand sustainably, Africa must harness its abundant renewable energy resources, which not only bridge the energy gap but also pave the way for the continent to achieve its climate goals, inspiring a future of sustainable development.

World
Private Sector Pumps USD 86 Billion into Infrastructure in Low – to Middle-Income Nations
New World Bank data finds that private infrastructure investment in low- and middle-income countries totalled USD 86 billion in 2023. Investments declined 5 percent compared with 2022. However, they were on par with the previous five-year average. Despite the decline in total investment, more countries received private investments in infrastructure across a wider sample of projects. In 2023, 68 countries received investments across 322 projects, compared to 54 countries and 260 projects in 2022. Guinea-Bissau, Libya, Papua New Guinea, São Tomé and Príncipe, and Suriname achieved their first private participation in infrastructure (PPI) transactions in over a decade.

The PPI report dates back to 1984. It continuously tracks investments in 10,000 infrastructure projects in low- and middle-income countries. As infrastructure financing becomes a bigger priority for countries around the globe, this dataset is an important resource for tracking progress and identifying trends. PPIs declined in most regions in 2023 except for the Middle East, North Africa (MENA), East Asia, and the Pacific (EAP). MENA continued its growth trajectory, with PPI investment levels almost doubling from USD 1.4 billion in 2022 to USD 2.9 billion in 2023.

Source: World Bank

Africa’s population growth continues to soar, and it is expected to reach approximately 2.5 billion by 2050, according to the United Nations, meaning the continent will be home to 25 percent of the global population. This projected population growth will increase demand for infrastructure, energy and real estate projects, mostly in the major cities. Economic hubs, including Cairo, Lagos, Luanda, Dar es Salaam, Nairobi, and Addis Ababa, are home to over 65 million people, a figure set to rise to 100 million by 2030. These cities and others will enter their next phase of growth, which will be major pillars unleashing a wealth of investment opportunities in the sector.

Africa

World Bank Project to Connect 300 Million Africans to Electricity by 2030
The World Bank Group in partnership with the African Development Bank (AfDB) are aiming to provide at least 300 million people in Africa with access to electricity by 2030. The Washington DC-based institution will work to connect 250 million people to electricity through renewable energy systems while the AfDB will support 50 million people, but the project will require substantial investment.

It is estimated that USD 30 billion of public sector investment will be needed to carry out the ambitious project. The International Development Association (IDA), a branch of the World Bank that provides low-income developing countries with funding, is set to provide USD 20 billion for the project, with the remaining USD 10 billion expected to come from other public money. The World Bank is also hoping that the private sector will contribute to funding efforts. Furthermore, the Bank insists that African governments will need to put in place policies that attract private investment, and reform their utilities.

Source: African Business