News type: Africa Bulletin

AI to Add USD 136 Billion to African Economies by 2030
Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), recently stated that Artificial Intelligence (AI) could contribute USD 136 billion in productivity gains, cost savings, and increased revenues to the economies of Nigeria, Kenya, Ghana, and South Africa by 2030.

This is even as she stated that AI has the potential to boost global economic activity by up to USD 15.7 trillion by 2030, with the global south, including Nigeria, standing to gain substantially.

She stated this while delivering a keynote address at the recently concluded 10th Convocation ceremony of the African University of Science and Technology in Abuja.

According to Okonjo-Iweala, Nigeria alone is positioned to reap 43 percent of these gains. She emphasised the transformative role AI can play in driving economic growth and sustainable development across the continent, citing a report by Access Partnership, which indicated that these gains represent 13 percent of the 2022 GDP of the four countries.

She called on African countries to harness AI’s benefits by investing in basic infrastructure, regulatory frameworks, digital literacy, and upskilling young people.

Source: Business Day

As we move into a new year, Africa’s economic transformation and sustainable development are at a pivotal juncture. Notably, the continent has made significant strides in forging a clear path for its growth journey reshaping global narratives about its potential. However, Africa’s Road to prosperity is not without hurdles. Persistent challenges such as climate change, governance gaps, and infrastructural deficits must be addressed to unlock the continent’s full potential.

Africa

Africa Registers USD 29.2 Billion Investment Interests in Three Days
About USD 29.2 billion in investment interests have been registered in three days for various projects in Africa as the continent turns its needs into bankable and beneficial opportunities for investors. The investment interests were realised from 37 projects in 41 boardroom meetings in three days at the recently concluded 2024 Africa Investment Forum market days in Rabat, Morocco.

It covers projects in transport, power and energy, food and agribusiness, mining, pharmaceuticals, water and sanitation, urban infrastructure, and tourism, across various African countries. At the Forum, some 15 new sponsors and partners, including banks, insurers and export credit in Africa and globally, registered their interest in boosting investment on the continent. Dr Akinwumi Adesina, Chair of AIF and President of the African Development Bank said the development showed that the forum was becoming a global investment movement for Africa.

He spoke at the closing press conference of AIF stating that over 2,300 investors and delegates from 83 countries, marking a 60 percent increase in the number of participants from 2023 was “truly outstanding.” He highlighted USD 4.8 billion garnered for Nigeria’s Special Agro-Processing Zone, and other projects initiated by Morocco and the Democratic Republic of the Congo as examples of projects that drew investor interest higher than initially targeted.

Source: Ghana Business News

Algeria
Algeria Boosts Rail Network Expansion with USD 2.8 Billion Investment in New Trains
Algeria has committed USD 2.8 billion to revitalise its rail network, a crucial step in the country’s efforts to improve transportation and promote connectivity within the continent.

Zawya reports that the new trains include high-capacity locomotives, passenger transport cars, self-propelled trains, high-speed self-propelled trains, freight coaches and manoeuvring locomotives. Algeria’s rail network is managed by the National Company of Rail Transport (SNTF) and currently has over 200 stations covering mainly the north of the country.

Sifian Aibash, the company’s transport manager, said the country will fund the project in stages. The first will include purchasing 400 train coaches for around USD 1.03 billion.

Algeria, a prominent oil producer has already issued an international tender for the supply of passenger transport rolling stock. The tender scope covers 6 self-propelled train sets, each with six standard gauge electric carriages for passenger transport and spare parts.

The country has also commenced electrification projects in anticipation of installing high-speed trains which will link the country’s most important cities. With over 5,000 kilometres of rail already in operation, Algeria is poised to extend its network with new lines to improve travel times, bridge community gaps, and drive economic development. This move is part of Algeria’s broader objective to ensure complete connectivity by 2035.

Source: Business Insider Africa

Intra-Africa trade has long held untapped potential for the continent’s economic growth and resilience. As African countries strive for economic diversification, reducing dependency on raw material exports and fostering industrialisation remains a key objective. While traditionally focused on commodity exports, many African economies are now seeking to rethink their trade and investment patterns, moving toward value-added production and intra-regional trade that could unlock significant economic opportunity. However, realising this vision demands a renewed focus on the structural reforms and infrastructural investments necessary to integrate markets and create diverse and inclusive growth.

Africa remains the most vulnerable region to climate change with most countries lacking the resources to implement climate mitigation measures and infrastructure.  As Africa contends with climate change and economic development, the investment landscape is also shifting rapidly towards environmental sustainability.

In response to these shifts, green bonds have emerged as a promising financial instrument poised to catalyse sustainable growth across the region.  They offer several benefits, notably, they provide additional sources of finance, diversify the investor base, attract ESG and new sources of public climate finance specifically dedicated to green bonds, and offer portfolio diversification for investors.

Africa’s rich history has played a critical role in shaping the global mining industry, transforming economies, and unlocking opportunities for development across various sectors. Today, with the surge in global demand for minerals, driven largely by the transition to green energy, the continent finds itself at the center of a pivotal moment. As the world looks to Africa for its critical metals and minerals, important questions arise: Will African nations and communities truly benefit from this new wave of extraction? Can mining companies and governments build a transparent, ethical partnership? And how can mining companies position themselves as responsible stewards of the environment?

Africa
China Offers Africa USD 51 Billion in Fresh Funding, Promises a Million Jobs
China recently pledged to increase its support across debt-laden Africa with nearly USD 51 billion in funding over three years, backing more infrastructure projects and creating at least 1 million jobs. China was ready to step up cooperation with Africa in industry, agriculture, infrastructure, trade and investment, President Xi Jinping told delegates from more than 50 African nations gathered in Beijing for the three-yearly Forum on China-Africa Cooperation Summit.

“China and Africa account for one-third of the world population. Without our modernisation, there will be no global modernisation,” Xi said. China, the world’s biggest bilateral lender, promised to carry out three times as many infrastructure projects across resource-rich Africa despite Xi’s avowed new preference for “small and beautiful” schemes based around selling advanced and green technologies in which Chinese firms have invested heavily.

Source: Reuters

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