New opportunities open to Singapore businesses in Africa

Singapore

FOR education technology firm ACKTEC Technologies, the mobile micro-learning app they created for onboarding truck drivers in Cameroon, might just be one of the most interesting projects they have ever embarked on.

"We created everything from scratch, i.e. we did the research and then curated it into an interactive format. And, in French," says founder and CEO of ACKTEC, Rayvan Ho.

"And, the whole process was developed end-to-end without being in Cameroon."

For ACKTEC, which looks to make learning easy through immersive learning using technologies such as augmented reality, virtual reality, and interactive 3D, Africa is a logical next-step.

The continent has been identified as a growth market and they have worked with several companies in Cameroon, South Africa and Ghana to explore opportunities to convert existing training material into an immersive learning format.

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"We like the African market as it presents a growing need and trend for immersive learning. This is also driven by the growth in learning needs as corporations set up offices and factories in Africa," says Mr Ho.

Africa is by no means a new market for Singapore. According to the United Nations Conference on Trade and Development, Singapore's investments into Africa rose from US$17 billion to US$20 billion from 2015 to 2019, making Singapore one of the top 10 investors in Africa.

According to Tan Soon Kim, assistant chief executive officer, global markets, Enterprise Singapore (ESG), the number of internationalisation projects in Africa supported by the agency grew by almost 20 per cent in 2020 compared to 2019, from 26 to 31 projects. These projects were in consumer goods, oil and gas, digital solutions, and urban solutions.

"There have been significant changes to the African economy which is leading to a broader profile of Singapore companies venturing into the continent for the first time," says Mr Tan.

In particular, digitalisation efforts have accelerated, partly because of Covid-19, but mainly because of the mass penetration of mobile technology.

"This presents new opportunities in the continent as mobile-enabled platforms across Africa have disrupted traditional value chains and removed barriers to entry for new players in fintech, edtech, healthtech, and smart urban solutions," he says.

Notably, a number of companies and startups are making their move into Africa for the first time.

For the first half of 2021, nearly all of the 16 projects supported by ESG's Overseas Centres in Africa were first time entrants to the continent, and close to half were for tech projects.

For example, Singapore-based big data and AI startup Crayon Data partnered a South African system integrator early this year to cross sell their personalisation engines to banks and telecommunication providers across the region.

Separately, Adera Global, which provides secure data extraction solutions, ventured into Africa for this first time in 2021. Their AI solutions, which will be implemented later this year, will ensure safe and secure data capture of cargo schedules and shipments.

Cross-border payments network Thunes meanwhile established a presence in Kenya five years ago and today provides access to over 200 million mobile wallets in Africa.

"Within the region, we provide payment rails to mobile wallets, banks, and, in some cases, cash payouts. In total, we have over 50 intra-Africa corridors helping to facilitate faster, cheaper and more transparent transactions for the consumers," says Peter De Caluwe, CEO of Thunes.

The plan is to cover Sub-Saharan Africa by the end of this year. The Singapore-based startup currently covers 32 countries in Sub-Saharan Africa.

It recently collaborated with Paypal and Kenyan leading mobile money provider MPESA KENYA to enable Kenyan sellers to access marketplaces through PayPal's global reach.

"Today, the African continent has almost half a billion of mobile money users, supported by major players such as M-Pesa as well as Airtel Money (13 markets), Orange Money (18 markets), and MTN MoMoPay (15 markets). And there is no sign of the pace slowing down - mobile industry body GSMA predicts smartphone users in the region to be close to 700 million by 2025," says Mr De Caluwe.

In terms of opportunities, the startup sees the biggest opportunities in Nigeria, Ghana, South Africa, Ethiopia and Kenya.

"One of our priorities is continually expanding our network coverage to give our partners better access and increased payment options. In terms of staff, we have employees based in five countries in Africa, with more to come in the next few months. Our Africa Regional office is located in Nairobi and we're set to expand further in the region."

According to Enterprise Singapore's Mr Tan, enhancing digital trade will be critical to unlocking the full potential of the African Continental Free Trade Area (AfCFTA) as the continent prepares to ramp up intra-regional trade and deepen trade specialisation.

Collaboration opportunities arising from AfCFTA, which was launched early this year, will be spotlighted at the Africa Singapore Business Forum.

To further unleash Africa's digital potential, there is a need to adapt and harmonise legislation for technology, intellectual property and data privacy amongst governments, says Mr Tan.

"Singapore businesses need to be mindful that digital transformation is not uniform across the continent and there are still gaps in coverage and access," he says.

"Investments to build and maintain digital infrastructure and nurture a steady pipeline of skilled talents are also considerations which new entrants have to factor in."

Working hard to address these infrastructure shortcomings is Surbana Jurong, which has well-established presence in the region. The bulk of their operations is focused on infrastructure, urbanisation and management services.

Amongst its many projects, the group's Kigali Master Plan 2050, which was approved by the City Council just last year, will guide the development of a city accommodating 3.8 million residents and providing 1.8 million jobs by 2050. Member company SMEC and Surbana Jurong co-developed the methodology to update the previous Kigali master plan which was adopted in 2013.

"The economic growth of any country is very much dependent on the quality of the infrastructure. It needs some fundamental, basic infrastructure to create economic growth," says Hari Poologasundrum, CEO, International, at Surbana Jurong Group. "Sanitation and clean water and fundamental expectations in any township ... (but) these are basic requirements which many countries in Africa don't have."

"That's an area we are looking to support. I think the biggest challenge now is there are limited funds, where do we channel the funds? At the moment Covid is at the forefront of everyone's minds and so that's where the money is being channelled. And that comes at the expense of spending on other critical infrastructure."

African Development Bank Group President Akinwumi A. Adesina thinks the AfCFTA will play a pivotal role in this. To back this, in the next two years, the African Development Bank will make US$2 billion available for AfCFTA related integration projects. These investments will leverage an additional US$2 billion in co-financing.

"The AfCFTA provides no stronger indication that Africa is open for business. Singapore and other South-East Asian countries stand to benefit enormously from the attractive opportunities that the AfCFTA offers," says Dr Adesina.

"These opportunities will be wide-ranging as we make progress boosting commodity-based regional value chains, developing manufacturing capacity for higher value-added opportunities, and as we leverage services and digitalisation, in the process. Our goal in making economic opportunities available to would-be partners is to accelerate the production and distribution of energy, fast-track industrialisation and the processing of resources, improve food security, enhance the quality of life for millions of Africans, and create sustainable agricultural practices at scale across our continent.

"We expect that there will be an increase in new opportunities, especially when AfCFTA implementation scales-up, and even better for Singaporean companies that are well positioned in Africa."