Africa’s digital Awakening
Africa’s emerging economy brings new opportunities for Singapore
With rapid urbanisation and an expanding middle class driving consumer spending, Africa is emerging as the next frontier market for businesses around the world. According to a 2017 report by McKinsey titled Lions (still) on the move: Growth in Africa’s consumer sector, the continent’s consumer spending is expected to reach US$2.1 trillion by 2025. Meanwhile, online spending will reach US$75 billion also in 2025, equivalent to about 10 percent of retail sales in Africa’s largest economies, McKinsey estimates in another report, Lions go digital: The Internet’s transformative potential in Africa.
In particular, Africa’s fast-growing internet economy holds plenty of opportunities for Singapore companies, who can offer solutions to help modernise trade facilitation systems, digitise manual processes and improve data transparencies.
Investment is gaining traction
Singapore’s relationship with Africa has been gaining traction in recent years. Trade between the two regions stood at S$9.78 billion last year, and there are currently over 60 Singapore companies operating in the region. One such firm is Graymatics Singapore, which has inked an MOU with Kenyan ICT specialist, Crescentech, to provide security and surveillance solutions in industries such as banking, telecommunications and retail across Kenya, South Africa and Nigeria.
These and related issues were explored at the 5th edition of Africa Singapore Business Forum held on August 28 2018. Organised by Enterprise Singapore and supported by the Singapore Business Federation, the event saw more than 600 participants.
“Africa’s rapid growth and thriving digital economy offers rich opportunities for Singapore companies seeking higher growth and market diversification,” said Mr Png Cheong Boon, Chief Executive Officer, Enterprise Singapore.
Breaking into Africa’s market
In the last year alone, Enterprise Singapore has helped more than 10 Singapore companies break into Africa’s digital technology space, including the areas of e-Government services, e-commerce platforms and cross border payments.
But where to start? Here are three essential tips from Enterprise Singapore for local companies seeking to penetrate the African market:
1. Leverage growth areas
Africa faces many challenges in burgeoning sectors such as infrastructure, manufacturing, digitalisation and finance. Singapore firms with strengths in these areas will be well-positioned to contribute to the development of Africa’s infrastructure, technology and regulatory frameworks.
2. Go big on mobile payments
As the younger generation of African consumers move towards mobile payments, the continent faces challenges in payment infrastructure, data security and working within regulatory frameworks. Singapore companies can offer solutions to help modernise trade facilitation systems, digitise manual processes and improve data security.
3. Work with local partners
Each of Africa’s 54 countries has its own unique consumer, trade and culture. Singapore companies would do well to tailor their offerings according to local preferences. The best way to do that is by engaging a local partner who can assist in the procurement and distribution of goods and services, and offer insights into problems such as land disputes, inconsistent policies and regulatory reversals.