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The Young Africa A Liveplex Report.pdf

Liveplex
Liveplex

Africa will have about 500 million young people by 2030. 157 of the world’s 310 mobile money services in 2021 were in Sub-Saharan Africa. Africa had a US$495bn share of the US$767bn handled by mobile money worldwide. Mobile phones account for about 75% of all online traffic in Africa. Africa has potential to unlock more than $3 trillion in consumer spending. In the five largest consumer markets alone—Nigeria Egypt, South Africa, Morocco, and Algeria—the African Development Bank estimates that there will be 56 million middle-class households with disposable incomes of nearly $680 billion. Analysis Group estimates that the Metaverse could contribute $40 billion to Sub-Saharan Africa’s GDP by 2031.

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WHAT WILL 500 MILLION
YOUNG PEOPLE IN AFRICA BY
2030 BE LIKE?
THE
YOUNG
AFRICA
LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED
INTRODUCTION
LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED
In 2015, there were 226 million
youth (people aged between 15 and
24) in Africa, making up 19% of
youth globally. By 2030, 42% of
young people worldwide will be
from Africa [UN Department of
Social and Economic A airs].
This means that Africa will have
about 500 million young people
by 2030, not accounting for
normal global population
growth. Currently, 60% of
Africa’s population is under 25,
making it the youngest
continent in the world in relation
to its population. Africa will be
home to the world’s largest
working-age population by 2040,
and smart deployment of its
labor force in highly productive
jobs will spur economic growth.
LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED
By 2030, the services sector on its
current trajectory will create at
least 85 million net new jobs
across the continent, enough to
absorb half of new labor market
entrants in highly productivity
work.
The number of new services jobs
would almost triple if Africa
matched the productivity of Asia’s
strongest services hub, which
would add $1.4 trillion to the
continent’s economy.
Additionally, agriculture remains
the backbone of many African
economies, accounting for 49
percent of the continent’s total
employment. The agricultural
sector’s productivity and output
have improved steadily over the
past two decades.
As more people move out of
agriculture and into services,
Africa has opportunities to
increase yields and add value to
agricultural output to match the
standards of global peers.
Across all sectors, the trick will
be to develop the skills and
increase the digital tools and
technologies that enable
Africa’s rich pool of talent to
spark and sustain productivity-
led growth across the
continent.
LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED
The internet and social media are their primary source of information and content
consumption.
INTEREST AND BEHAVIOR OF AFRICAN YOUTH
While internet penetration across the continent is rapidly growing, the internet and
speci cally social media have become the main source of information and content
consumption for young people who access it. A street survey across Nigeria, Ghana, and
Kenya with over 2,000 respondents of under 30 year olds, showed that social media is the
main touchpoint for news and content consumption for a majority of them.
LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED
This also ts with the social media consumption patterns reported by We Are Social &
Hootsuite’s yearly State of Digital report with social media users from Nigeria, Ghana, and
Kenya spending over 3h daily on social media on average, compared to a global average of
2h25.
This also ts with the social media consumption patterns reported by We Are Social &
Hootsuite’s yearly State of Digital report with social media users from Nigeria, Ghana, and
Kenya spending over 3h daily on social media on average, compared to a global average of
2h25.
Aspire Financial Safety
This means that while being cost-conscious, there is a rapidly growing market for
products (and campaigns) that appeal to the aspirations and goals of the youth. Excluding
South Africa, a growing middle class in Sub-Saharan Africa is spending over $400 million
per day In Ghana, 80% of under 30 year olds have a saving goal they are working towards.
Storytelling and Community works
To capture this growing market, brands that have powerful storytelling and are capable of
building communities around their products are in a strong position. Users having grown up
with the rise of digital expect to be able to interact and associate with their favorite brands
online.
Online Shopping is Cool
We are seeing strong growth in social media shopping. The number of products being sold
on platforms such as Instagram and the number of sellers on these platforms is rapidly
increasing. We have identi ed the following three reasons for this emergence:

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The Young Africa A Liveplex Report.pdf

  • 1. WHAT WILL 500 MILLION YOUNG PEOPLE IN AFRICA BY 2030 BE LIKE? THE YOUNG AFRICA
  • 2. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED INTRODUCTION
  • 3. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED In 2015, there were 226 million youth (people aged between 15 and 24) in Africa, making up 19% of youth globally. By 2030, 42% of young people worldwide will be from Africa [UN Department of Social and Economic A airs]. This means that Africa will have about 500 million young people by 2030, not accounting for normal global population growth. Currently, 60% of Africa’s population is under 25, making it the youngest continent in the world in relation to its population. Africa will be home to the world’s largest working-age population by 2040, and smart deployment of its labor force in highly productive jobs will spur economic growth.
  • 4. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED By 2030, the services sector on its current trajectory will create at least 85 million net new jobs across the continent, enough to absorb half of new labor market entrants in highly productivity work. The number of new services jobs would almost triple if Africa matched the productivity of Asia’s strongest services hub, which would add $1.4 trillion to the continent’s economy. Additionally, agriculture remains the backbone of many African economies, accounting for 49 percent of the continent’s total employment. The agricultural sector’s productivity and output have improved steadily over the past two decades. As more people move out of agriculture and into services, Africa has opportunities to increase yields and add value to agricultural output to match the standards of global peers. Across all sectors, the trick will be to develop the skills and increase the digital tools and technologies that enable Africa’s rich pool of talent to spark and sustain productivity- led growth across the continent.
  • 5. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED The internet and social media are their primary source of information and content consumption. INTEREST AND BEHAVIOR OF AFRICAN YOUTH While internet penetration across the continent is rapidly growing, the internet and speci cally social media have become the main source of information and content consumption for young people who access it. A street survey across Nigeria, Ghana, and Kenya with over 2,000 respondents of under 30 year olds, showed that social media is the main touchpoint for news and content consumption for a majority of them.
  • 6. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED This also ts with the social media consumption patterns reported by We Are Social & Hootsuite’s yearly State of Digital report with social media users from Nigeria, Ghana, and Kenya spending over 3h daily on social media on average, compared to a global average of 2h25. This also ts with the social media consumption patterns reported by We Are Social & Hootsuite’s yearly State of Digital report with social media users from Nigeria, Ghana, and Kenya spending over 3h daily on social media on average, compared to a global average of 2h25. Aspire Financial Safety This means that while being cost-conscious, there is a rapidly growing market for products (and campaigns) that appeal to the aspirations and goals of the youth. Excluding South Africa, a growing middle class in Sub-Saharan Africa is spending over $400 million per day In Ghana, 80% of under 30 year olds have a saving goal they are working towards. Storytelling and Community works To capture this growing market, brands that have powerful storytelling and are capable of building communities around their products are in a strong position. Users having grown up with the rise of digital expect to be able to interact and associate with their favorite brands online. Online Shopping is Cool We are seeing strong growth in social media shopping. The number of products being sold on platforms such as Instagram and the number of sellers on these platforms is rapidly increasing. We have identi ed the following three reasons for this emergence:
  • 7. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED Setting up a social media page and starting to sell is incredibly easy: platforms are making it easy to set up an account, run very targeted ads for low amounts of money, and services such as Flutterwave store and Paystack storefront enable businesses to create an online shop with payment integration in minutes.xt placeholder Social media’s community aspect ensures that good products get trusted recommendations and reviews that other buyers can rely on. Every person recommending a product becomes a micro-in uencer for the brand it supports. Social media platforms make it incredibly easy and cheap to create visually appealing and relatable content that gives a good idea about the products and sellers – from videos showing product use cases to pictures of the business and team behind the product.
  • 8. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED MOBILE MONEY AND FINTECHS
  • 9. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED According to the Global System for Mobile Communications Association (GSMA), 157 of the world’s 310 mobile money services in 2021 were in Sub-Saharan Africa. Moreover, Africa had a US$495bn share of the US$767bn handled by mobile money worldwide in 2020. Centres of African ntech innovation have emerged in South Africa, Kenya, Nigeria and Ghana, in particular, with ntech now the fastest growing start-up activity on the continent. According to McKinsey's analysis, Africa's nancial services sector has the potential to achieve a growth rate of approximately 10 percent annually. This growth could lead to revenues of around $230 billion by 2025 (excluding South Africa, which represents the largest and most mature market on the continent). Nimble ntech rms have swiftly seized opportunities within this expanding market. As the fastest-growing startup sector in Africa, the success of these ntech companies can be attributed to various trends. These include the rise in smartphone ownership, decreasing internet costs, expanded network coverage, and a young, rapidly urbanizing population.
  • 10. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED However, the growth of nancial services across Africa's 54 countries will not be evenly distributed. Presently, a signi cant portion of market value (approximately 40 percent of revenues) is concentrated in South Africa, which boasts the most mature banking system on the continent. Nonetheless, the most rapid growth is anticipated in Ghana and francophone West Africa, with projected annual growth rates of 15 percent and 13 percent respectively until 2025. Following closely, Nigeria and Egypt are expected to achieve a growth rate of 12 percent per annum over the same period. In general, the focal points of ntech growth are likely to be concentrated in 11 pivotal markets: Cameroon, Côte d'Ivoire, Egypt, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Tanzania, and Uganda. These markets collectively account for 70 percent of Africa's GDP and half of its population. However, due to varying levels of digital advancement across these countries, the opportunities within each market will di er. Economies with more mature nancial systems and digital infrastructure, like South Africa and Nigeria, are poised to experience innovations in advanced nancial services, including business-to-business (B2B) liquidity and regulatory technologies such as anti-money laundering and know-your-customer (KYC) compliance. Conversely, markets where nancial systems and infrastructure are still developing, such as Egypt, are expected to witness progress in nancial services such as underwriting, servicing, claims, and assessments in the insurance sector; banking-as-a-service and embedded nance in operations and infrastructure; and "buy now, pay later" services in retail and small and medium-sized enterprise (SME) lending.
  • 11. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED
  • 12. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED Successful ntech companies operating in Africa exhibit several key characteristics that contribute to their achievements: Fintechs tailor their value propositions to the speci c markets they enter, aligning with local economic conditions and customer needs. This exibility is crucial due to the variability between African markets. Market Adaptation: . Customer Acquisition: Overcoming challenges in customer acquisition, successful ntechs rapidly capture customers in Africa's population of over 1.3 billion. They leverage existing physical networks or employ competitive pricing strategies to attract and retain customers despite infrastructure constraints and low purchasing power. Monetization Strategies: Leading ntechs establish clear monetization strategies, often built around repeatable revenue sources. These sources may stem from core activities, like card switching, or multiple strategies involving both B2C and B2B components. Adaptation to Low ARPU: Fintechs adapt to the reality of low average revenue per user (ARPU) in Africa. They achieve this by using economies of scale to reduce service costs or altering their business models to accommodate pay-as-you-go options for businesses with limited upfront payments
  • 13. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED O ine Outreach: Given the prevalence of cash-based transactions (90% of all transactions), successful ntechs nd ways to reach clients o ine. Strategies include building agent networks and utilizing existing physical shops to provide nancial services, even in areas with limited infrastructure. Regulatory Compliance: With increased regulatory activity in Africa, ntechs prioritize compliance and engagement with regulators. Many successful companies actively collaborate with regulatory stakeholders, paving the way for cohesiveness as they scale. These characteristics enable ntechs to navigate challenges and achieve success in Africa's diverse and evolving ntech landscape. The bene ts of digital banking are clear. Accessing nancial services via apps or websites allows customers to make transactions at a time and place most convenient for them. Even those banks with thousands of branches such as Access Bank in Nigeria or South Africa’s Standard Bank, fail to cover their entire home markets, leaving many people in rural areas without a local bank. Established banks have certain advantages, including large customer bases, existing brand awareness and a high level of customer trust. However, many continue to work with legacy systems, making it di cult to integrate di erent functions and leaving them focusing on technological investment for its own sake rather than on customer experiences. Engagement banking is an emerging approach that involves placing customers at the heart of their strategies by providing single, uni ed digital platforms rather than separate siloed channels.
  • 14. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED 50% of the continent’s population is still unbanked and there is certainty plenty of scope for growth in the sector. Cash is still used in about 90% of nancial transactions in Africa, with electronic or digital channels accounting for just 5-7%. 20-30% of African bank customers use digital banking, in comparison with about 50% in Asia and Latin America.
  • 15. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED A new generation of mainly urban, middle class customers is emerging who expect to carry out more of their interactions online. As might be expected, younger people are adopting digital technology more readily than their parents’ and grandparents’ generations, so the uptake of digital banking services looks set to grow for decades to come. Moreover, limited card payment infrastructure and low use of point-of-sale networks encourage the use of digital banking. Digital banking penetration is not just a product of the availability of digital platforms but of the ability of potential customers to access them, particularly via mobile phones given that mobiles dominate online access in Africa. Figures vary but mobile phones account for about 75% of all online tra c in Africa. As a result, bank digital platforms are generally designed with mobile apps in mind, although it is important that customers can seamlessly switch between devices. Kenya and Ghana have been particularly quick to adopt digital payments. Kenya has the highest uptake of digital nance on the continent, as the country is well established as a centre of nancial services and technological innovation. M-Pesa mobile money system was launched by Safaricom and Vodafone in 2007, with mobile wallet transactions equivalent to 87% of Kenyan GDP in 2021. The country now has one of the highest levels of ntech penetration in the world, driving access to banking services from 26% of the population in 2006 to 83% by 2021.
  • 16. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED The South African market poses a rather di erent challenge, as 84% of the population had access to traditional banking services in 2021, leaving digital banking with a rather di erent challenge. Rather than entirely focusing on banking the unbanked, digital banks such as Bank Zero, Discovery Bank and Tyme Bank, must also demonstrate the advantages of their services over physical bank branches and ATMs. However, a recent report by BCG found that 60% of South African customers would be comfortable using a completely digital bank and 80% would prefer to carry out their day- to-day banking digitally. 86% of South Africans prefer to use mobile banking apps and internet banking, in comparison with just 7% who favor visiting their branch. 70% of adult Somalis regularly use mobile money services, partly because the vast majority of bank notes in circulation in the country are counterfeit. Many new African banks are seeking to attract as many customers as possible by o ering online onboarding, balance checking, money transfers and payment options. Yet we are already seeing a large proportion focus heavily on expanding the range of services by o ering loans, insurance and even investment products. There are several reasons why digital banks have embarked on phase two more quickly than their telecoms counterparts, not least because the technology allows them to do so. Mobile internet access was in its infancy in Africa 20 years ago, so could have been a focus of mobile marketing strategies.
  • 17. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED However, secondly and perhaps most importantly, digital platforms provide banks with huge amounts of data on their customers that allows them to tailor credit o erings to the individual and to make lending decisions in minutes in some cases. This twin track approach is therefore likely to continue for the foreseeable future, with lower mobile device and data costs driving up digital banking penetration rates, while banks also re ne the provision of additional services. African banks wanting to develop their digital channels to focus on four areas: It found that many banks in emerging markets focus excessively on the rst. of these areas – on their capabilities at the early stage of their digital development journey, while underestimating their competitive position. -developing superior technical capabilities and functionalities for their digital channels. -developing frictionless registration and recovery processes. -driving awareness of digital channel bene ts through e ective campaigns tailored to speci c microsegments of customers. and -adopting a pervasive approach to customer education and support across digital channels, such as through real time webchat support.
  • 18. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED DISPOSABLE INCOME
  • 19. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED With an estimated disposable income of R303bn in South Africa alone, brands cannot a ord to overlook Gen RE’s uniqueness and preferences as consumers or employees In 2023, the household disposable income in South Africa is forecast to amount to US$0.33tn. In 2023, the household disposable income in Nigeria is forecast to amount to US$0.46tn and the household disposable income in Kenya is forecast to amount to US$119.00bn. Africa has potential to unlock more than $3 trillion in consumer spending—but this will take more than a growing population Over the past decade, certain African countries, cities, and companies have been beacons of innovation, productivity, and growth. Their successes o er models for countries on the continent where growth has been less robust. Growth can help move one billion Africans across the empowerment line, de ned as the means needed to achieve self-su ciency in basic needs such as nutrition, energy, housing, healthcare, education, and other essentials. This would swell the ranks of the 250 million Africans who are expected to join the consuming class by 2030, unlocking $3 trillion in consumer spending. Such spending creates an opportunity for businesses to o er a ordable prices at scale, target expansion in growth hot spots, and innovate in local value chains.
  • 20. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED As continent-wide growth stalled between 2010 and 2019, rising incomes accounted for only 24 percent of the increase in African consumption, while population growth drove the lion’s share, a reminder of the potential embedded in Africa’s future consumption, especially if rising income levels accompany population growth.
  • 21. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED HOW ARE THE AFRICAN YOUTH SPENDING
  • 22. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED O ine shopping has picked up across Africa. However, online shopping remains popular across most countries, with 84% of consumers in South Africa and 85% in both Kenya and Nigeria saying they will stick to their changed behaviors. Despite a slight dip in certain categories like house and garden, and consumer electronics, where consumers experience problems shopping online, online purchases remain higher than before the pandemic. This demonstrates a shift away from o ine-only shopping. For retailers, it’s imperative that the online experience is frictionless, and the o ine experience is worth the trip in-store. First discovery via online touchpoints is a key trend with online research6 dominating as an upper-funnel discovery and awareness step. Consumers across all three regions are thoroughly researching products online (74% in South Africa, 83% in Kenya, and 85% in Nigeria) and for many, the experience serves as their introduction to a brand. Search engines are the main source of research, however, social media and retailer websites and apps have also been added into the research mix. Gen Z has more people than any generation in the world. That’s especially true across Africa, which is the youngest continent in the world. Brands naturally want to reach this enormous market, but in Kenya people aged 55 and up are more likely to actually make a purchase online. Some 41% of Kenyans in that cohort said they’d shopped online, compared to 30% of 18- to 24-year-olds.
  • 23. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED In Nigeria, Cash is King. Shoppers use a variety of payment options, including a raft of digital schemes from cards to bank transfers to smartphone payments. But even with all those choices, cash remains the most popular. Kenya is an early adopter of mobile money. In South Africa, 62% of people used their smartphone when making an online purchase in 2022. 90% of young people will support brands that share and demonstrate their personal values in South Africa. 34% of South African Gen RE’s have a side hustle and are looking to integrate their side hustle into their everyday life and demands. While 30% of working young people are contributing nancially to the family unit, 71% are still living at home, due to the increasing costs and complications of independent living. The highest youth spend categories include groceries, mobile devices and data, and beauty and cosmetic products.
  • 24. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED GROWTH OF MIDDLE AND UPPER CLASS
  • 25. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED One in ve of the world’s consumers will live in Africa by the end of the next decade, and more and more of these people will fall into the category of a uent or middle class. In the ve largest consumer markets alone—Nigeria Egypt, South Africa, Morocco, and Algeria—the African Development Bank estimates that there will be 56 million middle-class households with disposable incomes of nearly $680 billion. Consumers who are considered “better o than middle class” according to OECD standards are expected to spend an additional $174 billion per year over the same period, accounting for another 27 percent of the region’s total consumption growth. While it remains relatively small compared to other world regions, an upper class is beginning to emerge in certain African countries, demanding high-quality, niche, and foreign-produced goods as a mark of social status. As price of oil increases, oil-producing countries like Angola, Nigeria, Algeria, and Egypt are poised to see an increased market share for luxury goods. By 2030, the number of consumers in the top income bracket is projected to double in Algeria and potentially nearly triple in Morocco, while per capita income in Tunisia is expected to increase at more than twice the regional average, at 4 percent per year. In the continent as a whole, already 11 countries account for roughly 80 percent of total wealth and consumer spending: South Africa, Egypt, Nigeria, Morocco, Algeria, Sudan, Angola, Kenya, Ethiopia, Tunisia, and Ghana
  • 26. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED GLOBAL SUPPLY CHAIN HUB
  • 27. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED African economies can become major participants in global supply chains by harnessing their vast resources of materials needed by high-technology sectors and their own growing consumer markets, Africa's abundance of critical minerals and metals, including aluminum, cobalt, copper, lithium and manganese, vital components in technology- intensive industries, positions the continent as an attractive destination for manufacturing, as recent upheavals caused by trade turbulence, geopolitical events and economic uncertainty compel manufacturers to diversify their production locations. Africa also o ers advantages such as shorter and simpler access to primary inputs, a younger, technology-aware, and adaptable labor force and a burgeoning middle class, known for its growing demand for more sophisticated goods and services. Deeper integration into global supply chains would also diversify African economies, boosting their resilience to future shocks. Expanding energy supply chains into Africa is also an opportunity to accelerate climate action. The continent's vast renewable energy potential, particularly in solar power, can help reduce production costs and decrease reliance on fossil fuel-based energy sources.
  • 28. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED SCHOOL AND WORK
  • 29. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED More than 72 million youth in Africa are not in education, employment or training (NEET) – the majority of them young women. Tackling youth inactivity and gender inequalities is essential if countries are to achieve Sustainable Development Goal 8 on decent work for all by 2030. Young women in sub-Saharan Africa face more obstacles to participation in the labor market and recorded a NEET rate of nearly 33 per cent in 2022. In all seven countries in sub- Saharan Africa covered by the briefs, young women (aged 15-29) had higher NEET rates and lower employment rates than young men. For statistical purposes, the United Nations de nes youth as people aged between 15 and 24 years old. The continent has half a billion children ages zero to 14, and this number is expected to reach 580 million in 2030. In 2023, Africa will surpass South Asia as the region with the largest zero to 14 population. The size of this young population and the speed of its growth is historically unprecedented, making all e orts to educate children a massive undertaking. African countries can ensure a stronger, resilient, and more inclusive recovery by focusing on ve areas:
  • 30. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED 1. Getting children, especially girls, in safe schools and keeping them there. While African countries have succeeded in closing the gender gap in primary education, only 29 percent of children are enrolled in secondary schools at a grade appropriate for their age. 2. A push for learning is critical—this can be achieved by ensuring children start school ready, supporting teachers and school leaders, providing learning and teaching material, and measuring performance to ensure children are learning. 3. Technology is not the silver bullet but if leveraged appropriately, it can help accelerate learning, support teaching, measure learning, and support more e cient systems. Educators, politicians, leaders, employers, and parents are all stakeholders. 4. It is important to sustain structural education reforms that are comprehensive and sequenced even when politically di cult. 5. African countries need to prioritize education nance and ensure national resources allocated to education are ringfenced against shocks to the economy.
  • 31. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED THE WEB THREE STACK ADOPTION
  • 32. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED According to a report by Chainalysis, Africa ranks among the top 20 regions globally in terms of cryptocurrency adoption, with Nigeria, Kenya, South Africa, Tanzania, and Ghana leading the way. Analysis Group estimates that the Metaverse could contribute $40 billion to Sub-Saharan Africa’s GDP by 2031. The Metaverse will provide African brands with signi cant opportunities to tell unique stories in engaging ways. The MTN Group’s presence in the African metaverse is known as altMTN. With altMTN they further support the ambition to lead digital platforms and support African innovation, and host live events, shopping, gaming and learning. They hosted the rst metaverse music concert in 2022 in Ubuntuland – the African Metaverse. Web3 has been providing Africans with more nancial freedom, security, and opportunity in the face of economic challenges. But what is the regulatory framework like? As attention grows, the need to work with regulators early is important to keep its growth steady, provide clarity and enhance risk management. What does data say about regulation globally? PwC Crypto Regulation 2023 report details the ongoing regulatory developments globally, with a sample size of over 35 countries; 40% have regulations in place, 34.3% have started the process, 17% have not started the process, and 9% prohibits crypto.
  • 33. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED Sub-Saharan Africa is home to about 1.17 billion people, of whom 97% are under 65 years old. With a mobile penetration rate of 46%, according to Chainalysis, the cryptocurrency market in Africa grew by more than 1200% between 2020 and 2021. Smart investors who saw the potential of blockchain development in Africa injected approximately USD 88.5 million in Kenya, Nigeria, and South Africa in 2021. Even with increased capital injection, it is reported by the Standard Bank that Africa received only 0.5% of total global blockchain funding. Not a lot right? With massive digital revolution coming from Nigeria, Kenya, and many others, It is projected that Fintechs in Africa could grow their revenue by 8 times to reach USD 30 Billion by 2025. But are we well-positioned to hit the mark? Web 3.0 technologies are faced with challenges. Africa has coined the term “the last Frontier”, but we cannot achieve that without unlocking its vast potential with the right tools and proper planning for both the consumers and builders. Some of these challenges include: • Navigating an uncertain regulatory environment • Customer/stakeholder awareness • Reaching scale and pro tability Only Central Africa Republic designates Bitcoin as a legal tender out of all sub-Saharan countries; While there are some restrictions in others, trading crypto explicitly is banned in 20% of sub-Saharan Africa.
  • 34. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED Despite these issues, blockchain technology has been applied in various areas like fast transactions across borders using cryptocurrency, maintaining constant value in the case of volatility and currency devaluation, and even being used by The Ethiopian government engaged Cardano to develop a blockchain-based system to enable the veri cation of student credentials across the country. Governments are to be encouraged to develop an adequate, robust regulatory framework to protect people from another FTX and not regulation to strangle the growth of Web 3.0 advancement. A country with a population over 54.99 million, has a 42% internet penetration. Its Web 3.0 environment is vibrant and dynamic, they are placed fth globally in terms of crypto adoption. Which can be owed to the speed of transactions compared to traditional methods. Kenya According to the report: Web 3.0 is helping to improve user experience in South Africa, particularly in the elds of AI and machine learning. As the country's regulations for crypto assets evolve, its regulatory body is working to protect consumers from scams and fraud. The government recognizes the potential for cryptocurrency to become the backbone of South Africa's payment infrastructure. As of January 2023, Binance users in South Africa can withdraw ZAR directly to their bank accounts. South Africa is by far the most immersed African country in the Metaverse. It has taken an avid stance and support of this technology. It even launched its VR world, Africarare. In South Africa, at least 16% of its total adult population has participated in VR applications, according to SA social media. South Africa
  • 35. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED South Africa also saw a boost in its metaverse adoption strategies after Africarare received signi cant partnerships from organizations such as MTN and M&C Saatchi Abel. Meta predicts that Africa’s digital economy will go up simply due to the mass metaverse adoption rate within Africa. Nigeria Nigeria is known as the most likely country that will lead Africa’s web3 community to gory. It is currently ranked among the top 15 countries within the globe with the highest trading volumes in cryptocurrency. It is no surprise that it appears among the top African countries in the Metaverse. With 6.3 % digital currency ownership in 2021, Nigeria is ranked among the top 10 countries worldwide. It is driven by factors regarding the constant devaluation of the Naira, and lack of job opportunities which has made its younger demographic turn to trading cryptocurrency as a means to create wealth and real estate tokenization which is still in its infancy. Its SEC in 2022 released regulations regarding digital assets in Nigeria, considering them digital tokens that represent assets. Nigeria has had its fair share of wins regarding the NFT marketplaces. Nigeria hosts some of the well- known NFT artists Africa’s web3 community and the mobile industry will propel the African countries in the Metaverse. Egypt has had a somewhat mixed take on Africa’s Web3 community. It is one of the few countries globally that launched its rst virtual City within the Metaverse. According to the report, its creative community hub Tutera launched it as part of a project called Metatut. Egypt
  • 36. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED The virtual city Metatut is to create a simulation of ancient Egypt, speci cally during King Tutankhamun. Essentially the idea is tailored to allow the African web3 community a sense of freedom in designing, implementing and creating within the Metaverse. In addition, Egypt has embraced the use of the Metaverse as an educational tool. The Ministry of Local Development stated its plans to increase its capabilities through an education system. As a result, this department ended up listing at least 155 courses and workshops within the Metaverse. Now users will have the ability to learn and gain experience through various applications of VR. After the initial training, the Ministry accounted for a 27% productivity increase among its employees. Now Egypt intends to move directly to implementing Metaverse application courses, AI and Virtual world courses. The growth of Web 3.0 in Africa isn't surprising, given the continent's eagerness to access blockchain's many bene ts. Its main use in Africa is to protect against in ation by saving in stable USD, bypassing USD transfer limits, and facilitating fast transactions. With all the adoption of the last decade, the next phase of the African Web3 story is going to focus on the education of African institutions to co-adopt and build Web3. Web3 has four main elements, each leading to a drastic revolution within Africa’s ecosystem. The fundamental building block of this semantic web, blockchain technology, comprises various factors that are highly compatible with Africa’s ecosystem.
  • 37. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED One of its more revolutionary aspects, the Metaverse, has awed the globe with its futuristic capabilities. The term Virtual reality was a concept that Web3 applications released decades ago. Africa has virtually missed out on all the previous Industrial Revolutions of the past millennium. Fortunately, this fact has propelled most of Africa to dominate the 4th Industrial revolution more through blockchain technology and AI. As such most African countries are strategically hanging onto every advantage they can to stay ahead of the game. Currently, ve countries struggle for Africa’s tech hub; Kenya, South Africa, Egypt, Nigeria and Seychelles. Enhancing and boosting the e ciency of all sectors is crucial for driving Africa's future economic growth. The continent possesses a youthful and dynamic population, abundant natural resources, vibrant urban centers, and emerging innovations – all valuable assets that can be harnessed to elevate productivity and create added value. Success stories observed at local levels within countries, cities, and various industries provide blueprints for reigniting growth. Embracing digitalization, nurturing talent, fostering regional collaboration, empowering business leaders, and promoting eco-friendly enterprises are among the strategies through which Africa can elevate its productivity.
  • 38. LIVEPLEX PUBLICATION (C) ALL RIGHTS RESERVED A thriving Africa is essential for the global shift towards net-zero emissions, mitigating the e ects of demographic decline, and ensuring the continent's rightful role in the international trade landscape. By achieving sustainable growth rooted in robust productivity, Africa will bolster its resilience, fostering widespread well-being and prosperity across the entire continent.