By Dumisani Moyo

TECHDIGEST – The month of May is significant for the African continent because it is during this month that we celebrate Africa Day. Africa Day commemorates the formation of the African Union on May 25, 1963. It is a day when Africans celebrate the continent’s independence, freedom, and liberation from colonialism.

Reflecting on the significance of Africa Day, we have accomplished much in terms of colonial liberation, but much work remains to be done in achieving liberation from persistent challenges such as poverty, inequality, and unemployment that continue to plague the African continent.
I am fortunate to work in the dynamic and vibrant technology space, supporting a wide range of businesses in various industries, including small and medium-sized enterprises (SMEs) across the African continent.

A common realisation in my travels and interactions with business leaders has been the enormous opportunities that the African continent possesses.
According to the United Nations, Africa has a population of 1.1 billion people, which is roughly equal to the combined populations of Europe and North America.

A resource-rich continent of youthful potential

Africa’s youthful population is expected to grow to 1.4 billion by the year 2030 and 2.1 billion by 2050. Roughly 70% of Africans are under the age of 30, compared to Europe where populations are aging and declining. This young population offers enormous opportunities for economic growth and innovation, but only if they are seized.

Other valuable resources are also waiting to be unlocked

United Nations data indicates that Africa has 30% of the world’s mineral resources and 65% of the planet’s arable agricultural land. South Africa, for example, holds 90% of the world’s platinum reserves, while Nigeria and Libya are among the top ten countries with the largest oil reserves.

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Africa also has the largest cobalt reserves, with the Democratic Republic of Congo accounting for more than two-thirds of global supplies. As the world transitions to green energy sources, cobalt has become a strategic resource, particularly in the automotive and power generation industries.

In certain types of innovation, Africa also leads the world

According to a BCG study into mobile payment banking, Kenya and Ghana have the second and third highest mobile payment usage after China, demonstrating Africa’s enormous potential. Mobile transactions account for 87% of Kenya’s GDP and 82% in Ghana.
To put this in context, the African mobile payment market could have 850 million customers by 2025, which is 100 million more than Europe’s total population.
The big question is why, despite a large young population and mineral resource wealth, does Africa continue to trail the rest of the world in its development?

Tech-enabled SMEs could power the continent’s growth

One of the solutions to driving Africa’s economic development could lie in the small and medium enterprise (SME) sector. SMEs have the potential to support development by creating jobs and driving economic growth. The burning question is: why are African SMEs so slow to adopt and leverage technology?

African businesses – and SMEs in particular – face significant challenges that include lack of access to capital, specialised skills, raw materials, and markets. A lack of adoption of new technologies is causing several issues for Africa’s SME sector, ranging from poor planning, a lack of forecasting capability, and lack of capacity to leverage the efficiency gains of artificial intelligence and machine learning. These issues must be addressed if we are to unleash the next generation of African business success stories.

Although technology is not the only answer to the question of building world-class competitive African businesses, it is one of the most accessible solutions to many of the challenges that businesses face. Returning to the mobile payment banking example, this innovation was the result of a clever use of technology to address a fundamental challenge in both Kenya and Ghana: a lack of banking infrastructure.
Digital supply chains and business network solutions could unlock access to new markets for raw materials or finished products. Innovative use of technology – like what we’ve seen with mobile banking – could solve immediate challenges stunting SMEs’ growth and unlock a new wave of innovation across the continent.

Even though Africa continues to face numerous and complex challenges, there is no denying that the continent is brimming with possibilities. The time is now for African businesses to leverage technology as a strategic resource to fuel innovation and growth.

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TECHDIGEST – The findings of a joint study by Boston Consulting Group (BCG) and EDHECinfra, a venture of the renowned international EDHEC Business School, published recently reveals that large markets such as Nigeria, Ghana, South Africa, Brazil and parts of Asia have huge potential to attract digital infrastructure projects but are untapped markets for fiber optics investments.

This, according to the report, can be linked to uncertain economic growth that has made fiber – penetration levels uneven despite a clear demand for fiber infrastructure projects.

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In the new report entitled “Infrastructure Strategy 2022: A Pivot to the Digital Frontier,” Boston Consulting Group (BCG) and EDHECinfra provide a new perspective on the investment strategies and risk-adjusted performance of different groups of infrastructure investors.

“Although demand for fiber optic projects is most pronounced in less-wealthy economies—large and diverse regions with significant potential, such as Nigeria, Ghana, South Africa, Brazil, and parts of Asia are untapped markets—fiber penetration is also uneven in places where economic growth is less uncertain,” the report states.

The study points out that the increasing desire for higher speeds and reliable online access will inevitably lead to a huge expansion of fiber optic installations in new networks in low- and middle-income nations as well as in existing networks in higher-income countries.

Ultimately, fiber, which has already begun to make inroads in networks everywhere, will replace legacy (primarily copper) infrastructure completely, particularly as 5G rolls out.

​Commenting on the findings of the study, Stefano Niavas, the Managing Director and Partner, BCG Nigeria, says, “Fibre optic investment is required to expand the capacity of the undersea cable infrastructure on the shores of Nigeria beyond the cities to other regions of the country in order to make connectivity truly ubiquitous.

“With the growing demand for fast and reliable Internet connectivity, investing in digital infrastructure is profitable and it is expected that investment in fibre installations all over the country will accelerate in a few years from now.”

Other key findings of the report include:

A pivot to the digital frontier 

As the analysis shows, all investors are planning to overinvest in digital infrastructure going forward. While this also entails data centers, towers, satellites, and subsea connections, the appetite for broadband connectivity remains high.

As Roman Friedrich, a BCG managing director and partner and a coauthor of the report, explains: “The increasing desire for higher speeds and reliable online access will lead inevitably to a huge expansion of fiber optic installations in new networks in developing nations as well as in existing networks in more developed countries. Ultimately, fiber will replace legacy (primarily copper) infrastructure completely, particularly as 5G rolls out.”

North American Pensions Funds have the highest risk-adjusted returns in 2021 and are in fact the top ranked peer group –

Other peer groups took more risk to achieve lower average returns, while Canadian investors are very close to the all-investor average.

At the bottom of the risk-adjusted rankings, EU and UK pension funds take less risk but also achieve comparatively lower returns.

As Frederic Blanc-Brude, director of EDHECinfra and a coauthor of the report, explains, “certain investors have gained exposure to different segments of the infrastructure universe over time and each segment has performed differently.”

Oil and gas still pay –

Although one-third of the surveyed investors have expressed that they want to decrease their exposure to conventional power generation, the main beneficiary of the 2021 recovery, after transport, was gas and conventional power generation—especially since wind levels were lower than usual.

Those peer groups that stayed more exposed to these sectors benefited, while peer groups that have already mostly divested conventional power generation from their portfolios did not.

Operational value creation is paramount –

While operational value creation has always been a paradigm for value-add infrastructure investors, 90% of Core and Core+ investors agree that the focus will shift toward more hands-on value-creation work with their portfolio firms.

As Wilhelm Schmundt, BCG’s global head of the infrastructure investors’ sector and a coauthor of the report, sees it: “The steep increase in asset prices, dealing with inflation and the rise of factor prices, as well as secular trends like energy transition and digitalization, have made operational value creation a must-have capability for asset managers across all industry sectors. Limited partners are putting increasing scrutiny on understanding how general partners are building their respective muscles.”

To Read more, Visit : Techeconomy.ng

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TECH DIGEST – Latest estimates show increasing confidence that quantum computers will solve major problems that are beyond the reach of traditional computers.

A milestone known as quantum advantage has grown fast in the past twelve months, according to a new report by Boston Consulting Group (BCG), titled, What Happens When “If” Turns to “When” in Quantum Computing?

Investors are moving aggressively to increase the amount they allocate to quantum computing, with two-thirds of all equity investments in the field coming since 2018.

Through 2017, those investments totaled ~$600 million, and that amount nearly doubled over the next three years.

At the same time, companies are also significantly upping their Quantum Computing investment, with 20% expected to dedicate resources to quantum technology by 2023, up from just 1% in 2018, according to a recent Gartner prediction.

Jean-Francois Bobier, a BCG partner and director, and a co-author of the report, predicts the acceleration will continue.

“Recent advances and roadmaps from major hardware companies such IBM, Google, Honeywell, IonQ, PsiQuantum and others have increased the confidence that we will have machines powerful enough to tackle important business and society problems before the end of this decade. Impacted companies and governments should get prepared for an accelerated timeline,” said Bobier.

This upturn in investment is driven by major advances in quantum computing technology and predictions of massive performance and profit improvements as a result of this new capability.

The BCG research estimates that quantum computing will unlock new value across many industries, creating up to $850 billion in annual value by 2040.

Much of the new investment is being directed toward the challenge of developing lower cost and more reliable quantum computing hardware.

Researching and engineering the quantum bits (qubits) that power the computers is extremely difficult and expensive.

In 2020, a total of $675 million in equity investments flowed to quantum computing, with $528 million of that going to hardware development.

The year before, the total venture capital of just $211 million was split evenly between hardware and software.

BCG expects 2021 to break previous records, with more than $800 million in investments.

BCG predicts a race between five competing quantum hardware technologies over this decade. As of today, they all bear unique performance and scalability tradeoffs, and the jury is out on which ones will achieve a decisive advantage.

Large, established companies such as IBM, Google, Honeywell and Amazon Web Services are heavily investing beside well-funded startups such as IonQ, which went public this year at an estimated initial valuation of $2 billion.

Matt Langione, a BCG principal and another of the report’s authors, predicted a significant surge in institutional and corporate investment in quantum technology.

“The critical change since we last surveyed the market two years ago is the rise of corporate interest and investment. That was the last domino to fall after governments and equity investors began investing heavily,” Langione said.

“Building quantum computers will require not only hardware and software innovations, but also use-case innovation: businesses will need to identify and scope high-value problems for quantum computers to tackle,” Langione added. “That is happening now, and it’s happening with vision and imagination across many industries—not just pharma and financial services, but energy and retail.

Businesses of all kinds are realizing that this isn’t the kind of industry that you’ll simply be able to buy your way into once it matures.”

A copy of BCG’s report can be downloaded here.

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