Over the last five years[1], the number of projects by Singapore companies in Africa doubled.
Many of these projects were in the infocomm media (ICM), urban infrastructure and food sectors. In 2020, despite the pandemic, Enterprise Singapore facilitated 20% more projects by Singapore companies in Africa compared to 2019.
2. The pandemic has accelerated the demand for digital solutions and opened up new opportunities for Singapore companies. In the first six months of 2021, close to half of the projects facilitated by ESG involved technology solutions in fintech, blockchain and artificial intelligence.
In addition, almost half of the 18 Memoranda of Understanding and agreements signed at the Africa Singapore Business Forum (ASBF) 2021 between Singapore companies and their African partners were technology-related[2].
“In Singapore, COVID-19 reminded us of the limitations of our small domestic market and underscored the importance of building business beyond our shores. While Southeast Asia and China are natural markets for Singapore companies to expand into due to proximity and familiarity, other markets such as Africa offer untapped opportunities,” said Mr. Peter Ong, Chairman, Enterprise Singapore.
The Potential of Africa
The African Continental Free Trade Area (AfCFTA) that came into effect on 1 January 2021 will create the largest free trade area in the world based on the number of countries it unites under the pact, with a combined GDP of USD$3 trillion[3] and a single market of 1.2 billion African consumers. Manufacturers will be incentivised to set up plants in Africa to produce for the local market.
For example, demand for pharmaceutical and medical consumables is expected to grow, in part accelerated by COVID-19. Africa currently imports more than 80% of its pharmaceutical and medical consumables[4], The manufacturing opportunity has drawn companies such as Ras Pharma & Biochem Pte Ltd.
The Singapore medical products manufacturer will be advising Ghana-based Merchant Company of West Africa (MECOWA)[5] on setting up a pharmaceutical supplies plant in Ghana.
Enterprise Singapore’s support for companies expanding into Africa
ESG regularly engages African governments and companies to understand their problem statements and matches them with Singapore companies that can address their needs.
In light of travel restrictions, virtual business matching roundtables and meetings were stepped up to enable Singapore companies to engage African partners and discuss projects to collaborate on.
One partnership that ESG facilitated was between IT Solutions Company Nextan and the government of Guinea. With the presence and support of ESG’s Ghana office, Nextan will be working with Guinea’s Ministry of Commerce to deploy a traceability solution for the country’s locally manufactured and imported goods.
To keep Singapore companies abreast of the fast-emerging opportunities in Africa, ESG organised a series of online webinars and roundtables from October 2020.
Over 60% of the 500 companies that attended these sessions were new to the African market. ESG’s Overseas Centres[6]also support Singapore companies by providing real-time market insights, generating business leads and identifying in-market partners.
The Africa Singapore Business Forum (ASBF) organised by ESG and held from 23-24 August 2021, is another platform that was established to foster investment, trade and thought leadership between Asia and Africa.
To date, ASBF has brought together 3000 high level business leaders and government officials from over 30 countries. The sixth edition of this flagship event featured insights from Mr Tharman Shanmugaratnam, Senior Minister and Coordinating Minister for Social Policies, Mr Alvin Tan, Minister of State for Trade & Industry and Community, Culture and Youth, Dr Akinwumi A. Adesina, President, African Development Bank Group and Dr Vera Songwe, Under-Secretary-General of United Nations and Executive Secretary of the Economic Commission for Africa. Delegates also heard from expert panels on urban solutions, digital opportunities and manufacturing and participated in virtual business matching sessions.
African Eye Report
