Investors update: April 14 2023 - Amazon doubles down on South Africa with $1.8bn investment

Amazon doubles down on South Africa with $1.8bn investment

Highlights

• A newly-released economic impact study report shows that Amazon, via its cloud infrastructure arm Amazon Web Services (AWS), aims to invest $1.8 billion in South Africa by 2029. 
• The investment will be made towards cloud infrastructure in the region. From 2018 to 2022, the company says it has invested $885 million, which has resulted in an estimated $657,000 approximately in local GDP contributed by this AWS Region.
• In addition, the marketplace arm of Amazon is also planning to open up shop in South Africa by the end of 2023.

Source: AWS

Our Takeaway

South Africa still hosts AWS’s only regional data center in Africa. Last year, the service opened up a new Local Zone in Lagos, Nigeria, one of the only 15 Local Zones outside of the US. The decision to double down on its presence in Africa further underlines the huge untapped potential in the continent’s cloud computing market, which has pulled other big operators like Microsoft, Google, Huawei, Equinix Inc, and Teraco, with huge investments being poured into data centers and cloud infrastructure on the continent.

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IMF cuts global growth forecast after banking crisis

Highlights

• The IMF expects global growth will slow to 2.7% next year, 0.2 percentage points lower than its July forecast, and anticipates 2023 will feel like a recession for millions around the world.
• Aside from the global financial crisis and the peak of the Covid-19 pandemic, this is the weakest growth profile since 2001. Meanwhile, its GDP estimate for this year remained steady at 3.2%, which was down from the 6% seen in 2021.
• More than a third of the global economy will see two consecutive quarters of negative growth, while the three largest economies — the United States, the European Union, and China — will continue to slow.

Source: CNBC

Our Takeaway

After recovering from the Covid-19 pandemic and suffering setbacks from high inflation and spillovers from the war in Ukraine, policymakers globally are faced with the challenge of fighting persistent inflation and safeguarding financial stability. Both have become more complex due to banking pressures from the failures of two US regional banks and the forced sale of global lender Credit Suisse. As a result of this, this is the IMF’s lowest five-year global growth projection since it started issuing such forecasts in 1990.

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Seven Kenyan startups bag upstart capital from Mozilla

Highlights

• Seven startups from Kenya have received early-stage investments each from Mozilla and the Gladys Boss Foundation to improve their products and push them to the next level.
• This is part of Mozilla’s Mashinani Initiative, through which the company hopes to spark innovation by forging new, closer connections with regional partners to understand how African product demands and capacity shortages overlap.
• Beneficiary startups are building various solutions and will take part in the Mozilla Africa Mradi Innovation Challenge in Nairobi this June, which will be the culmination of the Mashinani Initiative.

Source: ABC

Our Takeaway

As Africa catches up with the developed world in terms of technological progress, accelerators, incubators, and pitch competitions help to bridge this gap by providing crucial access to capital and mentorship to startups. Mozilla’s efforts, yet another notable player in an active early-stage support ecosystem for African startups, are even more crucial considering the need to address several major challenges across education, agriculture, and healthcare in rural Kenya, where most of the population resides.