Investors update: Africa’s Fastest Urbanizing Region — McKinsey

Africa is the world’s fastest urbanizing region — McKinsey

Highlights

• Africa is urbanizing faster than any other place on the planet, per a recent McKinsey report. Since 2000, the continent’s urban population has grown by 3.7%, outpacing overall population growth of 2.5%. 
• Over the next two decades, Africa will become majority urban as more than 500 million people migrate to its cities and create the largest total number of urban dwellers in the world. 
• By 2040, Africa will be home to 12 cities of more than ten million people each as ten more cities join Cairo and Lagos, and 19 “second” cities will have populations between five million and ten million, up from ten today.

Source: McKinsey Africa

Our Takeaway

The McKinsey report further notes, despite the rapid urbanization, that Africa has fewer and often smaller second cities than other regions of the world; among the largest cities on the continent, only four of 14 have a second city bigger than half the size of their primary cities. More so, African primary and second cities need infrastructure investment to support businesses and workers so they can deliver the high productivity needed to increase the pace of economic growth on the continent.

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South Africa’s economy is back to pre-Covid size

Highlights

• South Africa’s economy escaped recession in the first quarter and is once again bigger than before the coronavirus pandemic hit, as most sectors grew.  
• Gross domestic product expanded 0.4% in the three months through March, after contracting a revised 1.1% in the previous quarter, Statistics South Africa said Tuesday. 
• That matched the central bank forecast and the median estimate of economists in surveys by Reuters and Bloomberg. The economy grew 0.2% from a year earlier. 

Source: Bloomberg

Our Takeaway

Eight of 10 industries tracked by Stats SA recorded growth in the first quarter, with manufacturing and finance, real estate, and business services making the biggest positive contributions. Agriculture, forestry, and fishing were the biggest drag on growth. Food and drinks manufacturing had performed particularly well, despite crippling power cuts, reportedly because the sector is not as electricity-intensive as other types of manufacturing. Despite the country avoiding a technical recession, usually defined as a fall in gross domestic product for two successive quarters, analysts remain pessimistic about South Africa’s growth prospects.

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Mastercard edtech fellowship selects 12 Kenyan startups

Highlights

• Nairobi-based incubator iHub has announced the 12 startups selected for the Kenyan leg of the first Mastercard Foundation EdTech Fellowship Programme.
• The $15 million, which offers selected companies access to funding and other types of support, edtech accelerator initiative is taking place in Kenya and Nigeria. 
• The fellowship is part of a broader goal of the Mastercard Foundation under its Centre for Innovative Teaching and Learning to support the growth of an impactful African ed-tech ecosystem.

Source: Disrupt Africa

Our Takeaway

The past few years have seen a rise in the adoption of edtech innovation in Africa. With hundreds of millions of students in primary and secondary schools, technology presents a massive opportunity for improving education access and quality on the continent. Available projections indicate that the African edtech market will grow into a multibillion-dollar industry, driven by increasing demand for online learning solutions, e-books, and educational apps. However, significant challenges remain for players in the space, such as access to funding and route-to-market which incubators like Mastercard’s can help address.