Enterprise Singapore, the government agency of Singapore that is championing enterprise development across African countries, has identified new growth opportunities in Africa’s digital economy and manufacturing industry.
In addition to oil and gas, and urban infrastructure solutions, Enterprise Singapore has identified Africa’s thriving digital economy and its manufacturing industry as two new growth engines.
The agency, which has successfully facilitated close to 50 projects for Singapore companies in Africa in the last two years, with about 80 per cent of such projects undertaken by small and medium enterprises (SMEs), said more local companies were turning towards Africa as the continent progressively opens up through digitalisation, regional integration and global trade, offering opportunities across various industries. Over 60 Singapore companies are present in Africa, operating across more than 40 African countries and multiple industries.
Speaking at the 2018 Africa Singapore Business Forum, which held in Singapore recently, the Chief Executive Officer, Enterprise Singapore, Mr. Png Cheong Boon, said: “Africa’s rapid growth and thriving digital economy offers rich opportunities for Singapore companies seeking higher growth and market diversification. We are encouraged to see our local companies, including SMEs, venturing into Africa and gaining traction there. We hope many more can tap onto platforms like the biennial Africa Singapore Business Forum and connect with our three regional offices in Africa to spark even closer business exchange and partnerships.”
Citing McKinsey report on Africa, which stated that Africa’s consumer spending is expected to reach $2.1 trillion by 2025, and coupled with a fast growing internet economy, the continent is looking for solutions to facilitate access to global markets and ensure payment interoperability. Africa’s e-commerce purchases are projected to hit $75 billion by 2025.
Speaking further, Boon said as Africa ramps up trade connectivity within itself and the rest of the world, Singapore companies can also offer tried and tested solutions to help modernise trade facilitation systems, digitise manual processes and improve data transparencies.
In the last year, Enterprise Singapore has helped more than 10 Singapore companies to break into Africa’s digital technology space including e-Government services, e-commerce platforms and cross border payments, he said.
Addressing Africa’s manufacturing needs, Boon said many African countries were embracing manufacturing as a key economic growth strategy to boost exports, upgrade domestic enterprise capabilities, and create higher-skilled employment. “Singapore’s manufacturing services companies with expertise in plant construction and design, equipment set-up, production workflow planning, quality control and testing, and skills training will be able to support manufacturers to expand production across the continent,” Boon said.
Africa’s agri-food manufacturing sector for example, presents tremendous market potential for Singapore companies across the value chain – from agri-tech and food production, to food processing and packaging. Africa’s food production industry is poised to be worth $1 trillion by 2030 as the continent seeks to substitute imports with high value domestically-manufactured food. Larger local companies such as Olam, Wilmar, Tolaram and Vega Foods, have gone beyond trading and distribution, to vertically integrate agri- and food processing into their operations, he added.
The growing bilateral economic ties between Singapore and Africa were further cemented with the signing of an Avoidance of Double Taxation Agreement (DTA) between Singapore and Gabon. This brings the list of DTAs that Singapore has signed with African countries to 13 .