The economy of Zambia thrives on several key industries, including mining, agriculture, and manufacturing. It’s reflective of the wider African economy, with most nations making much of their GDP from the export of metals, minerals, gemstones, and grains.
Just like these other countries on the continent, Zambia’s economy is changing fast. New industries are growing, creating jobs, and overtaking some traditional ones.
Not all industries will expand and develop equally though as some will do better than others. Many factors, including environmental, legal, and commercial considerations will affect the performance of each individual sector. However, there are many exciting opportunities for investors both in Zambia and across the continent.
The global gaming industry is worth billions of dollars. Some of the largest companies are worth tens of billions on their own, for example, Electronic Arts has a market capitalisation of $39.66 billion, while Take-Two Interactive and Sony are worth $20.10 billion and ¥13.68 trillion ($123.47 billion) respectively.
Africa is lagging far behind other parts of the world though. North America, Southeast Asia, and Europe are the leaders in gaming, with most major developers and publishers being based in these continents.
iGaming is also strong in Europe and North America. Sports betting and online casinos have thrived in countries like the UK, Canada, and Sweden and have been growing exponentially in the United States since law changes allowed them to operate there too.
Competition is strong among the operators in the iGaming industry that most have taken to offering generous bonuses to encourage customers as part of their customer acquisition activities, this includes free spins that don’t require a deposit and others that match the amount the customer pays into their account.
Africa is catching up though. Many countries have begun to allow online betting within their borders, attracting investment from international brands and encouraging local businesses to move into the sector.
Video game development businesses are also beginning to spring up across the continent, focused mainly on creating titles for domestic markets. In Kenya, Luqdique Works works with around 2,000 contributors to create its content. One of the biggest successes is Mzito, a game where players are guided by spirits to save the continent from corruption.
Success for the gaming industry is tied to the adoption of the internet. Internet penetration is still low in Zambia, though it is growing rapidly. In 2019, the World Bank reported that around 14.3% of Zambians had access to the internet, however, this figure has more than doubled to 29.4% as of January 2021. The rollout of the internet will help more Zambians, and Africans as a whole, get involved in gaming as players and for work.
Ecommerce is another sector where the African continent lags behind the rest of the world. However, leading economies like South Africa and Nigeria are showing that digital stores can thrive in the region.
At a global level, retail ecommerce businesses generate more than $4 trillion each year, with annual growth at around 18% per annum. This accounts for 15% of all global retail sales, a figure which also continues to grow year on year.
In Africa, the value of ecommerce is expected to reach $29 billion by the end of 2022. This represents just 0.7% of all global ecommerce sales, and, therefore, has a lot of room to grow.
There are barriers to entry for African businesses wanting to take their transactions online. This includes the lower rates of internet penetration, which reduces the number of potential customers available. However, local infrastructure for shipping goods can be unreliable, leading to logistics headaches for business owners and a lack of trust for consumers.
Access to bank accounts and other financial products is another constraint on the industry. Without a bank account, most consumers can’t buy products and services online, forcing them to use cash in a more traditional setting.
The internet and how widely it is adopted is a common theme. Without a high rate of internet penetration, digital businesses can’t thrive. Thankfully, almost all of the continent is seeing a strong rise in the percentage of people that are connected.
Zambia is one of the leaders in sub-Saharan Africa, with microwave radio relay providing the connection for towns and cities, while domestic satellite systems provide services to rural areas.
However, like most African nations, it lacks spare capacity and resilience in its infrastructure. For example, it currently has only one fibreoptic link to the global undersea cables, providing limited redundancy.
However, deregulation, investment incentives and the formulation of Public Private Partnerships (PPS) should help to speed up the growth in these areas. Even companies like Facebook have been getting involved through projects like Internet.org.
Boosting access to the internet can provide many economic advantages to individuals and the wider economy, yet the current low penetration rates mean there is a huge untapped customer base that telecommunications companies can profit from.
Infrastructure spending outside of telecommunications is another area that is growing. Between 1998 and 2008, the amount spent on infrastructure projects rose from $3 billion to $12 billion.
However, this is just a drop in the ocean. According to the G20, infrastructure needs in Africa exceed $170 billion each year, while the “financing gap” currently stands at somewhere between $68 billion and $108 billion.
Projects that build new roads, railways, and power grids can help African countries trade more freely and easily between themselves and export to the rest of the world.
Some of the most recent examples of such projects include the Trans-Maghreb Highway, which connects 55 major North African towns and cities and 60 million people; the Mambilla Power Plant in Nigeria; the Nairobi-Naivasha Railway which connects Zambia to Kenya, Tanzania, Uganda, Rwanda, and other eastern nations; and the Caculo Cabaca Hydropower Project.
In addition to the benefits these projects deliver when complete, they help to create construction jobs and create demand for local suppliers of raw materials to fulfil.
All of these industries are interlinked, therefore, the success of one contributes to the success of another. Investment opportunities are plentiful right across Africa and could offer decent returns for those willing to get involved.