Despite funding constraints, space technologies are critical to advancing societal well-being and long-term growth in the recovery from the COVID-19 pandemic. The Africa Finance Corporation (AFC) $2 billion facility fund is made available to NewSpace companies and organizations to support space projects for sustainable development.
The space economy is an integral part of the economic development of any nation. As an essential component of the growing digitization of the world, space technologies in particular help bridge the digital divide, monitor climate change, extreme weather and consumption of natural resources, and provide new economic opportunities. Government investments and funding remain crucial for the growth of space activities, particularly in research and development (R&D) and the acquisition of space products and services. Therefore, policymakers need to better understand and map the use of space technologies in government departments and society as a whole.
The African space sector is growing at a pace fast enough to claim a significant market share of the global space economy. In 2021 alone, Africa’s space budget was $548.6 million. This represents an increase of 9% compared to 2020 and nearly double (94%) the 2018 budget. In addition, the satellite market has grown due to the expansion of national space programs and increased commercial activities , and is now considered an essential tool for sustainable development.
Space technologies are essential to promote social well-being and sustainable growth in the post-pandemic recovery of COVID-19. Accordingly, private and public sector stakeholders in the EO industry must drive much-needed change to help African economies recover faster from the effects of the global epidemic. On the contrary, the space sector faces funding challenges as well as a hostile economic climate in which private entities can thrive. This is partly because the industry was dominated by the government until the arrival of the NewSpace players.
Public funding (both domestic and international) is most common source of funding for space programs in Africa. However, it is largely spent on government-owned space projects through its space agency and institutions. In South Africa, however, the government-private financing approach is common. Another source of funding comes from foreign governments, the majority of which is obtained through research and development partnerships with a foreign institution, space agency or newspace company with the capital to support such initiatives.
On the positive side, investors are increasingly aware of the potential and prospects behind the more than 283 private and public NewSpace companies operating in Africa, most of which are in need of funding. As a result, there has been a steady increase in the involvement of international and African financial institutions such as the World Bank, European Commission, African Development Bank (AfDB), West African Development Bank, Société de Industrial Development (IDC) and the Development Bank. of Southern Africa (DBSA), among others.
For example, the World Bank committed $424 million to the Africa Regional Communications Infrastructure Program and provided the O3b with debt financing of $50 million. Similarly, the African Development Bank authorized a credit of USD 25 million for the New Dawn satellite project in 2009. With the help of Nedbank, AfDB and IDC, an additional USD 250 million was raised for the New Dawn project. A project to design, build, launch and operate a pan-African satellite communications system at the 33° East orbital position, which is suitable to serve the African continent.
Another funding opportunity for NewSpace companies will be available in May 2022. In response to the global COVID-19 pandemic and the Russian-Ukrainian crisis, the Africa Finance Corporation (AFC) has announced a facility fund of 2 billions of dollars to help economic recovery and resilience in Africa.
The facility would be distributed through AFC loans to selected commercial banks, regional development banks and central banks in several African countries, providing them with much-needed hard currency liquidity to support trade and other economic operations. These institutions will be able to take advantage of the global fundraising network established by AFC to obtain funds at reasonable rates.
Space technologies are drivers of economic development and innovation in a number of sectors. Many cases of using space for development abound in Africa, ranging from agribusiness to health, environment to telecommunications. Space applications can be used to support projects in the fields of education and distance learning, social care, medical operations support, surveillance and security, telemedicine, epidemiology and resource planning.
Ademola brings her skills and business acumen to lead as an industry and program analyst, conducting market research, writing industry reports and overseeing event execution.