How to Generate Revenue in Africa’s Space Market; Excerpts

On 15 September 2023, Space in Africa hosted the second webinar from its webinar series titled “How to Generate Revenue in Africa’s Space Market.“ Over 200 attendees registered from NewSpace industry leaders, heads of national space agencies, private investors and venture capitalists, NewSpace founders, policymakers and government officials, and other critical stakeholders to share strategies on revenue creation for African space businesses. 

Check here to read excerpts from the previous webinar.

The aim was clear: to share invaluable insights and strategies for revenue creation within the African space business landscape. This webinar also extended an open invitation to foreign and indigenous space industry stakeholders, fostering a vibrant exchange of ideas and opportunities. This event’s central objective was to equip participants with the knowledge and tools to navigate this emerging market successfully. The focus was primarily on procurement procedures practised by African space agencies, compliance requirements, and essential contractual considerations. 

The speakers lent their expertise throughout the webinar, ensuring the participants gained valuable insights into different procurement methods, including competitive tenders and direct negotiations. Additionally, the event delved into space agencies’ intricate selection criteria and evaluation processes when awarding contracts, empowering attendees to fine-tune their bidding strategies.

Check here to rewatch the webinar.

These speakers included Dr. Tidiane Ouattara, AUC Space Expert and Coordinator, GMES and Africa; Dr. Robert van Zyl, Managing Director, AAC Space Africa; Dr. Doreen Agaba, Technical lead, Department of Aeronautics and Space Science, the Science Technology and Innovation Secretariat, Uganda; Dr. Yeshurun Alemayehu, Deputy DG, Ethiopian Space Science and Geospatial Institute. 

Here is a snapshot of the webinar’s major highlight.

Dr. Tidiane, while explaining the critical factors and procedural aspects that pertain to procurement within the African Union Commission in the context of African space projects, emphasised that the African Union Commission functions as the secretariat of the African Union, consisting of 55 member states. He underscored that any actions taken within the African Union are contingent upon the willingness of its member states. Regarding space-related matters, Dr. Tidiane acknowledged that the organisation follows a stringent procurement process, which can be accessed online for reference. He then highlighted the crucial question of how to succeed in applying for a project within this framework.

Furthermore, Dr. Tidiane pointed out that there are two primary avenues for accessing financial resources for projects. One is through the African Union Commission’s program management units, which play a central coordinating role. The other avenue involves consortia, key players in African space initiatives. Consortia typically consist of leading institutions from one country and at least five institutions from five other African countries. Dr. Tidiane noted that these institutions can use their procurement processes, provided they align with AUC principles.

To maximise one’s chances of securing a contract, Dr. Tidiane stressed the importance of understanding the procurement processes of the organisation issuing the call. However, he emphasised that this is just one aspect and that the more significant part of success lies in comprehending the organisation’s objectives, expectations, and culture. He encouraged space experts and entrepreneurs to prioritise business development and suggested hiring individuals skilled in crafting strong business proposals. Dr. Tidiane also emphasised the significance of networking and building relationships within the industry.

While exploring the requirements or attributes distinguishing a business from its counterparts when they seek to collaborate with Uganda’s Department of Aeronautics and Space Science emphasised the importance of building negotiation skills and the capacity to assess service providers effectively. She highlighted the qualities that set service providers apart in this context. According to her, what distinguishes them is their ability to create mutually beneficial partnerships and offer something unique, even if they may not be industry giants. Dr. Doreen emphasised the need to thoroughly assess services before engaging, including examining the provider’s track record in similar projects, even if they were in different sectors.

Furthermore, she stressed the value of speed and agility in responding to urgent needs and crises, as the industry often faces challenges related to lengthy processes. In conclusion, Dr. Doreen underscored the importance of these attributes for entities aiming to stand out and succeed in this field.

Speaking on the same subject, Dr. Yeshurun outlined the selection criteria and requirements that distinguish businesses when procuring space equipment and engaging in international bids. According to Dr. Yeshurun, these criteria primarily revolve around technical expertise, financial stability, past performance, innovation and technology, regulatory compliance, cultural fit, and risk management. He emphasised that technical expertise is paramount, focusing on contractors possessing substantial experience in the field, particularly in manufacturing satellites. The evaluation considers the number of satellites produced and their quality, performance, and cost.

Financial stability also holds significant weight, ensuring contractors can deliver products within specified timelines and meet contractual obligations. This assessment includes a review of financial statements and references from previous customers. Past performance is crucial in meeting deadlines, delivering high-quality work, and fulfilling contractual obligations. Innovation and technology are critical considerations as the organisation seeks cutting-edge solutions for its projects. Additionally, compliance with regulations and standards, compatibility, cultural fit, and a demonstrated ability to manage risks are essential in the procurement process. Dr. Yeshurun stressed that these criteria collectively form the foundation for selecting contractors and partners in the space sector procurement activities.

Dr. Robert, while sharing some practical insights into procurement processes in Africa, began by emphasising that anyone, regardless of their industry background, has the opportunity to bid and contribute to the emerging African space industry. Furthermore, he highlighted the shift from mere procurement exercises to creating a lasting impact in Africa’s space endeavours. He underscored the significance of scalability, agility, and innovation in responding to the evolving space landscape. Dr. Roberts also stressed the pivotal role of governments in driving major bids and the importance of building trust and relationships over time to anticipate bidding opportunities.

Dr. Roberts emphasised that credibility, both in technology and heritage in space, plays a crucial role in winning bids. He advocated forming strategic partnerships and assembling multidisciplinary teams to comprehensively address technical, regulatory, business, and legal aspects. In addition, Dr. Roberts highlighted the importance of presenting the social impact, return on investment, and sustainability aspects in bids, especially in the African context, where resources are limited. He emphasised that a successful bid should contribute to Africa’s sovereign space capability and leave a lasting legacy. According to him, building long-term relationships is the foundation for successful businesses in the field.

Similarly, Dr. Tidiane, while discussing how businesses can establish a strong reputation and track record, reiterated that the space business is fundamentally similar to any other form of business. However, he concluded that it may differ in terms of content and cultural aspects. Dr. Tidiane stressed that the key strategy for success starts at the company or institution level. This entails ensuring robust infrastructure and, critically, having a well-qualified workforce capable of translating end-user needs into opportunities. Dr. Tidiane highlighted the importance of transparency in recruiting qualified individuals, including experienced professionals and innovative young talents.

Sustainability, he noted, is closely linked to innovation, and he encouraged businesses to establish strong networks with other companies, both within and outside of Africa. He stressed the importance of playing to one’s strengths and leveraging the expertise of others in areas where a business may need to be stronger. Collaboration, according to Dr. Tidiane, is an essential aspect of success in the field of space. Dr. Tidiane underlined the significance of understanding the institutions with which one seeks to collaborate. He explained that deep knowledge of an organisation is vital for crafting a successful proposal or offer. He provided an example of doing business with the African Union Commission, emphasising the need to thoroughly understand the organisation’s goals and operations.

Furthermore, Dr. Tidiane discussed two approaches to pursuing opportunities: creating new ones and seizing existing ones. He suggested that businesses should focus on creating opportunities for long-term sustainability, which involves offering additional value beyond the initial request. In conclusion, Dr. Tidiane pointed out the importance of building trust in African business culture. He noted that Africans start with smaller engagements to establish trust and gradually expand their collaborations. Networking, he emphasised, plays a crucial role in understanding the nuances of African business and discovering hidden opportunities beyond the written rules.

While providing insights into how Uganda has allocated its space budget and the strategic priorities behind these allocations, Dr. Doreen explained that there has been a shift in budgeting structure in Uganda, moving from sector-based to programme-based allocation. According to her, this change prioritises critical programmes, particularly those related to technology and innovation, that can enhance the social value of the economy. These programmes often span across different sectors and ministries. Budget allocation is now based on demonstrating social value, sustainability, and risk assessment. The credibility of suppliers and partners, liability insurance, and the ability to demonstrate the interusability of projects are crucial considerations.

Dr. Doreen also emphasised the importance of innovation and assessing the long-term utility of investments to prevent rapid obsolescence. The focus is on projects that can improve the lives of individuals and justify their impact, even allowing for supplementary funding if well-justified. According to Dr. Doreen, training and negotiation skills for experts were highlighted as essential in ensuring that both parties benefit from agreements, and vigilance is needed to prevent unintended losses, such as valuable orbital slots.

Speaking on the same subject, Dr. Yeshurun explained that budget allocation is primarily determined by the country’s priorities, national development plan, and the institute’s specific objectives. This year, their institute intends to focus on satellite development, establishing an AIT centre, and various capital projects. Last year, they faced challenges in attracting competitors for a project but were optimistic about improved participation this year due to increased budget allocation. Their budget allocation priorities revolve around research and development, infrastructure development, satellite development (including launching services), and capacity building. Dr. Yeshurun emphasised the importance of procuring products and ensuring engineers are trained to utilise them effectively. International collaborations are also a key focus for the institute as it seeks partnerships with African and other international entities to achieve its strategic priorities.

While speaking on how AAC Space Africa deals with complex contractual requirements within the industry, he highlighted the importance of negotiating contracts from a position of strength, emphasising that a solid technology background, skilled team members, and expertise are crucial for successful negotiations. He also noted that innovation and collaboration should not be seen as mutually exclusive and that complex negotiations often revolve around intellectual property (IP) and liability clauses. Dr. Robert cautioned against unregulated leakage of IP and mentioned that ownership of IP could impact liability. He stressed the significance of considering security and logistics, especially in exporting across borders, and mentioned the need for local presence and visibility in Africa for the effective execution of contracts. He acknowledged that navigating through complex agreements, especially in international and regional business, can be challenging due to various factors such as government funding and national interests.

While elaborating on the significance of aligning with market needs and understanding the different segments of the space industry and how companies can ensure they are developing products and services that genuinely serve these needs, Dr. Tidiane highlighted the emergence of space business within the African Union’s ecosystem and the relevance of the African Continental Free Trade Area, based in Accra, in fostering continental trade. He emphasised that succeeding in the space business, like other sectors, hinges on providing specific services tailored to the needs of institutions and citizens rather than just products.

Dr. Tidiane cited examples such as the University of Ghana providing weather information to fishing communities and Seekers in Kinshasa offering water level data for the Congo River to aid navigation. He stressed the importance of understanding the market’s needs and developing products that genuinely serve them across all space industry segments.

Regarding contracts and partnerships, he underscored the significance of aligning with people’s needs and emphasised that this differentiation would garner more interest from potential collaborators. Dr. Tidiane also noted that the African Continental Free Trade Area presents an opportunity for space companies but highlighted the need for greater private sector involvement in Africa’s space sector. Finally, he mentioned that while procurement information is available online, the key to success lies in leveraging intelligence beyond what is explicitly documented, whether in technical or financial proposals.

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