The Africa gambling industry: huge traction of new players, but lost value

According to World Bank estimates. The economic growth in sub-Saharan Africa is forecast to fall sharply in 2020 due to the Covid-19 crisis that will cost the region between $37 billion and $79 billion output losses for 2020 due to the combined effects including trade disruption and reduced remittance, tourism and foreign aid.

Perhaps most countries in the region will experience a decline in growth ‘real gross domestic product. Due to the pandemic, it estimated around 20 million jobs in formal and informal sectors are under threat. The United Nations puts the figure much higher at up to 50 million people. Which will be unemployed with a value of 70% of the people who will be affected will be youths based on the significant numbers of young people living in the region.

In contrast, sports have been the most followed event in Africa, especially football, common among youth and adults in the region. Substantial numbers are involved with sports betting based on the widespread and growth the sector have experienced in the area over the past decade. It touted that Africa’s gambling industry worth billions of dollars today. The gambling industry’s significant growth cannot be attributed only to the love of sports. But still, coupled with digital transformation, young digital native, mobile-first penetration now a norm, internet connectivity, especially the exponential economic growth the region has experienced in the last decade. Though with the millions of people who are estimated to lose their jobs and an estimated weak economy, which will see the majority of the young people jobless, several will consider other sources of making money.

Perhaps it’s poised the number of participants of those who will be involved with sports betting will increase in sub-Saharan Africa. But still, the value of the gambling industry projected for 2020, to drop sharply due to the weak economic situation expected, will have significant effects on players due to critical economy that will result in soft financial power.

In contrast, players in which many would lack the full financial power to stake high along with the fluctuation of a currency against the dollar, which many of the betting companies partners are foreign investors. Perhaps it will result in a drop in revenue for sports betting brands regarding these bettors won’t be able to stake with a large amount of money due to the stringent economy, which will result in loss of value for the sector. No doubt that the participant of new players will increase because those that would lose their job, which previously is not involved with sports betting will consider looking for a quick way of making money. However, the region is known to be the home of significant numbers of youths in the world. Hence, as stated above, an estimated million people lose their jobs due to the COVID-19 pandemic crisis in sub-Saharan Africa.

The sharp decline of the economy GDP in Africa projected to account for 3.7% in 2020, but the pandemic crisis, as seen in the planned African economy, expected to shrink over the next couple of months. According to recent reports by (AFDB) Africa Development Bank amid COVID-19 pandemic impact on the African economy outlook, real GDP in Africa projected to contract by 1.7 percent in 2020, which corresponds to a GDP drop of 5.6 percentage points from January 2020. Pre-COVID-19 projection in the worst-case scenario, if the pandemic continues beyond the first half of 2020, there would be a deeper GDP contraction in 2020 of 3.4 percent, down by 7.3 percentage points from the growth rate of 3.9 percent projected before the Covid-19.

The expected inflation rate in sub-Saharan Africa projected to 9.32 percent in 2020. However, it expected that inflation would be higher than the previous projection of 9.32 percent due to the loss of revenue from tourism. Trade disruption has had significant effects on the African economy. However, the Covid-19 pandemic has had its own positive and negative side for gambling operators. However, still, stakeholders must look inwards and realize that the current situation is temporary. Still, the Africa gambling sector, the future looks bright as a new set of players is emerging in the industry.

 

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