Africa offers RFID potential despite high cost

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17 September 2008 News

Information from Frost & Sullivan

The use of radio frequency identification (RFID) applications is advancing and creating significant opportunities in many African countries.

Various sectors have already started using this technology even as green field opportunities still exist and projects for RFID deployment continue to increase.

New analysis from Frost & Sullivan finds that there is a particular demand for low-cost tags in the African environment.

“The low uptake of RFID in Africa provides a spectrum of green field opportunities for its growth, since several potential sectors have not yet deployed the technology,” notes research analyst Letticia Mulenga Nkumbula. “Government support for various RFID projects in the continent indicates that a number of new sectors will adopt this technology.”

Theft, fraud and counterfeit products are widespread in many parts of Africa. In this regard, RFID applications provide security and tracking features that are sought by various sectors in order to reduce losses and improve operational efficiency.

However, the cost of deploying RFID applications is generally high. As a result, the cost of using RFID for low-value/volume items cannot be justified. The high number of small- to medium-sized sectors in the continent further exacerbates the situation.

“Despite the various benefits that can be achieved using RFID applications, the industry is dominated by low-cost alternatives that obstruct it from realising its full potential,” cautions Nkumbula. “Alternative products are able to meet the requirements of several sectors of different sizes, regardless of the product value or volume of production.”

Designing low-cost tags to meet different industry requirements is critical to obtain early market positioning, particularly for price-sensitive African markets. Emerging sectors that can use RFID need to be identified, while ensuring that well-established links with such sectors are made in order to take advantage of the available opportunities.

For more information contact Patrick Cairns, Frost & Sullivan, +27 (0)21 680 3274, [email protected], www.frost.com

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Africa offers RFID potential despite high cost

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