The report states that few alterations of Africa’s macroeconomic vista have been as noticeable and inclusive as the growth of the continent’s information communications technology (ICT) sector. Already, Africa’s base of the pyramid consumers spend $4.4-billion a year on ICT.
“Across the world, technological enhancements are fundamentally altering the way individuals and firms connect, communicate and transact, providing new avenues of commercial nutrition. Unlike in the past, Africa has not been left stranded,” said Standard Bank research analyst Simon Freemantle.
In its report, the third in a series of five reports focusing on trends driving Africa’s ongoing economic and commercial reinvigoration, Standard Bank analyses how Africa is using technology to progress in developmental terms.
The report highlights that the mobile telephony landscape in Africa has altered “seismically”.
In 2000, there were 15-million mobile subscriptions in Africa, and by the end of 2010, there were over 500-million. It is expected that by 2015 there would be almost 800-million subscriptions.
Over the next five years, East and Central Africa would see the highest mobile subscription growth rates in the world. Already, Nigeria is the world’s tenth-largest mobile market.
The report also highlights that more Africans are connecting to the Internet.
Currently, there are about 120-million Internet users in Africa. Standard Bank notes that while penetration is relatively low, growth rates have been profound.
Since 2000, Algeria has seen Internet users increase from 50 000 to 4.7-million, and Nigeria from 200 000 to 44-million. Much of this growth has been attributed to elevated smart phone mobile penetration.
However, the report maintains that Internet costs remain “exorbitantly high”, which is limiting uptake.
The report also emphasises that Africans are eagerly embracing social media. While overall subscriber numbers are comparatively small, Africa is one of Facebook’s fastest growing markets.
There are currently around 32-million Facebook users in Africa, meaning that about 27% of African Internet users have Facebook profiles, compared to 18% of Internet users in Asia.
Of Egypt’s 6.5-million Facebook users, almost half joined in the first six months of 2011.
The report also states that new fibre-optic cables will raise connectivity. A range of mostly privately-funded cables set to land, or having already landed, on Africa’s east and west coasts, are set to dramatically alter connectivity. Provided that intra-regional backhaul networks are built, this would lower costs for a wide range of African Internet users.
Already, Africa’s international bandwidth capacity has increased 120 times to over 10 Tb/s since 2008.
Africa has pioneered innovative ICT solutions, says the report.
“Challenging market conditions have necessitated innovative approaches to unlocking opportunities in Africa. In mobile money transfers, Africa has been pioneering.”
It is estimated that there would be 350-million African mobile money subscribers by 2015, an increase from virtually zero in 2007.
In this regard, Safaricom’s M-Pesa system has led the charge. In 2010, some 14-million Kenyans transferred $7-billion through M-Pesa.
“Evidence of the potential economic gains from greater ICT access is mounting,” affirmed Standard Bank.
Information from the World Bank, states that for every 10 percentage points increase in broadband penetration, economic growth could lift by 0.73 percentage points in typical African economies.
An additional 10 phones for every 100 people in a country could boost gross domestic product by 0.8 percentage points.
However, optimism in the ability of ICT to raise productivity and growth should not disguise the substantial impediments remaining.
While new submarine cables are likely to alter the cost and speed of broadband connections, the majority of Africans will remain unconnected should supportive backhaul networks not be created.
“Fortunately, private funding for ICT in Africa is considerably less elusive than it is for other infrastructure priorities. Yet, too many markets remain inadequately liberalised for the gains of telecommunications to effectively percolate throughout the economy,” says the report.
Countries adopting pragmatic and investor-friendly policies in the ICT space will gain an edge.
“Through embracing telecommunications with such vigour, Africans have bridged a gap in the developmental trajectory with much of the emerging world—creating solutions based on local market fundamentals, suited to the proclivities and pockets of African consumers, and geared towards broadening the beneficiaries of nascent socioeconomic gains,” concludes the report.
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