Sub-Sahara Africa is invariably on the wrong end of the spectrum on a number of major economic and social indicators. However, in terms of mobile technology adoption it is apparently holding its own.

A 2019 report by the GSMA asserts that the region will continue to record the fastest growth in mobile subscription rates, with Kenya, Nigeria, South Africa, Tanzania and Ethiopia taking the lead.The survey notes that mobile technologies would contribute $185 billion to the economy, representing 9.1 percent of GDP as at the end of last year. This is an increase from $144 billion – 8.6 percent of GDP – the previous year.

The mobile economy also contributed 3.5 million direct and indirect jobs in 2018, while generating $15.6 billion revenue to states in form of taxes.

The report underscores the key role of the informal economy that accounts for a large part of the mobile ecosystem in Sub-Saharan Africa. About 1.2 million of the 1.7 million directly employed by the mobile ecosystem are informally working in the distribution and retail mobile services.

GSMA’s robust economic outlook is based on a number of factors including a growing penetration of mobile use, rising number of active users of the internet and increase in broadband coverage.

Sub-Saharan Africa, the survey points out, will remain the fastest growing region, with a compound annual growth rate (CAGR) of 4.6 percent and will have 167 million more subscribers by 2025, driving the total subscriber base to just over 600 million, representing nearly half the region’s population
Nigeria and Ethiopia will record the fastest growth in terms of subscriptions at 19 and 11 percent respectively.

This means 31 million new subscribers for Nigeria, while translating to 18 million for Ethiopia. DRC will clinch third place with 15 million new mobile users, while in East Africa, Tanzania takes the lead with 10 million, while Kenya will come second boasting 9 million new connection.

Across the region, the reports notes, demographic changes will result in large number of young consumers becoming adults and owning a mobile phone for the first time. This segment of the population, GSMA notes, will account for the majority of new mobile subscribers, resulting in a significant shift on mobile usage trends.

The period between 2018 and 2025 is also projected to experience a speedy growth in terms of transition from those connected to basic phone services to those linked to digital platforms, enabling an increasing number of people to tap into e-commerce and a variety of services available in the digital ecosystem.

All these trends promise to drive ecommerce, spawn disruptions in various sectors of the continent’s economies, and bring about inclusive development that is expected to lift millions out of poverty and set them on the path of prosperity.

The period between 2018 and 2025 will also see uptake in mobile internet in SADC and EAC overtake Ecowas and ECCAS respectively.

Smartphone connections will more than double by 2025 with EAC witnessing largest incremental growth, led by Rwanda and Tanzania, with connections, which currently stand at 33 percent, going up to 66 percent. SADC whose connections are at 41 percent will rise to 68 percent, Ecowas will witness an increase from 38 percent to 67 percent.

The report states that the mobile money ecosystem remains the pride of Africa. By the end of last year, there were 395.7 million registered mobile money accounts in the region, representing nearly half of total global mobile accounts.

The region is now served by more than 130 live mobile money services, many of them led by mobile operators, and a network of more than 1.4 million active agents.

Today more than 60 percent of the adult population in a growing number of countries, including Ghana, Kenya and Zimbabwe has a mobile money account.

The robust mobile money sector is expected to drive financial inclusion and growth of e-commerce whose sales reached $16.5 million in 2017 and are expected to hit $29 billion by 2022. This trend is primarily driven by lifestyle changes among the expanding middle class, increasing internet smartphone adoption, and the growth of digital payment solutions.

“In mobile solutions Africa is setting the pace and this should be sustained through laying of broadband services in underserved areas,” Telkom CEO Mugo Kibati told the Mobile 360 conference in Kigali Rwanda last year in July.

His sentiments were echoed by Nancy Matimu, head of market development for Sub-Sahara Africa. She said to expand digital infrastructure to far-flung areas, telcos need to make sacrifices for the common good. “Firms need to look beyond profits,” she said at the GSMA conference.

A study by Deloitte projected that expanding internet access in Africa to match levels in developed countries could push up productivity by as much as 25 percent , generating $2.2 trillion in GDP and more than 140 million jobs.

Startups are poised to reap big from innovations and shift to digital economy. Most partnerships driven by mobile operators are focused on helping startups – especially those with the potential to make a broad and deep positive impact among the population at the base of the pyramid – obtain funding, skills, mentorship and digital solutions to enable them to expand.

“This will help the startups to attain efficiencies, build capacity, reach as many consumers as possible,” said Max Cuvellier, GSMA’s head of mobile for development utilities and ecosystem accelerator programmes.

“Startups have a great opportunity because they are flexible and are agile enough to adapt to new technologies.”

UK senior innovation advisor Magdalene Banasiek said her country is keen on partnerships that focus on Sub-Saharan startups with a transformative agenda.

“These startups need help to scale and build sustainable operations as well as resilience to cope with climate change,” she said in Kigali at the Mobile360 conference which brought together mobile firms, innovators, State actors, investors, among a diverse group of players.

The bullish outlook presented by the GSMA report and Kigali meeting on use of mobile technology to drive change however obscures the stark challenges that the continent face, especially when compared with advances in the developed world.

One of the major obstacles is the lack of infrastructure, especially broadband coverage. At the end of last year, 499 million people across the region were covered by mobile broadband (MBB) but do not subscribe to the mobile internet. About 304 million are entirely not within the MBB reach, meaning the region has to earnestly grapple with ‘coverage gap’.

“There are valid concerns that the technology push will increase digital divide,” said Bart Hofker while addressing the Mobile360 conference last year.

Anna Ekeledo, Executive Director of Afrilabs, a pan-African network of technology and innovation hubs, said local content should largely inform the solutions being designed for the region.

“We need local perspectives and approaches as we search for solutions for the challenges we face,” she said, adding that adoption of technology is not a race but a means to transforming lives. Aside from broadband, reliable electricity, which is a key part of connectivity infrastructure, is a major barrier to internet expansion. Phones and computers need power to run.

This is a major hurdle as large swathes of Africa are still unconnected. Then there are unfavourable regulatory environment and expensive handsets, especially smartphones which needed for digital transactions.

To bridge the infrastructure deficit, the conference heard, needs vast sums of money from the private and public sector.

To solve these challenges there is a need for new thinking, said ITU Africa Director Andrew Rugege who also lamented that most innovations about Africa are by outsiders.

African youth, he noted, are innovative and have groundbreaking ideas but are held back by unavailability of the right tools to actualise their dreams.

Bharat Vagadia, senior director regulatory affairs, OOREDOO Group said there is need to do away with regulations that stifle growth.

“The cost of compliant to the regulations are too high, ” Mr Vagadia said and call for flexibility to allow innovations to thrive.

Ngozi Megwa, MasterCard Senior Vice President, Digital Partnerships for Middle East and Africa, however, said the regulatory environment will progressively change for the better because political leaders are increasingly becoming receptive to technological changes.

“There is a desire and will among leaders to design regulatory framework favourable for innovations,” she said.

Another challenge pointed out repeatedly at the Kigali conference is the digital divide along gender lines and between rural and urban areas.

Some of the factors attributed to the potentially rising threat of this divide are widespread illiteracy, lack of broadband coverage and costly handsets.

In 2015, a GSMA survey found that 28 per cent of women and 22 percent of men in Kenya perceived technical literacy and confidence as a barrier to owning and using mobile phones.

Director General of Rwanda Utilities Regulatory Authority (RURA) said ignorance will be Africa’s undoing in efforts to tap the vast opportunities of the digital economy. This, he warned is likely to exacerbate the digital divide and attendant inequalities.

Ms Megwa said infrastructure, awareness and provision of information as well as other key accelerators are critical for businesses to be innovative.

To bridge the divide, experts called for access of critical infrastructure – broadband as well as electricity – and affordable handsets.

“There are concerns advances in mobile technology may result in wider gender divide. The more technological systems get complicated, the more women shy away,” said Harriet Lwakatare, Director Customer Service Operations, Vodacom Tanzania.

Ms Megwa said digital gender inclusion should be one of the key objectives going forward.
The recent G7 leaders forum acknowledge the threat of rising digital divide in the region, especially along gender lines, and promised to finds ways to help about 400 million women, most of who are found in rural, from being left behind by digital economy.

The leaders’ programme, which will require $255 million for a start is aimed at empowering millions of women by enabling them to tap digital technology and mobile banking from being disempowered.
Studies show that in Sub-Sahara Africa, women are 13 percent less likely to own a mobile phone and 41 percent less likely to use mobile internet than men.

Then there is discussion on whether technology will eat up more jobs than it create. The advent of internet of things and robots is poised to significantly cut low-skilled manufacturing jobs


editor

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