Why Enterprises are Missing a Trillion-Dollar Industry in Sub-Saharan Africa
By Andrew Soper, COO of World Mobile
In 2021, it's hard to imagine that the entire world isn’t connected with the click of a button. Nearly four billion people are without access to the internet, despite data from the International Telecommunications Union showing 97 percent of the world lives within reach of mobile cellular signals. In the Americas, Asia-Pacific, Europe, and Middle East, more than 90 percent of the population is covered by 3G or higher mobile broadband networks. Conversely, more than 71 percent of those living in Sub-Saharan Africa have no Internet access at all. With such wide-reaching network infrastructure in place, why is Africa's connectivity lagging behind?
The 2030 UN Agenda lays out the Sustainable Development Goal 9, which was established in 2015, and calls on states to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.” However, states alone cannot implement this ideal alone, they need the partnership of private sector innovative companies. This is yet another recognition of the need to develop knowledge societies in which everyone has the opportunity to learn and engage with others.
Currently, Africa and the Middle East only account for eight percent of the global telecommunication revenues and 19 percent of economic profit. However, the ROI continues to increase yearly. As of 2019, the ROI in Africa was 55.4 percent of revenue compared to 52 percent in 2018. However, important telecom players on the continent continue to add more network accessibility and better service to those who are already connected.
Over the last decade, all the major tech giants—Google, Facebook, Netflix, Microsoft, and Apple—have seen the potential in Western Africa and established offices in at least one of those nations. Most are starting in Nigeria, due to its emerging young entrepreneurial wave and middle class, earning it the moniker “Silicon Savannah.” The International Finance Corporation predicts there will be more than 230 million jobs on the continent that require some level of digital skills. Even with the newfound interest, there is still a huge wealth gap between the rich and poor, and many Africans are still unemployed or don’t have the skills for these new techy jobs.
As of 2019, 34 million Africans were unemployed, and 12.2 million were people between the ages of 15 to 24 years old. However, over the last 20 years, Africa has continued to increase employment, as the rate grew between 2.5 and three percent. By 2021, labor underutilization is expected to make up 120.5 million people, up from 114.6 million in 2019. While the labor statistics seem promising, they still don't solve widespread economic and socio-economic problems.
Despite strong external market forces pushing and growing network access in rapidly developing nations like Nigeria—which now has 133 million subscribers—connectivity issues still loom large. A large part of it is the cost. For comparison's sake, the average phone plan with unlimited data costs around $70, while in Zimbabwe— a state whose average citizen has far less purchasing power—one GB of data costs $78 or more.
Recent studies show that infrastructure is crucial in economic development. One extra dollar spent on Canadian infrastructure increased the country's GDP between $2.46 and $3.83, according to an OECD report. The same report shows that this is true for the global south as well. Countries need reliable infrastructure—like transportation, internet, phone service—in order to increase interactions, productivity, competition, and market opportunities.
The big tech giants are working hard to implement and establish an infrastructure that’s adaptable to the continent, but it’s not enough. The money these tech companies are funneling into the global south is imperative to stimulate the economy. Facebook has been leading the charge. The social media platform and tech giant has been looking for new ways to expand into Africa for years and is currently adding an undersea cable to help connect more of the continent to the others.
With improved connectivity, the African continent will be able to see a true economic boom that it has been inching toward for decades. The world's business community should look for ways to bolster the continent without making Africa the “new” U.S. With the right connectivity strategy in place, Africa can transform into one of the most sought-after, untapped resources for skilled labor for tech companies looking to expand.
About the Author
Andrew Soper is the COO of World Mobile. He has more than 10 years of experience implementing commercial solar, battery, and telecoms solutions on the ground in Africa for clients such as, the United Nations, Helios Towers, Airtel, Vodacom, Songas, and more. He worked on many notable projects including Elon Musk sponsored X-Prize in 180 remote Tanzanian villages for the Global Learning Initiative.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.