We don’t hear a lot of good news about Africa. From Ebola to Boko Haram to migrants drowning in overloaded boats headed for Europe, it’s hard to call Africa a “good news story.”
But behind the headlines, there is something really good happening in Africa: The mobile Internet. According to data from the International Telecommunications Union (0), there were 175 million active broadband connections in Africa in 2014 – of which 172 million were mobile.
The real story is in the growth: The ITU data shows that Africa has added more than 150 million mobile broadband connections since 2010, compared to just two million fixed connections. GSMA estimates there will be more than 525 million smartphone subscriptions (1) in Sub-Saharan Africa by 2020.
It should surprise no one that this growth has been fueled not by IMF grants or government subsidies, but rather by private enterprise and entrepreneurship. A mix of local and global operators – firms like Celtel, MTN, Orange and Vodacom – invested over $44 billion (2) in Sub-Saharan Africa between 2007 and 2013. In 2013, mobile network operators accounted for close to two percent (3) of Sub-Saharan Africa’s GDP.
Governments have played an important role, mainly by privatizing state telecom monopolies, allowing new firms to enter, and avoiding excessive regulation. The effects of such policies are unmistakable. Ethiopia (4), for example, continues to cling to its government monopoly – retarding the rollout of advanced services and resulting in some of the lowest mobile and Internet penetration rates on the continent – 34 percent and 1.3 percent, respectively. Further south in East Africa, the Tanzanian government has allowed competition to flourish, resulting in deployment of advanced networks and dramatic growth in penetration. (5) At 70 percent, mobile penetration is more than twice as high as in Ethiopia. The gap in Internet penetration is even more stark: 18 percent in Tanzania, or more than an order of magnitude higher than in Ethiopia.
The African mobile Internet is a lot more than a communications network: It is providing the essential foundation for economic development. Most notably, over half of the world’s 255 mobile banking services (6) reside in Sub-Saharan Africa, bringing financial services (7) to underbanked families and businesses alike, and making available the credit and liquidity needed (8) for a commercial economy to flourish and grow.
Governments have also played a role in enabling the mobile money revolution – again, by resisting the urge to overregulate. GSMA estimates the number of active mobile money accounts is over 200 percent higher (9) in nations that have adopted a light-touch regulatory approach than in countries like Botswana, Mozambique and South Africa, where regulation has stifled growth.
But the African mobile Internet isn’t just, or even mainly, about money. Mobile Internet access is making it possible for citizens to access a growing variety of civic and community resources. For example, services like Stepping Stone (10) in Ghana provide training in literacy and entrepreneurial skills via low-cost, interactive lessons over the phone, while mKazi (11) in Kenya provides mass mobile job search services, narrowing the information gap between workers and potential employers. mPedigree (12) authenticates medication via SMS for consumers in Ghana, Nigeria, Kenya, and elsewhere, protecting against fraud and counterfeit medicines. In Tanzania, Tigo Kilimo (13) provides farmers with information on weather forecasts, market prices, and agricultural best practices via text message; at the end of 2014, the service had close to half a million subscribers (14).
Looking ahead, McKinsey estimates that, by 2025, Africa’s Internet ecosystem will directly contribute $300 billion to GDP, plus an additional $300 billion via productivity gains (15) in other sectors. If it is true, as some have argued (16), that the 21st Century will be the African Century, it will be in large measure because of the contribution made by Africa’s amazing mobile Internet. That would be good news indeed.