The expansion of information and communications technologies (ICT) can bring dramatic economic and social benefits to all populations, but this is especially true for low-income communities. Mobile banking, access to information on market conditions, and improved communication with buyers and sellers can help small businesses improve efficiency and grow in size. ICT and telecom services also cut down on transaction and transport costs. Social and individual benefits are wide-reaching, and include highly improved access to educational resources, mobile health care and medical assistance, improved law enforcement, better disaster communication, and the ability to contact relatives, send remittances, and search for employment more efficiently.
The dramatic growth of mobile technology has generated tangible results in Africa. The World Bank estimates that half of the continent’s recent increased economic growth is attributable to the “wireless revolution.” Over half of Africa’s population now lives within range of a GSM (global system for mobile communications) signal, compared to just five percent in 1990. Mobile phone subscriptions in Africa have increased from less than 25 million in 2001 to almost 650 million in 2012, making it the second fastest growing region in the world.
However, prices for ICTs are high compared to other developing regions and coverage is unequal. Mobile penetration rates differ dramatically across countries, ranging from just over 1 percent in Eritrea, to 98 percent in Seychelles, with an average of 28 subscriptions per 100 inhabitants. The growth in access to mobile coverage has not been matched by fixed phone lines, which have increased only incrementally over the past decades. While internet bandwidth has increased twenty-fold between 2008 and 2012, broadband internet is expensive and still only available to a small proportion of the population. Coverage is typically limited to urban areas and to internet cafes, businesses, and high-income residential customers.
Investment in ICT is projected to double from $70 billion in 2010 to over $140 billion by 2015. There are large opportunities in many countries, though challenges remain. With limited public investment and a competitive environment, the private sector could feasibly reach the vast majority of the 43 percent of Africa’s population not covered by wireless voice networks. Expansion of broadband networks is more complicated; a shift towards higher-speed, mass-market internet would require major investment in backbone infrastructure. However, countries with fully liberalized markets for backbone networks have demonstrated rapid growth in competition. In Nigeria, at least four major operators are developing high-capacity, fiber-optic cable networks capable of supporting high-bandwidth services.
Further expansion of ICTs, especially broadband internet, would have a significant, positive impact on the continent’s growth. Experience in other countries suggests that a 10 percent increase in broadband penetration translates to additional GDP growth of 0.5-1.5 percent. The continued expansion of ICT will raise business productivity, enhance individuals’ lives, and contribute to sustained economic growth.