Africa is the world’s biggest online market of the future. Trouble is, the future never seems to arrive. Why has Africa been so slow to grab hold of the opportunities that the internet offers? Richard Walker examines how Africa’s innovative genius is being stymied by poor internet access.
A wise man once said, ‘Brazil is the country of the future – and always will be’. If you are of a pessimistic turn of mind, you might say the same about Africa’s digital prospects. Mobile phones have made a huge difference to the economies of Africa, with almost as many people in emerging markets now owning mobiles as in the developed world.
But the next step remains almost as distant as ever: the use of broadband internet for more complex online activities – buying, selling, learning and exchanging information – remains the preserve of a tiny African elite.
The WEF produces a ranking of 148 countries according to their overall readiness to enter the digital world – the Networked Readiness Index – and even the highest scoring Africa country Mauritius is only at 48th place, while the next highest is South Africa at 60th place. Kenya is at 92nd place, and Nigeria languishes at 112th place.
The WEF says that one problem all African countries face is that their communications infrastructure is costly to access – but more importantly, according to the report, they also have what WEF calls ‘weak business and innovation ecosystems, which result in very low positive economic and social impacts’.
What does that mean? It means that governments don’t work hard enough to develop their internet economies, that as a consequence digital skills are lacking, and that the rapid economic and social dividends that can come from easy access to the internet and its technologies are not accruing to Africa.
This lack of positive impact is all down to the failure of African countries to embrace broadband, argues the WEF.
While the attention of commentators has been fixed on African mobile phone innovations such as M-Pesa, the innovations with the most economic and social impact are now found in different forms of internet, particularly mobile internet that demands broadband high-speed data connections. And mobile internet is still difficult to access in Africa, and where it can be accessed it is expensive.
Take Nigeria, the most populous and also (since the recent rebasing of Nigeria’s GDP calculation) the biggest economy in sub-Saharan Africa. Ten years ago Nigeria had no mobile phones.
Today 70% of Nigerians have mobile phones. Yet broadband internet penetration is less than 10% – not very surprising given that a modest 100 gigabyte mobile data package costs around $420 a month, in a country where over four fifths of the population survive on less than $2 a day.
Indeed, for most of the population of Nigeria, mobile broadband is not available whether wanted or not. According to MTN, the biggest mobile operator in Nigeria, fast 3G mobile broadband will be available in every state of the country by the end of the year – but that does not mean it will be available throughout every state.
A shortage of mobile infrastructure and the high cost of building new mobile masts mean that most rural areas will continue to have no or limited mobile coverage – which is why Nigeria, despite having four superfast fibre-optic cables for international data connections, uses only around 5% of that capacity.
According to the Nigerian national broadband plan, at least 35,000 more mobile towers would required to deliver the broadband connections that would use that international capacity.
Africa bringing up the rear
Africa is not alone in lagging behind the developed world in mobile broadband usage. According to the WEF, in all developing economies fewer than 9% of people have mobile broadband subscriptions, compared to over 64% in the developed world.
But Africa is clearly lagging more than most: in the WEF Network Readiness Index sub-Saharan African countries occupy 20 of the bottom 40 places, with several countries such as the Democratic Republic of Congo and the Central African Republic not rated at all due to lack of data.
What is the cause of Africa’s continued failure to close the digital divide? A history of underinvestment in infrastructure plays a big part, but in many cases the real deficit is in internet, communications and technology (ICT) skills.