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In 2006, Africa lagged behind in mobile phone terms. With just 129m subscriptions, the continent struggled to keep up. For many people, phones were prohibitively expensive, network coverage unsuitable for use beyond urban centres, and even with a phone, functionality was limited.
Today, the continent boasts over 1 billion active mobile phone subscriptions. That dwarfs fixed phone contracts, and is now the main mode of communication and digital transactions in Africa.
Smartphones and 5G technology are proving essential to Africa’s economic growth in recent years, highlighting their importance in the modern economy and potential role in pushing poverty to the wayside for many people on the continent.
Why Mobile Penetration Matters
For most of us, smartphones are seemingly used for little that we’d actually call useful. We play games beyond what is reasonable, we follow a crush on Instagram, message our friends and family. We may send an email every once in a while.
We don’t think about how smartphones have changed how we do business on a daily basis. Just ask yourself: when did you last go into a real bank? Buy a train ticket outside of an app? Or find your way using an old-school map. Exactly.
For people living on the African continent, it goes even beyond that. Handsets have enabled Africans to access financial, employment, healthcare, and education services like never before. For some, it’s opened opportunities that have lifted them out of poverty.
Smartphones have given access to what we’d call basic services, but they also extend to what is arguably banal. Yet these activities reflect Africa’s quickening game of catch-up in all aspects of economic and cultural life. For instance, the iGaming industry is now leading, with mobile casinos from South Africa to Zimbabwe becoming a real nuisance to traditional land-based stalwarts.
Smartphones More Affordable
According to data from 2016, over 80% of Africans now own a smartphone. That number is undoubtedly higher today. That’s because smartphones are becoming increasingly affordable, with even those technically in poverty able to afford a basic feature model.
Until recently, many people in Africa were not able to afford a smartphone. Those able to run a mobile phone plan were often stuck with models akin to the old-school Nokia 3310.
In particular, a fall in prices to mid-level models is allowing many people to adopt high-end devices that feature 5G capabilities. According to the United Nations, access to smartphones is critical, considering they serve as the primary mode of access to the internet.
Smartphones and Economic Growth
It’s difficult to measure the effects of smartphone penetration on a developing country’s economic growth, but it’s undoubtedly true that it’s a critical factor. According to the GSMA, a 10% increase in smartphone penetration equates to a 4% growth in economic productivity.
Not only that, doubling mobile data usage can increase annual GDP growth by 0.5%. For those not familiar with economic growth figures, these are significant numbers we’re talking about.
We have already seen the effects of mobile phone penetration in recent years. Here’s a very happy stat indeed: by simply becoming customers of Kenya’s mobile finance service M-Pesa, 2% of Kenyans managed to leave poverty behind between 2008 and 2014. In Africa, access to smartphone technology has seismic potential for economic growth.
Countries Investing in 5G
What will perhaps be most significant in the next few years is access to a reliable 5G network. Without it, Africa will yet again lag behind the rest of the world in terms of connectivity and performance.
With this in mind, several countries have financed large-scale initiatives to introduce 5G. Seven countries, including Ethiopia, South Africa, Nigeria, and Tanzania, have rolled out viable commercial 5G services in the last few years.
Others are also pushing to drive access to 5G, with Kenya rolling out a pilot scheme last year. Ghana, on the other hand, postponed commercial rollouts as of now, with pilot plans failing to launch. Yet the country is continuing attempts to move to the next stage of development, reflecting the realization that connectivity is key to further economic growth.
Long Way to Go
Despite these encouraging numbers, there is still very much a long way to go. According to the Economist, one of the main challenges is widening access to scattered farms and tiny villages dotted around the continent. How can companies install and power phone masts without incurring crippling losses?
Yet there is light at the end of the tunnel. The cost of connection is rapidly falling, with modern cable grids expanding at a rapid pace. Big tech firms like Google have invested to install expensive fibre networks in major cities like Kampala and Accra, improving the quality of access. Satellite technology is coming on also, with the potential to cut costs down to 1/50th in the coming years.
We can be positive about the current situation. Despite the fact that many African citizens remain unconnected, we can flip the argument by framing it this way: with the positive changes we have already seen in Africa’s economy due to mobile penetration, imagine just how much good can happen when remote populations are also given access.
Online Reporter