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ICT 'to drive African economic growth'

2 November 2011

Mobile phone, internet and social media use in Africa is expected to continue surging over the next five years, significantly boosting the continent's growth prospects, Standard Bank Group analyst Simon Freemantle says in a report about trends set to change Africa.

The first two reports in a series - aimed at unpacking what Freemantle sees as the five most prominent trends driving Africa's ongoing economic and commercial reinvigoration - deal with Africa's rising, youthful and urbanising population.

He notes that by 2015 there is expected to be about 800-million mobile subscribers - up from 500-million in 2010, with east and central Africa enjoying the highest mobile subscription growth rates in the world. Nigeria is already the world's 10th largest mobile market.

More Africans connecting

The report finds that more Africans are connecting to the internet and are eagerly embracing social media faster than populations in other regions.

There are presently about 120-million internet users in Africa. While penetration is relatively low, Freemantle says growth rates have been profound, with internet usage in Africa growing by 2 527%, compared to a world average of 480% between 2000 and 2011.

"Much of this growth has been inspired by elevated mobile penetration. While overall subscriber numbers are comparatively small, Africa is also one of Facebook's fastest growing markets," he says.

According to the report, there are currently around 32-million Facebook users in Africa. In all, 27% of African internet users have Facebook profiles, compared to 18% of internet users in Asia.

"Of Egypt's 6.5-million Facebook users, almost half joined in the first six months of 2011."

Internet growth restrained by costs

Freemantle notes that despite the growth, internet costs remain exorbitantly high, limiting uptake. In 2010, the cost of a fixed broadband subscription basket in Africa was 291% of gross national income, compared to 27% in Asia and 2% in Europe.

"The availability and affordability of mobile and broadband services can, as it already has in key markets, support economic growth and provide one of the means through which Africa's human capital advantage can become pronounced."

The pace of change is likely to continue to be robust, the report notes, adding that companies, institutions and governments approaching these alterations innovatively will be rewarded.

"Through embracing telecommunications with such vigour, Africans have bridged a gap in the developmental trajectory with much of the emerging world, creating solutions based on local market fundamentals, suited to the proclivities and pockets of African consumers, and geared towards broadening the beneficiaries of nascent socio-economic gains," says Freemantle.

SAinfo reporter