Explosion in internet and mobile phone usage to lift African economies
31 October 2011

Mobile phone subscriptions, internet and social media usage in Africa are expected to continue surging to record levels in the next five years. This will occur as the continent's people vigorously embrace communication technologies, writes Standard Bank Group (SBG) research analyst Simon Freemantle in his latest in a series of reports about key trends that will change Africa. 

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

In the latest report, Mr Freemantle argues that the increase in the usage of communication technologies will significantly boost Africa's economic growth prospects. 

He notes that mobile phone subscriptions are expected to grow by about 60% to just under 1-billion by 2015. By 2015 there is expected to be about 800-million subscribers - up from 500-million in 2010, with east and central Africa enjoying the highest mobile subscription growth rates in the world. Already, Nigeria is the world's 10th largest mobile market. 

Mr Freemantle also notes 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, he says, growth rates have been profound with internet usage in Africa growing by a whopping 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. 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," writes Mr Freemantle. 

He points out, however, that despite the growth internet costs remain exorbitantly high, limiting uptake. He notes that in 2010, the cost of a fixed broadband subscription basket in Africa was 291% of gross national income (GNI), 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; those actors - be they firms, development institutions, or 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 Mr Freemantle. 

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