Unleashing full potential of Internet for Africa
“Better is the enemy of good” is an old quote which was attributed to Voltaire and nowadays it can perfectly describe the state of the Internet in Africa. The impact that it has left until today and the benefits it can offer in the future. A new report, title «Promoting the African Internet Economy» gives as a thorough analysis on that matter. Let’s take a look on some numbers. As the report points out “Internet sector makes up an average of 3.7% of GDP in developed economies. Even in the United States, with its large global Internet companies, the sector was just 3.8% of GDP in 2012. It is even less in aspiring and emerging economies, with the Internet contributing just 1.9% to GDP in 2012. In Africa, the Internet contributes just 1.1% to GDP”. As we can understand there is still plenty of room for improvement and growth in the region. Based on data from McKinsey Global Institute
According to analysts, “the Internet can have a strong impact on economic growth. In the developed countries Internet can make up 0,4% of annual GDP growth but in the developing regions it reaches 1.3%”. And they explain that this almost triple figure comes from the impact of the Internet on the rest of the economy. What is most important is that the vast majority of growth (75%) comes from traditional industries. In other words, the Internet is an enabler for the entire economy.
The McKinsey Global Institute identified six industries in Africa — agriculture, education, financial services, government, health, and retail — as best positioned to benefit from the Internet in the immediate future that could benefit from innovations in their respective field. “With the right inroads made, productivity gains across these six key sectors are projected to be valued between $148 billion and $318 billion by 2025.”
For example, digital transformation of interaction between governments and their citizens could create cost savings of 60% to 75% just on administrative tasks. For the healthcare sector, nurses will save 0.5 to 1.0 hour per day. In agriculture, there is likely to be a 10 to 20% increase in production. In the financial services sector, each full-time equivalent employee will annually generate $65,000 more productivity.
Is the creation of a full Internet economy an easy task? Of course not. Broadband highways, increase in device penetration, new Internet platforms and services are some of the things that should be done. Above all a new, tech friendly culture from everyone involved, that will embrace the idea of an Internet Society is needed.
- Huge growth of fintech activity in Latin America
- CHANNEL VAS ANNOUNCES NEW STRATEGIC INVESTMENT PARTNERSHIP
- The need for bridging financial gaps in Africa as a tool of attracting investments
- The financial inclusion gender gap in Sub-Saharan Africa and how we can address it
- African-imposed taxes on Fintech services – and the message people using micro and nano loans have sent.
ADD VALUE TO YOUR BUSINESS