The “chain reaction” of technology in Africa

The “chain reaction” of technology in Africa

It’s an era of enormous changes in Africa as the continent has experienced vast transformations in its society and economy. As a result, we have witnessed the phenomenon of rapid urbanization (with more than 40% of African population living now in urban areas) or the technological and the economic growth which are steadily happening throughout the continent.

All those changes happen in parallel and affect each other. For example, Africa’s total population has grown by 63% since 1990, while urban growth rate has reached 3.6% (double the world average). At the same time, a growing number of consumers living in cities have greater disposable income and technology use (both in urban and rural areas) has correspondingly exploded. According to McKinsey, more than 50% of urban population is online, primarily through mobile (54%), mobile broadband subscriptions in Africa has grown by around triple the global expansion rate, LTE networks have exceeded 100 (Wikipedia) and total subscriptions’ number should have already reached 1 billion.

 

This progress has led to some paradoxes that could not be find in the Western World and are indicative to the multiple role of technology in Africa. Here are some examples. While the vast majority of African adult population (about 75%) doesn’t use formal or semi-formal financial services, more than 220 million are registered mobile money users. And, while two in every three people in Africa have no access in electricity or other basic utilities, mobile subscriptions’ penetration is over 82% (Ericsson Mobility Report).

But as the digital world of the continent is expanding it also transforms key sectors. Besides finance (mobile money solutions, fintech), we see significant changes in health (remote diagnosis and treatment), retail (e-commerce), agriculture (information on weather, crop selection, access to markets), education (remote learning) through innovative solutions and web-based technological ventures from large corporations and a new generation of African entrepreneurs. Some of them are already in mature stage, some are expected to flourish in the near future.

This “chain reaction” will continue to happen in the coming decade powered by the continued infrastructure investment developments in mobile and fixed networks. As a result, analysts estimate that Internet is projected to take hold on a much larger scale, adding billions of dollars to Africa’s gross domestic product (GDP). According to the well-known McKinsey’s report “Lions go digital”, Africa’s iGDP* should grow to at least 5% to 6% of the overall GDP (until 2025), meeting that of leading economies of the world. Combined with mobile, total contribution of technology in Africa’s GDP will be well over 10%. This performance is at least impressive for a continent which made a late start but now is accelerating.

*iGDP is the measurement of Internet’s contribution to the overall GDP

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