November 14, 2015

Mobile Operator Investments Fueling Innovation and Inclusion Across Sub-Saharan Africa

Sub-Saharan Africa's economic growth over the past ten years was derived from its commodities and natural resources. However, given that China, a key buyer of Sub-Saharan Africa's commodities and natural resources, is experiencing a slowdown in its economic growth, African nations are looking to expand other sectors that will attract investment, increase public finances, improve access to essential services such as education and healthcare, and provide much needed jobs to a youthful population. The GSMA released its latest study on Oct. 8, 2015, which presents the integral role of the mobile economy to the future of Sub-Saharan Africa.

The study's Executive Summary notes: "In 2014, the mobile ecosystem directly employed approximately 2 million people in Sub-Saharan Africa, with the majority working in the distribution and retail sectors and approximately 325,000 employed by mobile operators. A further 2.4 million jobs were indirectly supported as result of the demand generated by the mobile sector, bringing the total to 4.4 million. It is forecast that the industry will grow to support more than 6 million jobs by 2020. The mobile ecosystem also made a contribution to the public finances of the region's governments via general taxation of approximately US$15 billion in 2014."

Furthermore, "The mobile industry remains a key driver of economic growth and employment across the region, making an important contribution given the population growth and high unemployment levels. In 2014, the broader mobile ecosystem generated 5.7% of GDP in Sub-Saharan Africa, a contribution of just over $100 billion in economic value. Migration to mobile broadband and the growth of new services will see this figure increase to 8.2% of GDP by 2020, reflecting how increased access to mobile services generates regional growth and development."

The report correctly explains that "[M]obile technology plays a central role in addressing a range of socio-economic developmental challenges across the region, particularly digital and financial inclusion. Greater digital inclusion will drive economic and infrastructure development, increasing productivity and employment across the economy, and will improve access to vital services such as education and healthcare."

As the mobile industry matures in the coming years, consumers will desire innovative new services and apps. I support the study's assertion in chapter 2.2, "The African app economy": "The rise in smartphone adoption and mobile broadband usage over the next five years will stimulate use of mobile apps, particularly among the increasingly tech-savvy youth segment, and support the emergence of a local app economy that will develop content and services for domestic consumers."

What role do you see the mobile technology sector playing in Africa's economy?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

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