May 8, 2018

Mobile Ecosystem to Be Worth $51 Billion to West Africa Economy by 2022

The role of the mobile technology sector in driving economic growth is a topic that is discussed regularly in this blog. Whether it is in India, Latin America, Southeast Asia, or Sub-Saharan Africa, the mobile ecosystem can play a vital role in empowering billions of people while achieving the 17 Sustainable Development Goals (SDGs), which seek to end poverty, protect the planet and ensure prosperity for all. This post focuses on a report, The Mobile Economy: West Africa 2018, produced by the GSMA Intelligence, the research arm of London, England-based GSMA,

Available in both English and Fran├žais, the report presents three major points:

Mobile adoption on the rise

"By the end of 2017, there were 176 million unique subscribers across the West Africa sub-region, comprising the 15 member states of the Economic Community of West African States (ECOWAS),"  Overall subscriber penetration reached 47% in 2017, up from 28% at the start of this decade. Despite the remarkable subscriber growth in the sub-region in recent years, and indeed across Sub-Saharan Africa, more than half of the region's population do not yet subscribe to a mobile service."

Moreover, "Subscriber growth will be driven by a demographic shift in the coming years, as many young adults take out a mobile subscription. Over the period to 2025, around 72 million new mobile subscribers will be added in West Africa, taking subscriber penetration to 54%.

The study importantly explains that "the transition to mobile broadband is gaining momentum across West Africa. 3G remains the dominant mobile broadband technology, but 4G adoption is rising rapidly from network expansion and greater availability of 4G devices. The number of smartphone connections has more than doubled over the last two years to reach 112 million, accounting for 35% of total connections on average at the end of 2017."

Mobile contributing to GDP and employment

The GSMA study says the mobile ecosystem contributed $37 billion to the West African economy in 2017, equivalent to 6.5% of GDP. "The mobile ecosystem consists of mobile operators, infrastructure service providers, retailers and distributors of mobile products and services, mobile handset manufacturers, and mobile content, application and service providers. The use of mobile technology also drives improvements in productivity and efficiency for workers and firms. 3G and 4G technology allow workers and firms to use mobile data and internet services. This improves access to information and services, which in turn drives efficiency in business processes across many industries, including finance and health. This impact of mobile internet is particularly significant where fixed infrastructure is poor and mostly confined to large cities and business & industrial districts."

What is more, "Mobile operators and the wider mobile ecosystem provided direct employment to more than 200,000 people in West Africa in 2017, predominantly in the retailing and distribution of services and handsets. In addition to this, economic activity in the ecosystem creates jobs in other linked sectors as a result of the demand generated by the mobile sector. Going forward, we expect the economic contribution of the mobile ecosystem to continue to increase in both relative and absolute terms. In value-added terms, we estimate that mobile will contribute $51 billion to the West African economy by 2022, equivalent to 7.7% of GDP."

Mobile delivering greater inclusion and empowering consumers

Encouragingly, "The number of mobile internet subscribers doubled over the last four years to reach 78 million, nearly half of the total number of mobile subscribers, by the end of 2017." The number of registered mobile money accounts in the sub-region reached 104.5 million in 2017, while the total value of transactions for the same period reached $5.3 billion. The rapid adoption of mobile services and the funding and infrastructure gaps in the provision of essential services present an opportunity for local innovators to create digital solutions that address a wide range of social and economic challenges across different countries in the sub-region. As of February 2018, there were 142 active tech hubs across West Africa."

Based on my experience of working in West Africa, I agree with the report's assertion:
Collaboration among all stakeholders is required to sustain growth and innovation in the mobile industry across the sub-region. In addition to the work of operators to expand and improve networks, significant efforts from governments at all levels are needed to create the right conditions for continued investment. At the supranational level, ECOWAS is well placed to convene and facilitate dialogue between multilateral stakeholders; serve as a hub for knowledge sharing and dissemination with regards to best practices; and provide a platform to harmonize differences in approach towards key issues that impact the mobile industry across the sub-region. At the country level, national and municipal governments have a role to play in addressing fiscal and regulatory issues that directly impact investment sentiments, especially on capital-intensive infrastructure deployment and the rollout of innovative mobile-based services.
Infographic: GSMA Intelligence
Are you engaged in West Africa's mobile economy? If so, what advice to you have in creating solutions that will end poverty, protect the planet and ensure prosperity for all?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

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