Digital Africa

Digital industry sectors are vital driving forces for development in Africa, and the continent represents a tremendous opportunity for the digital transformation around the globe. The new models emerging from Africa are fuelling a rethink of the entire value chain, from infrastructure to usage.

In 2025, Africa will be home to close to one fifth of the world’s population. GDP will have grown threefold in 10 years. And this creation of wealth will be sustained to a large extent by the various economic sectors’ integration of information technologies, including the more traditional ones such as farming and commerce, but also of course by new activities that are enabling African populations to access government (e-government) and financial (m-payment) services.

Investment momentum…

We are still seeing a strong push for infrastructure rollouts. Telco investments in Africa increased by 50% in four years, going from 8.8 billion EUR in 2012 to 13.3 billion EUR in 2016, to which are added substantial commitments from public funding, chiefly for backbone deployments: one euro on average in government financing, for every six euros in private sector spending. Looking at mobile networks, which account for the lion’s share of operator spending, the GSMA is forecasting a steady increase in spending in Sub-Saharan Africa over the years ahead, equivalent to more than 18% of telco revenues.

… is driving adoption

As concerns adoption levels in Africa, here again we are seeing swift progress. The GSMA estimates that the percentage of people in Sub-Saharan Africa who own a mobile phone will increase from 27% of the population in 2010 to 50% in 2020 and, if the trend continues as expected, up to nearly 60% in 2025. Plus smartphone adoption rates are skyrocketing, with numbers in Sub-Saharan Africa going from 200 million smartphone owners to 500 million between 2016 and 2020, and up to around 800 million in 2025 (or 10% of the global total by that time, versus 5% in 2016). Mobile data traffic will naturally increase as a result: according to Ericsson, the region’s traffic will multiply more than tenfold between 2017 and 2023 –compared to a scant eightfold rise worldwide!

A nascent ecosystem

But there are other challenges that will determine the success of the digital transformation in Africa: access to electricity, and inclusion in the informal economy to name but two/ Above all, business models need to adapt to local market conditions, to a new partnership dynamic and a changing attitude to working with third parties. And there is a whole network of incubators and start-ups working the African soil, and developing services and applications that will provide the life force for tomorrow’s local and regional, if not global economy.

Africa home to a fifth of the world population in 2025, and to one quarter in 2050
Mobile data traffic exploding