Sub-Saharan Africa (SSA) is a peculiar region. Except for South Africa, its 49 countries are among the least developed in terms of infrastructure and access to basic services on the planet, and more than 50% of its roughly 800 million inhabitants live in rural areas with no access to electricity, running water, or sanitation of any kind. And with a power generation capacity that accounts for only 0.6% of that of the entire world, it is no wonder this whole region suffers from constant electrical shortages in urban areas.
Yet, with an ever increasing foreign investment – especially from China and Russia –, a very young population, 40% of which is less than 15 years old, and a demographic growth rate of 2.3% a year, this region certainly has big potential.
However, turning potential into reality is not easy, and it takes a lot of work and investment. But there is a sector that over the past decade has become one of the stronger forces of development in the region, both as a big creator of jobs and wealth, and as a creator of the basic infrastructure other businesses and ventures, as well as social organizations, need to grow upon. That sector is the mobile industry.
The Mobile Industry in Sub Saharan Africa
Compared to every other region of the world, the mobile industry in SSA is still very limited in terms of subscribers. Unlike regions like South East Asia or Latin America, where mobile penetration has already crossed the 100% mark several years ago, this number has barely reached 30.8% regionwide in this part of the African continent, and remains well bellow 20% in countries like Ethiopia, Burundi, Djibouti, Madagascar, Malawi, and the Democratic Republic of Congo. On the other side of the spectrum, counties like Mauritus, Gabon, and Botswana have reached levels that surpass 70%, figures that are closer to the least developed markets of Central America. Yet, mobile lines have achieved far higher penetration levels than landlines, which are present in less than 5% of the households in the entire region, and are pretty much inexistent in countries like Nigeria, Kenya, and Tanzania.
With vast rural areas deprived of basic services like electricity, mobile networks have a limited reach, and even after $44 Billion were invested in their development over the past decade, and with operators exploring new solutions like powering up antennae with solar and wind power, and even sharing the infrastructure with one another, large extensions, and a messy regulatory environment mean there is still a long way to go.
Mobile Coverage Exceeds that of Other Services
According to the World Bank, even with limited infrastructure, Mobile reaches about 45% of the population, a figure much higher than basic services like electricity, water, sanitation, and even financial services.
95% of Subscriptions are Prepaid
Like in other developing regions, 95% of subscriptions are prepaid. Moreover, while in 2012 there were only 241.4 million subscribers in the region, actual active SIMs reached 473.3 million, as most users use 2 or 3 lines simultaneously, and speculate with the price, putting money into the company that offers a better rate every time.
Mobile Contributes to 6% of the Region’s GDP
Mobile contributes directly and indirectly with 6% of the region’s GDP. This is not only due to the 3.3 million jobs it has already created, but because it serves as a platform to launch all other kinds of services, including mobile financial systems, and even government programs.
SSA is the Fastest Growing Mobile Market
This region is growing at an annual rate of 8%, doubling the world average of 4%. This is due to its huge potential, and thanks to some upwards social mobility in some of the countries, which allow people who were formerly disconnected to purchase a mobile line.
Access to 3G and 4G Technology is Virtually Inexistent
According to the GSMA SSA Report, by the end of 2013 86% of all connections in the region were 2G, with 13.09% being 3G and only 0.1% 4G (in South Africa). This is related not only to the limited infrastructure, but also with the costs associated with deploying newer technologies.
Yet, even with such limited access to value added services, mobile has become the platform upon which thousands of new services and solutions are being built.
Mobile VAS Services Have Enabled the Development of All Kinds of Infrastructure Solutions
It is thanks to access to mobile infrastructure that thousands of new companies and entrepreneurs have been able to start working on groundbreaking and innovative solutions that are bringing progress and development to the entire region, and that are likely to solve many of its shortcomings over the next couple of decades. This will provide people access to all kinds of services not yet available, and create wealth and millions of new jobs in the process.
These are a few of the new doors mobile infrastructure is barely beginning to open for Sub Saharan Africa:
With 56% of all maternal deaths at birth in the entire world (as a comparison, with a population 75% the size of SSA, Latin America accounts for only 3% of maternal deaths worldwide); 69% of all AIDS cases, and 99% of all Malaria cases in the world registered in the region, healthcare in Sub Saharan Africa is a big problem. In that context, simple applications like MedicMobile and Ushahidi, which use legacy technologies like SMS and MMS have allowed medical workers to create simple consultation methods, to track and register new cases of different diseases that allow them to allocate resources properly to fight new outbreaks, and to reach emergencies faster, savings thousands of lives every year, and preventing the spread of diseases.
While big efforts are being made to boost school enrolment, the amount of children out of school in SSA is still 2.5 times higher than anywhere else in the world. Access to mobile devices, however, can prove a good complement to traditional education. Today, mobiles are used as training devices for teachers, and in Tanzania they have become a tool broadcast videos and other support material straight into the classroom. In South Africa, by far the most developed market, in every sense, in the region, some apps like MoMaths have been launched to teach math to kids. In turn, smartphone access could be a gateway to higher education for people all across the region with no access to universities or even electricity to power up a computer. However, for region-wide educational initiative to succeed a lot of coordination and work with local governments has to occur. In the meantime, mobile will certainly be a door to knowledge for millions of people, but probably not a replacement for school, or the ultimate solution for illiteracy.
Perhaps one of the worst shortcomings of SSA is the lack of access to the financial system. Over 500 million people in the region don’t have access to banking services, in part due to poor infrastructure and low development, and partly due to the fact that big rural extensions, where most people live, have rendered brick and mortar banks useless, as they are too far to reach. For that reason, Mobile money (the possibility to pay for products and services via phone, just by sending an SMS) has gained such popularity in the region. About 70% of all mobile money transactions are held in this continent, where over 53 million people have subscribed to a digital money system. One of such services is M-Pesa, operated by Vodafone, Vodacom and Safaricom in Kenya and Tanzania. It allows its users to pay for products, deposit and withdraw money, make transfers, pay bills, and even purchase more minutes for their phones through an SMS, or 2G technologies like USSD, which means anyone with a dumbphone can use it. Mobile is reshaping the financial services landscape in the region, and is one of the areas where most new startups and innovative solutions are being launched, driving evolution faster and farther.
With almost 70% of the population living in rural areas and devoting their lives to agriculture, mobile is certainly doing a lot for Africa. Some programs like M-Kilimo in Kenya have allowed farmers to be in touch with agricultural experts who train them remotely, and provide them with solutions and advice in times of trouble, during droughts, and when other natural disasters occur. Additionally, farmers have access to weather information, and knowledge tools that allow them to optimize their harvest. Also, mobile is can potentially bring improvement of logistics, matching demand with supply, helping farmers sell their production when the price is higher, and avoid doing so when it’s at a low point.
What can Latin America Learn from Sub Saharan Africa
While infrastructure in our region is far more extended than in Africa, with financial services, electricity, healthcare and sanitation reaching larger portions of our countries and their populations, SSA should be an inspiration, in terms of how with the most basic mobile services they are eager and able to create innovative solutions that solve real problems that affect our region, while stimulating the flow of new ideas, and creating wealth.
In the same way as in SSA, the Mobile industry is a big creator of opportunities in Latin America. Now it is our turn to look at our real problems, and use technology to find real solutions.
Photo: Teachandlearn (Flickr)