By Angela Wamola, Head Sub Saharan Africa, GSMA
Never more so than now has the mobile industry and the wider digital eco-system been so key to the successful transformation of the continent. The Covid-19 pandemic has shown us that access to digital services is crucial to keep economies active and guard against the negative social effects. According to Mobile Economy Report Sub-Saharan Africa 2021, mobile technologies and services generated more than $130 billion of economic value added (8% of GDP) in Sub-Saharan Africa in 2020. This will reach $155 billion by 2025 as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services.
By the end of 2020, 495 million people had subscribed to mobile services in Sub-Saharan Africa, representing 46% of the region’s population – an increase of almost 20 million since 2019. And with more than 40% of the region’s population under the age of 15, young consumers owning a mobile phone for the first time will remain the primary source of growth for the foreseeable future. There will be around 120 million new subscribers by 2025, taking the total number of subscribers to 615 million (50% of the region’s population).
At the end of 2020, 303 million people across Sub-Saharan Africa were connected to the mobile internet, equivalent to 28% of the population. With digital services set to be at the heart of a post-pandemic world, the urgency to bring unconnected communities online, particularly vulnerable groups such as women, has never been greater. By 2025, more than 170 million people across the region will have started using mobile internet for the first time, taking the penetration rate to just under 40% of the population.
Mobile money in particular, is driving productivity. Driven by the global pandemic, international transactions increased by 65% during 2020. According to the GSMA’s 2021 State of the Industry Report on Mobile Money, there were significant increases in the adoption and use of mobile services since the start of the Covid-19 pandemic, particularly mobile data and mobile money, reflect the utility of mobile technology in challenging times. The report found that the number of registered accounts grew by 12 per cent globally in 2020 to more than 1.2 billion – double the forecast. In fact, the fastest growth was in markets where governments provided significant pandemic relief to their citizens.
As economies recover and restrictions ease, mobile technology will be even more integral to how people live and how businesses operate. It will enable new digital solutions for small and large enterprises and support the growing use of online channels by consumers. The pandemic has highlighted the increasing importance of digital technology to responding effectively to crises and planning for recovery. At the same time, the crisis has the potential to accelerate the continent’s digital transformation and create resilient digital jobs in Sub-Saharan Africa.
The continued rollout of 4G and the first stages of the 5G era open up opportunities in areas such as healthcare, digital commerce, industrial automation, and smart city infrastructure. The GSMA encourages sector-wide dialogue with governments and policymakers to help foster mobile adoption, usage, and digital inclusion, which in turn will help drive economic growth across African countries.
Governments and policymakers should implement policies that enhance access to connectivity and drive investment in more resilient digital infrastructure for the future. For example, governments and regulators in Sub-Saharan Africa should adopt forward-looking spectrum management and fiscal policies.
Mobile sector taxation is a barrier to digital inclusion in Sub-Sahara Africa, where mobile services are subject to a high level of sector-specific taxes. Fiscal policies that encourage rather than hinder much-needed investment in infrastructure will help to improve consumer access to digital services.
Affordability of service and smartphones is one of the key barriers to connectivity, which is why we recently made the case to rethink mobile taxation in Tanzania to highlight the impact of sector-specific taxes on mobile broadband adoption. In July, the Ministry of Finance and Planning in Tanzania abolished value-added tax on smartphones. This is an important move to improve the affordability of smartphones and significantly help close the usage gap in Tanzania. We welcome further dialogue to discuss the reduction of other mobile sector taxes such as airtime tax and mobile money transactions, to get more people connected, and online.
According to GSMA’s State of Mobile Internet Connectivity Report 2021, 2020 ended with more than half of the world’s population using mobile internet. This translates to over 4 billion people connected to the internet via mobile devices. Even with this impressive growth in mobile internet connectivity, both in terms of mobile internet coverage and usage, the digital divide still exists, and more work needs to be done to bridge it. 3.4 billion people or 43% of the world is still not utilising mobile internet despite living in areas with mobile broadband coverage.
This year, the GSMA celebrated a major milestone, having impacted over 100 million lives globally through its Mobile for Development (M4D) activities. In Africa alone, M4D initiatives have reached over 45 million people across 128 projects. M4D helps drive innovation in digital technology to reduce inequalities by forming partnerships between the mobile industry, tech innovators, governments, and the development sector. The programme has impacted the lives of over 126 million people by empowering underserved populations to build a better future and support the drive for sustainable business and large-scale socio-economic improvement. Almost all 17 of the UN Sustainable Development Goals (SDG) have benefitted with the greatest number of lives impacted within SDGs for Hunger, Gender Equality, Industry Innovation and Infrastructure, and Decent Work & Economic Growth.
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