Mobile In African Economies Now Accounts For 6.7% Of GDP

Avatar
Written by Dana Sanchez

Africa now has more than half a billion mobile phone subscribers, and it has been the fastest growing telecoms region for several years, but subscriber growth rates are beginning to slow down.

The number of smartphones is expected to triple in the next five years, but African uptake of mobile will likely converge with the global average as affordability become more of an issue, according to a new GSMA study.

GSMA is a U.K.-based association of mobile operators worldwide, with 800 operator members and about 300 companies in the broader mobile ecosystem.

Mobile technology is now adding more than $150-billion – 6.7 percent of gross domestic product – to African economies, as mobile subscribers passed the 500-million mark and new opportunities for consumers, businesses and governments are unlocked, a new GSMA study shows, according to a report in Engineering News.

The Mobile Economy: Africa 2016 report highlights the increasing contribution of Africa’s mobile industry to regional economies, including employment and public funding, and mobile’s role in financial inclusion, said GSMA director general Mats Granryd.

Although Africa has been the fastest growing telecoms region for several years, the report warns that “subscriber growth rates are now beginning to slow and will increasingly converge with the global average, as affordability challenges become a key barrier,” Forbes reported.

By 2020, mobile technologies and services are expected to contribute around $214-billion, or 7.6 percent of GDP, as countries benefit from improvements in productivity and efficiency on the back of the increased take-up of mobile services.

The three largest markets — Egypt, Nigeria and South Africa — accounted for a third of all mobile subscribers in Africa at the end of 2015. Continent wide, more than 557-million unique mobile subscribers were recorded.

The new GSMA study predicts the number of smartphone will triple in the next five years, Forbes reported.

“The number of unique mobile subscribers is forecast to reach 725 million by 2020, accounting for 54 percent of the expected population by this point,” Granryd said.

Africa’s mobile ecosystem supports 3.8-million jobs and resulted in tax contributions of $17 billion in 2015.

This is expected to increase to 4.5-million jobs and tax contributions of $20.5 billion by 2020.

The GSMA report shows that mobile has stimulated innovation and entrepreneurship across Africa, emerging as the “platform of choice for creating, distributing and consuming innovative digital solutions and services.”

About 310 technology hubs, including 180 accelerators or incubators, are active across the continent.

“Many local and global innovators and tech entrepreneurs are now using the expansion of advanced mobile infrastructure in the region and the growing adoption of smart devices to deliver mobile-based solutions that directly appeal to local interests and cultures,” the report said.

African subscribers are increasingly migrating to broadband, driven by network rollouts. Mobile broadband connections accounted for 25 percent of total connections at the end of 2015. That’s expected to grow to almost 66 percent by 2020, the report said. The dominant mobile broadband technology over the next five years will be 3G, but 4G network launches are growing.

Mobile operators support the mobile ecosystem by opening up APIs to third-party developers in areas such as messaging, billing, location and mobile money, which has allowed start-ups to scale quickly, Granryd said.

“Mobile technology is also playing a central role in addressing many of the social challenges in Africa, including the ability to provide citizens with official identities, tackling the ‘digital divide’ by enabling access to the mobile internet, and delivering financial inclusion via mobile money services,” Granryd said.