Africa’s mobile economy is headed towards boom in the next three years

Ganiu Oloruntade
By 2025, mobile’s contribution will grow by $65bn, as the countries in sub-Saharan Africa
Boosted by growing adoption, Africa's mobile economy to hit unprecedented boom
Boosted by growing adoption, Africa’s mobile economy to hit unprecedented boom

In 2016, Facebook (now Meta) CEO Mark Zuckerberg said the “future of the world” would be built in Africa. Zuckerberg made the famous remark during his first visit to the continent. He touched down in Nigeria before travelling to Kenya; the East African country described as the “world leader” in mobile money.

The year he spoke, mobile technologies and services generated $110 billion of economic value in Sub-Saharan Africa, equivalent to 7.7% of the region’s GDP. Between 2016 and now, the numbers are going up.

I guess Zuckerberg was right, after all.

In 2021, mobile technologies and services added almost $140bn to Africa’s economy, according to The Mobile Economy Sub-Saharan Africa 2022 report published by GSMA, an umbrella organization representing mobile operators globally.

Before you begin to wonder what’s responsible for this, GSMA said in its report that 515 million people subscribed to these services in the continent by the end of that year, representing 46% of Africa’s population – an increase of almost 20 million from 2020.

Mobile on the rise

Over the years, technology has changed the way Africans interact with one another. In the wake of the pandemic and its accompanying lockdowns, Africans — like the rest of the world — embraced mobile networks and the internet to connect with friends and loved ones and, more importantly, carry on business transactions easily.

And in the post-pandemic era, mobile retail transactions have continued to rise on the continent. For instance, mobile money transaction values grew 39% in 2021 in Africa to $701.4 billion – making up about 70% of global transaction values, which hit over $1 trillion for the first time.

Mobile economy in Africa.
Image Source: Pew Research Center.

In the same year, the mobile ecosystem formally employed more than 400,000 people in Sub-Saharan Africa and supported another 2.8 million informal jobs and jobs in other parts of the economy. According to a recent report, Africa’s internet economy is projected to hit $180 billion by 2025. 

Read also: Mobile money transactions hit $1 trillion in 2021 – Report.

More money, more subscribers

GSMA predicted in its report: “By 2025, mobile’s contribution will grow by $65bn (to almost $155bn), as the countries in the region increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services.”

The Mobile Economy Sub-Saharan Africa in numbers. Image Source: GSMA Intelligence.

However, this isn’t a standalone growth. The report adds that Africa will add nearly 100 million new subscribers by 2025, bringing the total number of subscribers to 613 million – almost half of the region’s population.

Nigeria and Ethiopia – the two most populated countries in Africa – will account for almost a third of these new subscribers. According to recent data from Nigerian Communications Commission, active mobile subscribers in Nigeria reached 212 million in September. On the other hand, Ethio Telecom — the government-owned telecommunications in Ethiopia — boasts over 58 million subscribers.

The projected growth in mobile subscribers in Africa: Image Source: GSMA intelligence.

The next three years will see Nigeria gain 18 million new subscribers, just as 12 million new subscribers will be recorded in Ethiopia. Trailing behind is the Democratic Republic of Congo with eight million subscribers, Tanzania with six million, and Kenya and Uganda are expected to add five million and eight million, respectively. Other countries in the region will gain 45 million new subscribers by 2025.

Read also: Why 5G will account for only 4% of total connections in Sub-Saharan Africa by 2025.

But Africa isn’t there yet.

Despite the optimistic growth projections, mobile inclusion is still a significant challenge in Africa. Over 700 million people across the continent currently don’t have access to the internet, according to the deputy chairperson of leading connectivity and technology group Liquid Intelligent Technologies, Nic Rudnick.

Though the figure is subject to debate, it reaffirms that Africa has the lowest number of internet connections in the world. In Sub-Saharan Africa, only 40% of the adult population is currently connected to internet services.

Access to affordable internet is another problem hindering the growth of the mobile economy. About 53% of the people in regions with broadband networks remain unconnected due to the high cost of data, according to this 2021 report.

Image Source: BusinessDay.

But, more than ever, improving mobile inclusion on the continent is critical, as mobile “connectivity has the potential to accelerate Sub-Saharan Africa’s digital transformation and drive socioeconomic advancement” in the coming years.

Endeavor Nigeria predicts that 44 million jobs could be created if internet penetration reaches 75%. Another case in point is the 5G network which is expected to contribute around $26 billion to Africa’s economy between now and 2030. However, the technology is off to a rough start on the continent, as over 70% of Africans still have access to only 2G/3G networks. The number of 4G subscriptions only managed to grow by 26 % in 2021.

If anything, African governments and regulators must follow GSMA’s counsel to collaborate to support network investments and improve the affordability of digital services for consumers by adopting forward-looking spectrum management and fiscal policies.

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