{"id":24385,"date":"2011-05-28T12:00:43","date_gmt":"2011-05-28T16:00:43","guid":{"rendered":"http:\/\/www.sierraexpressmedia.com\/?p=24385"},"modified":"2011-05-28T12:00:43","modified_gmt":"2011-05-28T16:00:43","slug":"in-africa-hi-tech-is-taking-centre-stage","status":"publish","type":"post","link":"https:\/\/sierraexpressmedia.net\/?p=24385","title":{"rendered":"In Africa hi-tech is taking centre stage"},"content":{"rendered":"

In many countries, the ICT sector is no longer marginal<\/em><\/p>\n

For 48 long hours, employees of Senegal\u2019s National Telecommunications Company cut telephone and Internet connections to the rest of the world. That bold action, in August 2010, sought to force the government to back down on a plan to grant a US company exclusive rights to manage incoming international phone calls.<\/p>\n

The shutdown itself sent shockwaves throughout the Senegalese economy. Dozens of institutions were affected: banks, travel agencies, customs offices, call centres, calling card vendors, the airport, the harbour. Newspapers ran angry editorials. \u201cOur economy lost CFA50 billion,\u201d (US$100 million), one headline complained.<\/p>\n

The event vividly illustrates just how important the information and communications technology (ICT) sector has become in Africa. It is not only a major industry in its own right, but also a backbone for many others.<\/p>\n

Unparalleled growth<\/strong><\/span><\/h2>\n

Nascent only a decade ago, ICT in Africa has been growing in recent years at an unparalleled pace. In some countries, various studies note, the \u201cinformation economy\u201d is becoming one of the main drivers for growth more generally.\u00a0 In 2009, South Africa\u2019s ICT sector generated $24.2 billion and contributed more than 7 per cent to the country\u2019s gross domestic product (GDP). In Tanzania, its share reached 20 per cent of GDP. Everywhere on the continent, the ICT sector is expanding rapidly, with annual revenues now estimated at around $50 billion.<\/p>\n

Investments in mobile phones, the continent\u2019s dominant information technology, have grown from $8.1 billion in 2005 to almost $70 billion today, reports the UN\u2019s International Telecommunication Union (ITU). Mobile phone companies are now major sources of tax revenue for African governments, averaging 7 percent of tax receipts.<\/p>\n

\u2018Ongoing success story\u2019<\/strong><\/span><\/h2>\n

Behind these impressive numbers lie three major changes over the past decade. The first was Africans\u2019 unexpectedly fast adoption of ICT services. In 2000, 11 million people in Africa had mobile phones. Five years later the number had grown to almost 200 million, and is now approaching 400 million.\u00a0 The pace of growth has defied all predictions and is an \u201congoing success story\u201d in Africa, notes the ITU.<\/p>\n

There also has been steady growth in Internet access on the continent, from 3 million users in 2000 to more than 100 million in 2010. This upward trend will continue as Africa literally becomes wired to the rest of the world with the completion\u00a0 of a number of undersea communications cables. In the meantime, Africa has emerged as a world leader in \u201cmobile web\u201d technology \u2014 Internet access through mobile phones \u2013and a pioneer in the development of sophisticated mobile banking, health and education services.<\/p>\n

Outside investors rush in<\/strong><\/span><\/h2>\n

A second major development has also contributed to ICT economy\u2019s rapid growth: the rush to Africa of foreign investors attracted by the sector\u2019s high profit margins.<\/p>\n

In 2008, Britain\u2019s Vodafone, the world\u2019s largest mobile operator in terms of revenue, started an African shopping spree in Ghana when it acquired 70 percent of Ghana Telecom for $900 million. It has since made its way into Egypt and Kenya, and has become the majority owner of South Africa\u2019s Vodacom.<\/p>\n

France T\u00e9l\u00e9com has also gotten into the act, announcing plans to invest more than $8.8 billion in Africa and the Middle East. Most notable among foreign investors in Africa\u2019s ICT economy, however, is Bharti of India. In March 2010, Bharti\u2019s aggressive search for a continental presence led it to acquire the Africa assets of Kuwait\u2019s Zain for a record $10.7 billion.<\/p>\n

This frenzy of acquisitions is a sharp break with the past. A decade ago, only a handful of African businessmen and companies saw opportunities in the continent\u2019s changing landscape. When Sudan-born Mohamed Ibrahim launched the Celtel mobile phone network in 1998, his company shared much of the African market with just two other companies, South Africa\u2019s MTN and Vodacom.<\/p>\n

No more. And even though returns on investments in the region\u2019s ICT sector are now less than they once were, they still remain attractive to Western companies struggling with stagnant markets and low profits at home. Five years ago in Africa, \u201cit took half a year to recover investments in infrastructure for new clients,\u201d says Marc Rennard, head of France T\u00e9l\u00e9com\u2019s African and Middle Eastern operations. \u201cNow it\u2019s more than two years. But that\u2019s still pretty good.\u201d<\/p>\n

Regulatory reform<\/strong><\/span><\/h2>\n

And third, the policies and institutions needed to help Africa\u2019s ICT sector reach its potential are finally in place. \u201cTelecommunication growth has been encouraged by the easing of regulatory restrictions by African governments and increased liberalization across the market,\u201d notes the influential international accounting and business services firm Ernst & Young.\u00a0 Today most African governments have opened up their mobile phone and Internet markets to competition and to private investment and set up new regulatory authorities to oversee the burgeoning sector. Their powers usually include issuing licences and arbitrating disputes.<\/p>\n

As governments devise multi-year plans for ICT development, national regulatory agencies have also aggressively promoted public wider access to information technologies. In Kenya, where parliament adopted an ambitious plan to transform the country into a regional ICT hub, the national regulator recently asked operators to extend coverage to rural areas in exchange for reduced licencing fees. It also required them to bring down their charges for mobile phone banking.<\/p>\n

Rwanda, Egypt, Tunisia, Kenya, South Africa and the Seychelles are among the countries that have adopted ambitious ICT plans with a view to developing their own knowledge-based economies. Long known for mining and tourism, Africa\u2019s booming ICT sector is making a great many people think again.<\/p>\n

By Andr\u00e9-Michel Essoungou<\/em><\/p>\n

Editor\u2019s note:<\/strong> In little more than a decade Africa\u2019s embrace of mobile phones and the Internet has revolutionized the ways Africans talk to each other. Now the technology is revolutionizing the ways Africans do business. <\/em>Africa Renewal\u2019s Andre-Michel Essoungou follows the money to the future<\/em>.<\/p>\n

Stay with Sierra Express Media, for your trusted place in news!<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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