Digital connectivity an economic imperative for East Africa

Minister for Information, Communication and ICT, Nape Nnauye (left), handing over a recognition certificate to Vodacom Tanzania PLC Managing Director Sitholizwe Mdlalose, in recognition of the company’s efforts to bridge the digital divide in the country. On the right is Mwananchi Communications Ltd Managing Director Bakari Machumu.

Photo credit: Vodacom Tz

What you need to know:

In 2019, according to the GSMA Mobile Economy 2020 report, mobile technologies and services generated 9 per cent of GDP in Sub-Saharan Africa, or $155 billion of economic value.

Digital connectivity provided by Telcos and Mobile Network Operators (MNOs) is well placed to make a positive impact on access to resources by women, ‘formalise’ informal employment, and improve access to education for all.

Communication and internet access are transformational. They empower citizens to meaningfully contribute to their countries’ economies and shape sustainable economic futures.

“The ever-evolving supply of technology gives rise to life-enhancing opportunities. The more technology penetrates into our communities, the more we can expect everyday problems to be resolved by its use. One fascinating example is of tele-medicine, where patients need not travel vast distances to reach doctors. Rather, they go to a connected centre and get consultations, and, in some cases, have surgeries performed remotely,” says Sitholizwe Mdlalose, Vodacom MD.

Sitholizwe Mdlalose, Vodacom Managing Director.

Photo credit: Vodacom Tz

Connectivity

It is evident that connectivity is key to unlocking broader economic growth across Africa. According to the GSMA Mobile Economy 2020 report, mobile technologies and services generated nine per cent of GDP in Sub-Saharan Africa in 2019 – a contribution that amounted to more than $155 billion of economic value added.

The mobile ecosystem also supported almost 3.8 million jobs (directly and indirectly), and made a substantial contribution to the funding of the public sector, with $17 billion raised through taxation. By 2024, mobile’s contribution will reach about $184 billion as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services.

We must connect more people with more services

Internet connectivity across Africa is still low, and there is a need to use innovative ways to connect the unconnected and the underserved. The GSMA found that the mobile market in Sub-Saharan Africa would reach several important milestones over the next five years: Half a billion mobile subscribers in 2021; one billion mobile connections in 2024; and 50 per cent subscriber penetration by 2025. These achievements will be underpinned by operators’ continued investment in network infrastructure. 

To support broader digitalisation, major infrastructure expansions will be required, including those in backbone networks and last-mile connectivity. It is estimated that governments, development finance institutions, companies, and investors, will need to spend $100 billion on key ICT infrastructure by 2030 to achieve universal broadband access, including 250,000 new 4G base stations and 250,000km of fibre cable. And with 5G on the horizon, although not yet at the point of roll-out in most African countries, there is no question that there is a significant task ahead.

The digitisation of our continent will not happen overnight. This is a long-term commitment that is only possible through sustained, robust and authentic collaboration. Partnerships with governments, businesses, and organisations, both local and international, are an important cornerstone of continued success in digitalisation. We must maintain a collaborative approach to build a future that is fair, inclusive, and sustainable. Initiatives such as the African Union Commission Digital Transformation Strategy and the UN Digital Cooperation Roadmap provide sensible frameworks for how this could progress.

“Vodacom Tanzania’s vision is to take Tanzania to the digital age while changing lives through technology. We are ready to continue to support government, industry and social sector institutions to expand and broaden digital offerings, foster an enabling environment for rapid digitisation, and speed up infrastructure investments, among other things. Collaboration will be crucial to moving digitisation goals forward and enabling more citizens to reap the benefits of access to our connected economy,” said Sitholizwe.

Inclusive connectivity

The Covid-19 pandemic clearly highlighted the crucial role that digital connectivity plays in enabling economies to run smoothly, but also revealed a digital divide across Africa. This divide goes beyond being connected or unconnected. It divides those who are connected to rudimentary services through 2G, from those who have access to the breadth of the internet offered by 4G. It divides those who have the digital skills to use broadband from those who do not. It divides those who can consistently afford connectivity from those who must use work-arounds to get online.

During the pandemic an affordable smartphone with a fast, low-cost connection was no longer a luxury. It was a lifeline, essential for everything, from accessing health data to following school classes; from finding a job to paying bills, not to mention connecting with friends and family.

User cases

Digital connectivity enables greater delivery of social services when partnered with the appropriate institution or government organ. For instance, Vodacom’s free to learn portal (e-fahamu) offers free access to educational content for students at all levels of education from primary to secondary school, and leverages on partnership with the Tanzania Institute of Education and the Universal Communication Service Access Fund (UCSAF) to ensure a wide reach.

Vodacom Tanzania PLC came up with a cost-free website named e-Fahamu, which provides approved education content to pupils and teachers. The platform, which is being controlled by the firm's CSR arm Vodacom Tanzania Foundation, uses the company's wide coverage network to deliver the content.

Photo credit: Vodacom Tz

Another crucial partnership between the Government of Tanzania and Vodacom Tanzania Foundation saw the collaborative design and roll-out of m-mama solution in Sinyanga regions, which contributed to a reduction of 38 per cent in maternal deaths and 45 per cent in perinatal deaths by providing pregnant women and children with emergency transportation when needed.

In the last few years, there has also been an acceleration of tech services offered to telco users, that affect their regional activity directly. Vodacom expanded its international money transfer portfolio to allow remittance from over 200 countries worldwide, making trade easier and faster. A partnership with M-Pesa-VISA allows subscribers to create virtual debit cards for on-line transactions. The central banks of the EAC countries also came to an agreement about regional financial interoperability, and the MNOs jumped on the opportunity, with Vodacom being among the first to offer full regional financial interactivity, not just on mobile money platforms, but also to banks. This made East African trade immediately more convenient and inclusive.

Vodacom Tanzania, through the M-Pesa platform, allows for micro-loans to its users and enables the informal economy to flourish by empowering micro and small enterprises to sell their wares online.

Digital connectivity is being used to connect farmers, who are a significant base of the Tanzania economy, to vital information on weather, inputs, markets as well as access to financial resources. In doing so, the farmer is empowered to maximise harvests and income, as well as ease bottlenecks in sales caused by lack of information.

These are all aspects of tech services that have a direct impact on local economies and, consequently, the region. A strong local economy will make that country more attractive to investment, and it will also be a better trading partner for the rest of the bloc, and, as the saying goes, ‘a rising tide lifts all boats’. What is good for one country in the grouping will have positive ramifications for all.

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