High penetration of social media to help drive economic growth in Africa

By Nana Appiah Acquaye, Accra, Ghana

The Head of Quantum Global Research, Prof Mthuli Ncube, has revealed that the use of technological tools including social media platforms has the potential to transform economies on the African continent.

According to him the high penetration of Facebook on the continent will help boost financial inclusion, increased virtual communications and also create investment opportunities

“Technology drives financial inclusion, the mobile banking; people can talk to each other. It’s also a source of investment, a source of innovation, it creates jobs and it’s just incredible. Look about how just telephony has transformed the Africa continent within the last 20 years and so it is quite clear that that would drive growth in innovation,”

Speaking exclusively to Biztechafrica in Accra during the official launch of the Africa Investment Index (AII), Prof Ncube expressed confidence in Africa’s potential of leapfrogging to the height of technology evolution especially on the back of social media platforms.

He noted that the higher penetration of social media platforms is encouraging since these platforms provide the avenues to measure key indicators of economic growth in a country.

“Think about what this is measuring. This Facebook penetration is measuring investment in ICT, it’s measuring the degree of connectivity, but it is also measuring the ability to structure developed relationships because people are connecting and it is not just ICT penetration, it’s actually social relationship. It captures a more than social capital including hidden income. So moving up the ranking on Facebook penetration rate would auger well for Ghana

The Africa Investment Index (AII) in it recent report placed Ghana as eighteenth most attractive economy for investments flowing into the African continent with the country attracting a net foreign direct investment of US$3.5 billion. It revealed that Ghana’s economy has experienced strong and robust growth over the past decade, making its success a case worth emulating by its regional peers. Industry was the main driver of overall growth with an annual average growth of about 13 percent, followed by services with 8.4 percent and agriculture with about 8 percent. The strong growth record has fostered the country’s graduation to lower-middle-income status in 2010.

According to the AII report, the top five African investment destinations attracted an overall FDI of $13.6bn. Botswana was ranked the most attractive economy for investments flowing into the African continent followed by Morocco, Egypt, South Africa and Zambia.

The Africa Investment Index is aimed at providing investors in Africa a guide to which countries and markets are most attractive for investment in the short to medium term. The Index is a multidimensional barometer based on six clusters of factors, namely Growth factor, Liquidity factor, Risk factor, Business environment factors, Demographics and Social Capital factors.

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