ICT key to Africa’s growth
BUSINESS| Aug. 22, 2012, 2:39 p.m.
By Rutendo Hwindingwi, Divisional Manager - Sage Pastel International
Over the past decade the world has watched Africa boom, and with a combined GDP of over USD1.7 trillion, the continent is on par with heavyweights like Russia and Brazil.
Africa’s current year-on-year growth rate of 5% is more than twice its expansion in the 1980s and ’90s. So what is driving this sudden surge?
I believe the opportunities have been there all along but it’s only now, through a significant increase in the availability and uptake of information and communications technology (ICT), that the doors have opened.
Africa has always had its mineral resources but has long suffered from infrastructural gaps – including a virtually non-existent telecommunications infrastructure that severely hampered business and investment activity.
However, this lack of technology legacy has made it easier to jump to newer technologies such as Wi-Fi, broadband, and mobile phones, which are key to facilitating business and trade on the continent.
Africans have adopted these technologies incredibly fast - in 2000, 11 million people on the continent had mobile phones, and now this number is fast approaching 400 million. Internet usage has also increased dramatically, rising from three million users in 2000 to more than 100 million in 2010.
This growth is expected to continue with the advent of Seacom, a submarine fibre optic cable bringing high quality, affordable wholesale broadband capacity to the continent. Already, according to the 2010/2011 Communications Commission of Kenya (CCK) report, broadband subscriptions in Kenya increased by 354.9% last year and are now the primary driver of internet subscriptions. Africa as a whole has recently seen the largest drop in ICT prices, with the cost of fixed broadband falling by over 55% and mobile cellular prices by 25%.
ICT is vital to supporting economic sectors on the continent and according to an Ernst and Young report; stock exchanges in Johannesburg, Nairobi, Lagos and Abidjan cannot function without these technologies.
Of course soaring prices for oil, minerals, and other commodities have helped African countries establish themselves as economic hubs. In addition, macro and micro economic reforms have improved local conditions to create a favourable business climate – one of these reforms has been to open up mobile phone and internet markets to competition and private investment.
So, for businesses operating on the continent – like those all over the world – connectivity is making it easier to do business. Historically, poor infrastructure used to hamper companies getting their products or services to market, but the recent convergence of mobile devices and the internet means they can now reach consumers in remote locations. Online technologies also make banking and other business transactions easier and accessible to an entirely new consumer base that was previously cut off from formal markets.
Companies that used to face technology issues where vital data could be lost due to fixed line connectivity gaps, can now operate in the cloud – taking advantage of the extensive Wi-Fi networks and decreasing bandwidth costs. Essential business functions such as customer relationship management (CRM), business Intelligence (BI) and enterprise resource planning (ERP) can now easily and effectively be managed through mobile devices across the continent, without companies having to re-route data overseas.
Although technology is empowering economic growth, doing business in Africa is not without its challenges: companies that want to succeed will be those that are able to rapidly adapt to their environment and are open to using new technologies and mobile business applications.
The bottom line is that Africa has never been better positioned to capitalise on business opportunities by virtue of the availability of new technologies. With the increasing uptake of internet users on the continent and the easy adaptation of its users to web-based technologies, the future growth is limitless.
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