The Course of Connectivity

Anywhere and everywhere you look in Nigeria or Kenya, you will find people on their mobile phones and other gadgets. Rich and poor, old and young.  The use of mobile phones has caused a revolution in Africa – and more is to come.

One of my colleagues sent me a presentation by Frost & Sullivan titled “Mega Trends in Africa: Macro-to-Micro Implications for Business, People, and Society.” It covers a wide range of issues: from the future of banking to health and wellness. Here I want to focus on connectivity. These are some of Frost & Sullivan’s estimates of what the African landscape will look like by 2025:

• Each African consumer will have 3 connected devices on average (of course, this is the old story of “eating on average one chicken”: some eat two chickens while others starve). This growth of connected devices is driven by urbanization, rising incomes, and the up-and-coming generation of tech-savvy Africans.
• Total spending in information and communication technologies (ICT) will amount to US$325: if we take it as a proxy for the size of the internet economy, this will account for 7% of Africa’s GDP.
• Online retail will account for nearly 7% of total retail sales in Africa.
• 520 million Africans will transact money through their mobile wallet, and this would lead to a market value of $438 billion.

These developments require improvements in internet speed. There’s enormous variance in internet speeds across countries in terms of bits per second per internet user. Data from 2013* show Kenya to have the highest internet speed in sub-Saharan Africa (49,860) and Central African Republic the slowest (136). To compare, the same metric in the UK was 352,583, in Spain 102,422, and in the US 64,089.

Even if improvements are needed, internet-based business opportunities lie ahead on the continent. Any ideas?

 

* This information is from the DHL Global Connectedness Index 2014 prepared by Ghemawat and Altman.