How to bridge the widening digital divide in Africa

Posted on October 26, 2014 01:00 pm

Discussing the future of the Internet and e-­commerce in sub saharan Africa, government officials, academics, senior executives, entrepreneurs and venture capitalists always join hands in conference together to discuss how their businesses and entrepreneurs can use the Internet to make their businesses more efficient and competitive, and creating new start-ups and jobs in a 21st century economies in the most poverty stricken continent but as many would agree with me, nothing much happens afterwards let alone full implementation apart from a few pockets of decent progress in countries like South Africa, Nigeria, Egypt, Kenya and Uganda.The Internet, as a tool of business and commerce, remains undeveloped in sub saharan Africa. Attendees to such conferences have always discussed how best to change that. Some of the fancy solutions put forward focuses on critical areas like improving existing technology infrastructure and creating sound regulation that allows data to flow freely while protecting privacy. Take it or leave it, the Internet in Africa remains largely a social phenomenon and is a preserve of the few. Africa is the 2nd-largest mobile phone market in the world after Asia, with an estimated 700 million phones in use.However, when it comes to using the Internet to provide value-added support for business and e-commerce, the continent of more than 1 Billion people lags far behind all other continents.

According to an American research firm, online retail sales in Africa are expected to reach only 1 percent of total retail sales in the continent by end of this year compared to 5 percent for other developing regions like Latin America and Middle East.Internet is expected by 2015 to account for 0.5 percent of GDP among peer developing African economies while broadband Internet penetration in Africa is growing, it is starting from a low base. Internet penetration is less than 20 percent and is largely concentrated in major cities and urban areas and Fixed broadband penetration is far less at around 2 percent on average though in some individual countries its higher than that. Your blogger has come across various studies and one major constraint is the lack of infrastructure to carry data. The good news here is that some African governments and private sector investors are now developing a fiber optic broadband backbone in rural areas and once fully completed, it will provide Africans with vastly improved access to broadband Internet. Another issue hindering e-commerce and Mobile-commerce is that African banks and retailers do not yet offer consumers easy access to online payment systems. According to an experts working on a project for a multi national company, though most are optimistic that this issue will be speedily resolved, and consumers will quickly adapt to e-­commerce and m-commerce, as broadband becomes more accessible but the regulatory picture remains less clear.

A good example is how several countries which I cannot name for legals reasons are drafting regulation that would require that all entities providing “public service” maintain local data centres and recovery centres and as your blogger doesn’t simply understand what do regulators mean by “public service” in those drafts.However, me think that a broad definition would go beyond government entities and require any business that provides a service to the public to maintain a data centre because it would eliminate the cost efficiency provided by Cloud technology, inflate the cost of goods and services, and disadvantage African businesses from competing internationally. Further, it would discourage interested investors who are reliant on data-driven information and services from investing in those countries proposing such regulations.Just to advise technocrats who are drafting those regulations, some who have consulted me for advise, the impact would be worse on small businesses, which could not afford maintaining a separate data centre in a region with one the highest costs of bandwidth. Data and customer information stored locally would also be far less secure than in the Cloud where significant investments and new technologies have created robust security firewalls.However, am encouraged that technocrats in these countries are carefully reviewing the pending draft regulation concerning data centres and is actively soliciting the opinions of companies who will be affected by these regulations.African governments have a central role in ensuring that consumer and company data on the Internet is secure and to ensure that happens, regulations being suggested today need to be practical and valid for future generation technologies and failure would detrimental of the African consumer and economy.

Contador Harrison