ICT investment key to Africa economic development

Posted on May 23, 2013 11:22 pm

Almost all head of states and governments in Africa are converging in Addis Ababa this weekend for the 50th Anniversary celebration since the formation of African Union formerly organization of African Union (OAU). Outside the politics of Pan Africanism talk and Intra trade plans, if the African countries wants to escape the middle-income trap, they need to invest heavily in information technology and open the market for long term evolution operators that are facing delayed licensing and prohibitive regulations. Latest research indicated that every 15% of improvement in Internet penetration in African countries can potentially add up to 1% to gross domestic product and every doubling of Internet speed adds another 0.5% to a country’s GDP. Data shows there’s have few new investments being made across the continent especially with ICT sector that has seen other sectors like roads, ports and hospitals infrastructure take lion share of investment allocations.

In most countries, the latest technology in telecom industry has been as a result of the current infrastructure, which is dominated by incumbent 2G and 3G players. Most of the telecom companies invested heavily and have been fighting hard to frustrate new entrants in the markets because they are keen to protect their market share. This is holding back the continent’s of one billion people and as African Union looks forward to the next 50 years, countries must commit to providing affordable Internet access to all its citizens and businesses, that will help drive trade and promote innovation in the continent as witnessed in Kenya and South Africa. In many African countries, Internet access costs are among the highest globally and nothing has been done to make it affordable to majority poor population.

To be part of the advanced continents like Europe, African countries should push for the 4G connectivity, that is more efficient and effective, because better connectivity is the key to becoming a smart continent. Few African companies in the continent that use the Internet to innovate or promote trade and commerce with as much success. In order to move up the economic value- adding ladder, African countries governments must create the right regulatory environment and open up the market for new telecommunications and broadband players. It is a political decision for the African Union to make rather than a purely economic decision. At the heart of the issue is whether the current political leaders heading to Addis Ababa for the 50th anniversary are willing to bite the bullet and move the ICT industry to the next level just as they are planning to do with pan Africanism.

Contador Harrison