- The concept of storing, receiving, and sending money despite geographic area paved the way for decentralized currencies
- Mobile money’s remarkable success and high adaptability rate is a core secret behind Africa’s immense mobile industry
- Various governments, such as Nigeria, have taken advantage of its rapid smartphone adoption and implemented a digital National ID system
Various companies’ and organizations’ innovations and struggles have paved the way for Africa’s digitalization. Today, Africa is renowned for its technological prowess and high rate of local talent who have showcased their technical prowess.
Many individuals need to realize that one key attribute that has led to the rapid growth of Africa’s digital economy is its Mobile Industry. The innovations of the smartphone have birthed plenty of new jobs today, benefit not only itself but other industries as well.
Here is a deep dive into one of the fastest-growing industries within the continents’ ecosystem; the Mobile Industry.
Unfortunately, the fourth Industrial Revolution is the only rapid technological phase that Africa has genuinely embraced. For some time now, Africa was only known for its agricultural produce and natural resources. However, beyond that, many did not give thought to other facets of the economy. Africa’s mobile industry is no expectation since the phone coverage at its bronze age was somewhat problematic.
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In 1999 when the notion of the Internet or Web2 finally realized its true potential, only 10 percent of the African population had mobile phone coverage. This minute number only resided in select regions such as Nigeria, Egypt, Morocco and South Africa. At this time, the term digitalization was non-existent. Fortunately, as the 21st century kicked in, and the notion of Africa Rising took root.
According to the GSMA 2009 report, Africa’s mobile industry gained much traction as regions with mobile coverage had a sudden spike reaching up to 477 million people acquiring a signal. Despite the geographical demerits most organizations faced while installing such infrastructure, the sudden spike in interest continued.
By 2012 most, if not all, African regions were able to acquire mobile coverage with only a few countries unconnected; Ethiopia, Mali, Somalia, and Guinea Bissau. At this time, the world steadily evolved from landlines to using mobile networks for communication. For instance, according to Safaricom, Kenya’s mobile network has risen from 16 million to 376 million between 2000 and 2008.
These figures shattered previous estimations and caught the eye of various entrepreneurs and critical figureheads within the global digital economy. According to the Pew Research Centre, essential players of Africa’s ecosystem, South Africa, Nigeria, Kenya, Ghana and Nigeria, have steadily grown smartphone adoption.
They stated that only 15 percent of respondents have smartphones as of 2014. In addition, the coverage of mobile phones within these areas soared through the roof. At this time, various African countries have sought the establishment of a digital economy. In doing this, a cooperation network would be established between different countries, further propelling the Country’s ecosystem.
Development of mobile money
With the staggering growth of Africa’s digital economy, the creation of mobile money was one of the few crucial factors contributing to its rapid growth rate. Services such as M-PESA are known as the first global win of Africa’s digitalization.
Currently, in Kenya, more than 50 percent of the GDP of the Country goes through M-PESA. Today many claim that it is the works of M-PESA that have led to the current success of the country’s digital economy. The concept of storing, receiving and sending money despite geographic area paved the way for decentralized currencies such as stable coins and crypto coins. Likewise, in Cote’d Ivoire, at least $30 million in transactions occur daily through mobile money.
Mobile money’s remarkable success and high adaptability rate is a core secret behind Africa’s immense mobile industry. At the end of 2015, smartphone shipments exceeded the 155 million units initially set after the industry rose by 66 percent. Within the same year, Africa’s digital economy was steadily adjusting, and according to the GSMA 2015, it accounted for 6.7 percent of the continent’s GDP. This sent a ripple effect throughout the entire continent. Various governments within the continent became more open about the idea of digitalization.
Read: SME development in Tanzania – Why this is the engine of economic growth.
As the decade ended, at least 495 million people had active mobile services within Africa. This represented 46 percent of the region’s population. It is crucial to account that Africa’s mobile industry was mainly a source of infrastructure for its digital economy.
According to the Mobile Economy Report Sub Saharan Africa 2021, mobile technology and services generated $130 billion in economic value. This represented a two percent increase from 2015. The same report estimated that its monetary value will reach $155 billion by 2025 as more countries adopt the new age of digitalization
Fortunately, its main turning point was one of the world’s darkest turning points Covid-19 Pandemic. With the curtains closed in most economic activities, various individuals had to survive. Digital advertising has become the solution for everyone’s needs. The GSMA also recognized a significant increase in Africa’s mobile industry. They sighted that within the period, it experienced a 12 percent growth rate in 2022.
The establishment of e-commerce
One of the two sectors Africa’s mobile industry has significantly improved is its e-commerce and blockchain or decentralized finance industry. With the rapid growth rate of mobile technology, many individuals opted to turn to e-commerce.
This expanded their businesses beyond the restrictions of physical housing. According to Vyom Chaudhary, an editor at StockApps.com, the rapid growth rate of Africa’s digital economy has transformed the industry entirely. In 2021, at the height of the Covid-19 pandemic, Africa’s expanded mobile industry contributed significantly to the growth of $28 billion in revenue acquired by this activity. This figure alone represented a 31 percent increase to 2021. In 2022, the African e-commerce industry produced at least $33.3 billion in revenue, representing a 19 percent increase from 2021.
During this time, virtual retailer Jumia had already dominated Africa’s digital economy. In less than a decade of operation, Jumia focused most of its attention on its e-commerce sector due to the rapid rate of Africa’s digitalization.
Another vital industry that has significantly improved the high rate of Africa’s mobile industry is its digital currency. Bitcoin and other altcoins especially had an increase in value due to the high rate of transaction volume produced in Africa alone.
The increased number of smartphones generally makes it easier for individuals to trade and transact with crypto coins. Organizations such as FTX significantly improved after recording a 1200 percent increase in crypto payments from 2020 to 2021. Its ease to use and access allowed the rapid adoption o of digital currency, placing Africa on the map of the globe’s digital economy.
Vast potential
Africa’s mobile industry is significantly rising as more entrepreneurs and organizations recognize the need for a digital platform to gain more users. Various governments, such as Nigeria, have taken advantage of its rapid smartphone adoption and implemented a digital National ID system.
Read: MSMEs in East Africa urged to scale up operations.
The launching of this new system corresponded with the establishment of a CBDC, the e-Naira. For easy access and registration, the government developed several mobile applications. In doing this, the government will provide banking systems to the unbanked and those in rural areas.
Mobile application what3word is among the few Africa-themed application that adopts an online addressing system. In 2020 Vodacom, a major telecommunication company in South Africa, acknowledged wat3words for its high adoption rate.
The GSMA stated that Africa’s mobile industry could impact the lives of many. It has established various Mobile For Development activities that have reached over 45 million people across 128 projects. Their primary goal is to continue to expand Africa’s digital economy and establish new and better ways to promote Africa’s digitalization.
