As published in the July issue of SubTel Forum Magazine
Written by David Oren
29 July 2022
Africans are preparing to take over the world. This may not be a sentiment the developed world tends to agree with, but it is time to acknowledge the facts. About 17% of the world’s population resides in Africa and according to an article he published World Economic ForumAfrica’s urban population is expected to nearly triple by 2050.
Add to that the fact that Africa has the world’s smallest and fastest urbanizing population and you’ve got a recipe for growth. But what prevents them from taking their rightful place in the global economy?
The answer to this question is obviously complex and full of history and nuance, but I would argue that there is one structural obstacle that remains in the path of Africa’s economic transformation. There is not enough internet connection.
The World Bank assumes that the digital economy makes up 15.5% of global GDP, and has been growing at a rate two and a half times faster than global GDP over the past 15 years. Research reveals that a small 10% increase in mobile broadband penetration in Africa would result in a 2.5% increase in GDP per capita.
According to the United Nations’ International Telecommunication Union, Africa is home to about 700 million people out of the 3.7 billion people who are offline in the world. Since we test ourselves every day (think what happens if your internet access isn’t working this morning?), if one can’t connect to the digital economy, they can’t access the opportunity for growth.
As we enter the post-pandemic era, where physical presence is no longer synonymous with effort and value added, developing countries (and continents) will need the right tools and environments to enable economic momentum. On this front, much progress has been made.
At Liquid Intelligent Technologies, a Cassava Technologies company, we’ve seen a huge increase in bandwidth demand in Africa of at least 50% year over year – doubling every 18 months, faster than anywhere else. The cost of connection is rapidly declining (almost everywhere) and access to the basic Internet is increasing.
Analysts continue to highlight the rapid growth in network traffic among African countries. However, there is also a wealth of submarine cable capacity coming to the continent over the next few years (eg Equiano, 2Africa, Peace Cables, etc.). This will bring the total available capacity to more than hundreds of terabits across the oceans around Africa. It follows that this capacity must be spread across the continent, linking data centers together and providing service to every building and home. This creates a symbiotic relationship between submarine cables, a secure, reliable and capable fiber network and even satellite dishes.
These are attractive metrics for investors, although the success really depends on how Africans are empowered by providing services to ensure they can create competitive offerings in the marketplace such as mobile money and insurance. At the end of the trading day, the basic internet is only the beginning of the story.
Getting cables to remote areas is a challenge, and once you get a connection to an area, network access tends to come at a fixed cost.
In the connection game, higher capacity requirements create a constant downward pressure on unit cost. This is the hallmark of success in the communication market. But this is not always easy to achieve. The fewer people using the internet in an area, the more they need to pay to use it. These are unfortunate economics on the surface but dig deeper and you’ll find that value often outweighs the cost when it comes to connectivity – even in developing countries.
Although you will find that it is not the ability to connect with the world that really changes the local economic engine, but the ability to connect with people, businesses, villages, cities and other areas of the country – trade, communicate and seize opportunities to develop themselves, their businesses and their national economy.
As we continue to close the connectivity gap in Africa, and eventually reach levels seen only in advanced economies, we will undoubtedly see a massive boom in GDP and productivity. Alongside this will come improvements in health conditions and educational opportunities. Over time, and with the right attitude, it is communication that provides the spark to reduce poverty and promote economic and social success.
We’ve seen it in African economic powers such as South Africa, Kenya and Nigeria, but more corners of the continent are about to light up when you join the chorus of communication. The value of the internet will continue to spread across the continent as we turn tens of millions into hundreds of millions of connected Africans.
We know that technology favors young people, and with such a young population there is nothing this continent can tell us because they are finding African solutions to African (and likely global) problems. Come see and call.
About the author
David Yuren, CEO of Liquid Dataport, is responsible for developing the international connectivity business and submarine cable investments in Liquid Intelligent Technologies. Under his strategic guidance, the organization has completed three digital corridors connecting East and West Africa and forged partnerships to expand Liquid’s reach across Africa. It is also instrumental in Liquid’s growing investment in links between Africa and other international markets such as Asia, Europe and the Americas.
He joined Liquid in 2013 and, as Chief Strategy Officer, was responsible for the organization’s expansion strategy – combining organic growth with strategic acquisitions, raising funds from debt and equity, and partnerships across the continent. He helped triple the company’s revenue and backed Liquid’s debt financing and several additional equity rounds with global investors.