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Mobile industry contribute $56 billion to Africa’s economy
From: Ghana | Adom News | Samuel Nii Narku Dowuona          Published On: August 10, 2012, 20:18 GMT
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Mobile industry contribute $56 billion to Africa’s economy

A report from the maiden GSMA Africa Mobile Observatory carried out in 2011 indicate that the mobile industry contribute a total of $56billion to Africa’s economy, representing 3.5% of Gross Domestic Product (GDP) in the continent.

The executive summary of the report, available to Adom News noted the mobile industry in Africa is booming, saying that at the end of September 2011, mobile connections in the continent cross the 620 million, representing some 62.62% penetration.

“Over the past 10 years, the number of mobile connections in Africa has grown an average of 30% per year and is forecast to reach 735 million by the end of 2012,” it said.

The report said Africa has overtaken Latin America to become the second largest mobile market in the world, after Asia.

It said the rate at which mobile connection was growing on the continent it is expected to reach 906 million by 2015, representing 84.88% penetration.

The report estimates that the industry employs some five million people on the continent.

In Ghana there are more than 21 million mobile connections, representing a penetration of almost 88%, and the sector alone constitutes 2% of GDP, 7% of investments and 10% of government income.

It provides some 6,000 direct jobs and 1.5 million indirect jobs in Ghana.

The report however pointed out that in spite of the growth on the continent, there still remained a huge untapped potential for penetration in the continent, as 36% of people living in the 25 largest African mobile markets still have no access to mobile services.

“Projections indicate that raising the whole region to 100% mobile penetration could add an additional $35 billion in aggregate GDP to the region, equivalent to a further 2% increase,” the report stated.

The report noted that even though the mobile industry remained an enabler and catalyst for development beyond its domain on the continent, fierce competition continue to drive down prices, and increased penetration.

It said price wars had been common across the continent, adding that between 2010 and 2011 operators reduced prices by an average of 18%.
The report said 96% of subscriptions were pre-paid with voice services currently dominating, however the uptake of data services is increasing rapidly.

“For example in Kenya, data revenues, including SMS, have increased at a remarkable 67% over the last four years and now represent 26% of total revenues for the industry,” it said.

The report said in spite of the downward trend in pricing, the mobile industry continued to enable and support growth in agriculture, banking, education, healthcare, and gender equality through Mobile Value-Added Services (VAS) launched throughout the continent.

It observed the emergence of mobile money transfers and mobile banking puts Africa firmly at the forefront of the global Mobile Money industry, saying that beyond mobile services, the mobile industry is also contributing to rural electrical distribution with lower carbon emissions and facilitating the work of NGOs across the continent.


The report observed African governments were slowly shifting to more transparent ICT regulation, but limited spectrum availability remained a key barrier to sustaining long term growth.

It therefore proposed that for the mobile industry to continue to serve as a catalyst for growth, sufficient spectrum was needed for the provision of mobile broadband services.

“African countries have currently allocated considerably less spectrum to mobile services than developing countries in Europe, the Americas and Asia.

“Allocating the Digital Dividend spectrum to mobile services will enable the mobile industry to accelerate its efforts to bring connectivity and information to large swathes of rural Africa,” it said.

The report said GSMA supported a technology neutral approach to the use of all existing mobile bands, and called on Africa’s governments to allow deployment of mobile technologies that could technically co-exist according to what are relevant to internationally harmonised bands for Africa.

“The GSMA encourages governments in the region to establish clear guidelines for spectrum planning, licensing, pricing and re-farming. African governments must clarify future spectrum availability of both the coverage bands (700, 800, and 900 MHz bands) and the capacity bands (1800, 2100, 2300, 2600, and 3500 MHz bands),” it said.


The report said regulation should continue to improve to ensure the effective long term development of the mobile sector. 64% of African countries remain in the bottom quartile of the World Economic Forum’s political/regulatory index. GSMA research indicates that total tax intake of governments could be boosted, by reducing mobile specific taxes across Africa.

Universal access has also been promoted by most African governments using taxation schemes, but there is limited transparency around the distribution of funds.

“By working in partnership, mobile operators and African governments can continue the remarkable growth story of the African mobile industry. The benefits that mobile services have already brought to hundreds of millions of Africans can be extended to those who have yet to connect - by so doing, the African continent can continue to bring not only communication services, but also improved financial services, healthcare and education to its people and drive an increase in the economic wealth and development,” the report said.

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