Report: Mobile Industry to Add $50bln to West Africa Economy in 5 Years

April 15, 2018//-The mobile industry in West Africa is forecast to contribute more than $50 billion annually to the region’s economy by 2022, according to a new study published today.

A new report – The Mobile Economy: West Africa 2018, released today by GSMA at the Mobile 360 – West Africa event being held in Abidjan, calculates that the region’s mobile ecosystem contributed $37 billion in value last year, equivalent to 6.5 per cent of GDP, and will grow to $51 billion (7.7 per cent of GDP) within five years.

The economic contribution over this period will be spurred by strong subscriber growth and the move to mobile broadband networks and services, the company says in a statement.

“Today’s report demonstrates the vital role West Africa’s mobile ecosystem is playing in driving economic growth and empowering citizens across the region, as well as in delivering against many of the targets of the UN’s Sustainable Development Goals,” said John Giusti, Chief Regulatory Officer at the GSMA.

“However, further work is required as more than half of West Africa’s citizens are not yet connected to a mobile service, excluding them from the socio-economic benefits that mobile delivers.”
According to the report, authored by GSMA Intelligence, at the end of 2017, there were 176 million unique mobile subscribers across the West Africa sub-region, which comprises the 15 members of the Economic Community of West African States (ECOWAS). This is equivalent to a penetration rate of 47 per cent of the region’s population, up from just 28 per cent at the start of the decade.

The ECOWAS region comprises of Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.Strong subscriber growth is forecast to continue over the coming years; 72 million additional mobile subscribers are expected to be added in West Africa by 2025, lifting subscriber penetration to 54 per cent.

Much of this growth is attributable to the demographic situation across the region, as large youth populations are expected to take out mobile subscriptions as they reach adulthood.

According to the report, more than 40 per cent of the population in many countries across Sub-Saharan Africa are below the age of 16.

Meanwhile, the transition to mobile broadband in West Africa is being driven by the expansion of 3G and 4G networks, lower data tariffs and the increasing affordability of smartphones. 3G networks now cover two-thirds of the regional population and 4G adoption is also rising rapidly.

As of March 2018, there were 29 live 4G (LTE) networks in nine countries across West Africa, six of which have launched in the last year, said the GSMA statement adding that 3G and 4G together accounted for 36 per cent of West African mobile connections in 2017 and are forecast to rise to 94 per cent of the total by 2025.

Local operators are expected to spend $8 billion (capex) over the next two years building out and upgrading their networks.

Mobile Powering Economic Growth and Jobs
The expected increase in the mobile ecosystem’s contribution to the West Africa economy over the next five years will be due primarily to productivity gains.

The greater availability of mobile broadband networks, for example, will enable improved access to information and services, which in turn drives efficiencies in business processes across many industries, including finance and health.

Alongside the economic contribution, the mobile ecosystem also supports jobs and contributes to public funding. Last year, the mobile industry in West Africa provided employment to more than 200,000 people, predominantly in the retailing and distribution of services and handsets, and made an annual tax contribution to the public finances of governments of $4 billion.

“Connecting a new generation of mobile subscribers across West Africa requires a new era of collaboration between industry and governments in order to implement policies that encourage network expansion, innovation and affordability,” added Giusti.

“In addition to the work of operators to expand and improve networks, significant effort from governments at all levels is needed to create the right conditions for continued investment.”

The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 300 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors.

GSMA data

The report The Mobile Economy: West Africa 2018 is authored by GSMA Intelligence, the research arm of the GSMA, and is available in English and French language versions.

africanbusinessmagazine.com

 

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