Accra, Ghana, August 26, 2020//-Mobile network operators (MNOs) are driving Ghana’s Information and Communication Technology (ICT) sector growth than expected.
Masahudu Ankiilu Kunateh takes a critical look at the development
At the same time, its transformative effect on the economy is in full swing. The expansion of mobile services is also providing companies with new avenues to develop and market their products and services internally and externally.
New opportunities for startups
Indeed, the MNOs have created new opportunities for startups, introducing a range of new innovative products and services to the market as well as opening job avenues for the youth.
It is important to note that a new generation of companies has surfaced to harness the potential of digital technologies. These include big data analytics and artificial intelligence (AI) in Ghana as the country is becoming a more and more dynamic startup market.
The scope of the startups revolution is limitless. In the agriculture sector, the mobile money platforms are supporting agritech startups to provide a range of services such as weather, price information and applications of fertilizer to farmers across the length and breadth of the country.
For instance, Farmerline which is a social software company with the mission to transform millions of farmers into successful entrepreneurs connects farmers to markets, finance, weather forecast, new farming tips, inputs dealers and equipment services.
It has an information service that sends SMS and voice messages on weather forecasts, market prices, new farming techniques, agrochemical applications, and finance directly to the mobile phones of farmers in local languages.
Through their mobile phones, farmers can also connect to global markets and buy farm inputs and services. Farmers using Farmerline see more than 50 percent increase in their income.
The company was founded in Ghana and now operates in Cameroon, Malawi, Nigeria and Sierra Leone, reaching 200,000 farmers, while Mexico and Peru have shown an interest in the technology.
This and other several interventions have contributed immensely to the growth of the country’s agriculture sector.
One of the reasons for setting up the AI Research and Development Centre in Accra last year by the U.S tech giant Google is to harness the potential of the sector.
The centre comprises a team of 10 research scientists and software engineers, who collaborate with Ghanaian universities and policymakers to find AI solutions to economic challenges.
Another sector in which tech startups are having an impact is healthcare.
For instance, mPharma, a Ghanaian-based startup established in 2013 streamlines last-mile delivery of prescription drugs, and makes them affordable, in under-served markets in the country.
The company recently raised $9.7 million in Series B funding which is higher than what it intended to raise.
Currently mPharma has operations in Ghana, Nigeria, Zambia and Zimbabwe where it partnered with major pharmaceutical manufacturers, insurance companies, financial institutions and governments to deliver on its value proposition.
The startup employs a particularly interesting model-QualityRx to enable its last-mile delivery network.
Through a cooperative scheme, the startup offers mom-and-pop pharmacies loans, business support and access to its inventory.
In return, mPharma takes participating pharmacies under its brand, using its growing purchasing power to lower the cost of drugs. So far, it has enlisted over 208 pharmacies and counting.
In 2018, mPharma has over 40 people on its payroll, serving more than 20,000 patients each month, mostly via pharmacies and private hospitals.
Furthermore, in March last year, the Oracle Global Startup Ecosystem and the Government of Ghana launched the Ghana-Oracle Digital Enterprise Programme, a new collaborative effort to support technology-enabled startups and entrepreneurs across Ghana.
Additionally, the Oracle Global Startup Ecosystem, Oracle’s programme for entrepreneurs and innovators worldwide, has committed to support 500 local startups through access to Oracle Cloud technology, mentoring and workshops, and business-enablement and support resources.
Backed by the vast global technology and business resources of Oracle, the programme includes: support and enable 500 local startups and entrepreneurs; engage with local innovation hubs to execute; open to business-to-business (B2B) and business-to-consumer (B2C) startups of all sizes and all stages of growth, among others.
The Oracle Global Startup Ecosystem is a unique acceleration program for startups that puts the vast technology and business resources of Oracle behind emerging businesses to help them scale and succeed.
While in October 2018, the Ministry of Communications launched the Ghana Innovation Hub in collaboration with local stakeholders.
This project which received $1.4 million in funding from the World Bank offers an incubation programme for tech startups in the country.
Also tech startups benefit from a number of incentives introduced in 2018 to reduce youth unemployment.
The reforms extended a five-year income tax exemption for all entrepreneurs under the age of 35 operating in ICT and other high-value industries.
Eligible startups receive reduced taxes, ranging from 5% to 15% based on the location of the business.
Present and successive governments acknowledge that ICT is an innermost driver of economic growth and development and have sought to harness its potential both through the digitisation of public services, and the provision of ICT infrastructure and incubator programmes to support startups.
With many consumers using mobile data cautiously and growing smartphone penetration among Ghanaians, the market is far from saturated.
Growth Fintechs
The country’s fintech industry began in 1997 following the introduction of the Sika Card, a new financial product by the then Social Security Bank (SSB) Ghana now Societe Generale Ghana Limited which allows cashless transactions in the country.
Fast forward in 2001, IT Consortium launched its platform for Business-to Business Solution, while the Government of Ghana introduced the e-zwich, an interoperable payment system in 2008.
The advent of Mobile Financial Services by MTN Ghana in 2009 with nine banking partners has democratized mobile money transactions in the country.
The democratization of mobile money transactions in the Ghanaian economy has instigated a paradigm shift to a new kind of retail banking system where large segments of the unbanked populace are being absorbed into the financial services sector.
With the aim of driving and accelerating the rate of innovation in the space, there are 71 registered fintech businesses operating in Ghana today, General Manager of MTN MobileMoney Limited, Eli Hini said at MTN Mobile Money Stakeholder Forum as part of activities to mark this year’s MTN Mobile Money Month.
Easy access to internet data
Thanks to mobile money operators namely MobileMoney Limited, a subsidiary of MTN Ghana, Vodafone Cash and AirtelTigo Money, the majority of mobile phone users are able to purchase internet data from their wallets with ease.
Additionally, the falling costs of internet devices and market competition, access to the internet has risen steadily in Ghana.
According to DataReportal which is designed to help people and organisations all over the world to find the data, insights, and trends to make more informed decisions, there were 14.76 million internet users in Ghana in January 2020.
The number of internet users in Ghana increased by 1.0 million (+7.5%) between 2019 and 2020. Internet penetration in Ghana stood at 48% in January 2020.
Key mobile players
As with telephony, the internet market is dominated by mobile phone usage, with 929.96 million subscriptions using mobiles to access the internet at the end of the fourth quarter of 2019.
This figure represents 98.75% of the market share when compared to 27.42 million recorded in the third quarter last year.
This is high by regional standards; while comparable figures for all data subscriptions are unavailable, the penetration rate of 2G and 3G subscriptions in Ghana was 88.8% in December 2018, second only to South Africa (105%) in sub-Saharan Africa, according to the NCA and GSMA Intelligence.
This shows that the country’s mobile data market is well established.
MTN Ghana is the largest operator in the mobile market, according to data from the National Communications Authority (NCA), while Vodafone Ghana is the second-largest mobile operator.
Occupying the third position is AirtelTigo. The smallest operator in Ghana is Glo Mobile, a subsidiary of Nigeria’s Globacom.
Also, there are five Broadband Wireless Access operators in Ghana namely; BLU Telecommunications, Broadband Home (BBH), Busy Internet, Surfline and Telesol.
LTE development
The NCA in its effort to diversify the country’s burgeoning 4G market and improve access to high-speed mobile internet, held a second spectrum auction for the 800-MHz band in September 2018, inviting tenders for three blocks of 2×5-MHz frequency.
The auction attracted Vodafone Ghana and Quantum, an energy company. It was announced in December 2018 that Vodafone Ghana had been awarded the licence in a $30milllion deal.
Following extensive LTE infrastructure upgrades, the company launched its 4G offering in March 2019.
In April 2019, MTN Ghana announced that it had allocated $160 million to improve its network and foster greater reliability and coverage, with the aim of deploying 900 4G-LTE sites, 277 3G sites and 450 2G sites.
The company in May that same year upgraded its 4G to 4G+ service to enable its numerous customers to enjoy unlimited internet coverage and speed in the country.
In late February 2019, the Ghanaian government announced a partnership with Nokia, an international telecoms company to lay the groundwork for the introduction of a 5G network.
Work is underway to prepare for the longer-term introduction of 5G, which experts say will offer significantly increased capacity and mobile internet speed in the West African country.
Bottom line
The growth of mobile money channels, internet networks and smartphone ownership has augmented the adoption of digital services and the application of digital technology to business practices in the country.
By Masahudu Ankiilu Kunateh, African Eye Report
