East Africa is on the brink of a digital revolution, with the potential to change the population’s way of life from the ground up. The advent of widespread mobility is encouraging wholesale moves away from agriculture to more economically lucrative industries, and this is already having a phenomenal impact.
Until recently, East Africa was one of the least connected places on Earth. Mobile and internet services tended to be slow, expensive or unavailable. The idea that countries such as Kenya and Rwanda would become technological success stories would have seemed far-fetched.
Today, there is growing optimism about the potential impact of communications technology – for both economic growth and wider development.
In 2010 three sub-sea fibre-optic cables were constructed, meaning that East Africa is no longer the only major region in the world without super-fast broadband. Rwanda has completed its own 3,200km fibre-optic network, linking up 230 government institutions throughout the country.
Kenya is showing the way in so-called m-commerce, and other nations, including Tanzania and Uganda, are not far behind.
While communications cannot substitute for poor transport infrastructure and a lack of healthcare and financial services, improved connectivity is seen by many as a way to catalyse economic development and to integrate far-flung communities. Mobile phones, for example, give farmers the opportunity to keep abreast of pricing movements, allowing them to cost crops or livestock more competitively. Broadband is already allowing cities such as Nairobi to become hubs for IT and call-centre services, potentially replicating some of India’s recent success.
A 2009 World Bank study found that a ten per cent increase in mobile phone adoption in a developing nation could boost GDP per person by 0.8 per cent. A similar increase in broadband penetration could improve GDP by 1.3 per cent. Numerous studies point to a strong link between ICT availability and national incomes.
Christine Zhen-Wei Qiang, author of the World Bank report on the role of ICT for development, says mobile technology could have a transformative effect on many lives in the developing world. “The mobile platform is emerging as the single most powerful way to extend economic opportunities and key services to millions of people,” she says.
Advocates of technology-focused economic development point out that mobile and broadband coverage can have a particularly dramatic impact in rural areas – where 75 per cent of the global poor are located. “The mobility, ease of use, flexible deployment and relatively low and declining roll-out costs of wireless technologies enable them to reach rural populations with low levels of income and literacy,” says Qiang.
Most of East Africa’s 120 million population live in rural areas, often without access to fixed-line telephony or basic public services. For example, 70 per cent of the population of Tanzania (roughly 42 million) live outside urban areas. In the past few years, governments have decided to “leapfrog” fixed-line infrastructure, instead encouraging investment in more scalable and flexible mobile networks. Today, mobile phones have become the default channel for peer-to-peer and interactive communication across much of the developing world. In many places, traditional fixed-line infrastructure is in fact falling, to be replaced by both mobile and fibre-optic broadband.
Michael Joseph, CEO of Vodafone affiliate Safaricom, Kenya’s leading mobile network operator, says cell phones are having a greater impact than foreign aid. “In Kenya, 70 per cent of our economy is in the informal sector. This means that a lot of the people are just doing small jobs, or are small-scale farmers. They’re just doing work on the side of the road – they’re traders. And they’re all doing it because the mobile phone has allowed them to do it. I’ve said many times I think half the GDP growth in Kenya comes because of the mobile phone revolution, not because of anything else,” he told allAfrica.com in 2009.
Vodafone has launched new low-cost handsets intended to help mobile penetration in emerging markets including Kenya. The mobile giant’s group director of terminals, Patrick Chomet, says that the cost of mobile handsets has been one of the most significant barriers for people in benefiting from mobile services: “The lives of people who use these phones will be changed and improved as they become part of the mobile society,” he says.
Growth in mobile phones has been startling. There are now more than 20 million subscribers in Kenya – roughly half the population. Across East Africa more than 50 million people have subscriptions, while many more have access to one (“village phones” are common in rural areas). Take-up of mobiles has jumped by 550 per cent in five years, according to the United Nations Conference on Trade and Development, making East Africa the fastest-growing market anywhere in the world.
Forming farming links
Experts point to several problems faced by East African farmers in remote areas. Poor infrastructure compounds their isolation by making it hard to access services and markets. They are often left in the dark about cultivation techniques, crop varieties and ways to combat disease. And they often lack the means to collaborate – for example, in co-operatives that could help them drive for higher prices.
A 2010 report by the Swedish International Development Agency identified several ways in which mobile phones could help farmers in the region. These include providing information on “seeds, fertilisers, pesticides and outputs”, by making “markets more efficient and transparent through better dissemination of price information” and empowering “smallholders in negotiation with wholesalers, traders and transport providers”. Technology can also improve access to financial services, which are often lacking in isolated areas, and improve the ability of disaggregated citizens to demand better government services.
Kanayo Nwanze, president of the International Fund for Agricultural Development, told The Guardian that the most important impact of mobile phones was to improve “access to market information”, allowing participants to make better informed judgments about, for example, when to sell their goods. “The role of telecommunications in the transformation of the agricultural sector to an agribusiness sector should not be underestimated,” he said.
One example of a project using mobile phones to improve information access is Mobilinfo – a platform developed by social entrepreneurs Ueli Scheuermeier and Clive Lightfoot. Their organisation, Rural African Ventures Investments (Ravi), has recruited hundreds of traders from across Tanzania (where Ravi is based), Uganda and Kenya to share pricing information on a range of everyday commodities and products. Combined with small loans and training, Ravi hopes to create a stable business environment that will help to encourage private investment.
Through its AppLab project, the Grameen Foundation has created several mobile initiatives for Ugandan farmers. These include Google Trader (developed with the Bill and Melissa Gates Foundation), which enables buyers and sellers to find each other, and Farmer’s Friend, a database of agricultural advice.
Meanwhile, the exponential growth in mobile phone usage is spurring a growing army of developers and entrepreneurs looking to create the next killer app. Nokia and Ericsson have both set up R&D centres, while the newly formed iHub in Nairobi acts as an “open space for technologists, investors, companies and hackers”. Several universities, including Strathmore, in Nairobi (which houses the Safaricom Academy) and the University of Dar es Salaam in Tanzania, act as centres for students wanting to get ahead in the mobile industry.
Falling costs have also helped spur activity in East Africa. Greater competition has cut prices for mobile coverage, while improved broadband links have cut costs for fixed-line and wireless internet services. Since the introduction of the SEACOM sub-sea cable in 2009, the cost of downloading 1Mb of data in Tanzania has fallen from about 90 shillings (or just over a dollar) to 30 shillings.
With faster and cheaper links established to the outside world, East African nations hope to turn themselves into modern centres for international trade. Kenya has long been cited as the “next big thing” in outsourcing owing to its high level of English-speaking skills, low labour costs and accessible location. Nairobi has several flourishing outsourcing companies serving clients in the Middle East and South Asia. The industry has, until recently, been hampered by the high costs of bandwidth and poor-quality phone connections. But, since the introduction of under-sea cable, prices and service levels have improved dramatically. Local outsourcing companies now say they can compete on an even footing with rivals in Bangalore, Hyderabad and elsewhere for clients in the UK and US.
Rwanda hopes to become the “Singapore of Africa” – using its new fibre-optic network to overcome the problem of being a landlocked country. Before the sub-sea cables were installed, it had to rely on expensive satellite internet access. Now the government plans to offer super-fast broadband to multiple public and private institutions, set up city-wide wireless access in Kigali and give every child a laptop computer.
President Paul Kagame has said he is determined that Rwanda “take full advantage of the digital revolution”, having “missed both the agricultural and industrial revolutions”. Under his government’s “Vision 2020” strategy, the hope is that the proportion of Rwandans working the land will fall from roughly 90 per cent now to 15 per cent by the end of the decade.
Whether East Africa’s dreams for IT-based prosperity come true is still anyone’s guess. A lot will depend on government backing, continued support for inward investment and the facilitating role of international institutions and NGOs in speaking up for the opportunities that mobile and broadband technology can offer.
Vodafone affiliate Safaricom is the leading provider of converged communication solutions in Kenya. It is working to support the welfare of Kenyans through value-added services and financial aid for community projects.
Vodafone Group is also working towards projects that will train entrepreneurs in Africa to use the web as a platform for delivering locally relevant content, applications and services. Some of the funding will also go to researching ways to make the web more accessible and valuable to people in developing economies.