Mobile Ecosystem In West Africa To Hit $50bn By 2022
Considering the strong growth in mobile subscription and mobile broadband across West African countries, Nigeria inclusive, a new GSMA study, which was released at the recently concluded Mobile 360 African Forum in Abidjan, Côte d’Ivoire, has predicted that the mobile industry in West Africa will contribute more than $50 billion annually to the region’s economy by 2022.
The new report, The Mobile Economy: West Africa 2018, 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, which is about 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.
Analysing the study, the Chief Regulatory Officer at the GSMA, John Giusti, said: “The 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. 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.”
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. 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, Giusti said.
According to him, 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. 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 on capital expenditure (CAPEX) over the next two years building out and upgrading their networks, the report further said.
The report said the expected increase in the mobile ecosystem’s contribution to the West Africa economy over the next five years would be due primarily to productivity gains. The greater availability of mobile broadband networks, for example, would enable improved access to information and services, which in turn drives efficiencies in business processes across many industries, including finance and health.
“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,” Giusti added.
