Sub-Saharan Africa mobile industry to contribute $170B to GDP

The mobile industry in Sub-Saharan Africa, a critical driver of digitalisation, is projected to boost its contribution to the region’s GDP from $140 billion in 2023 to $170 billion by 2030.

This growth – unveiled in the GSMA’s Mobile Economy Sub-Saharan Africa 2024 report – underscores the vital role mobile technology plays in advancing development across sectors such as healthcare, education, and finance. The expansion of internet access and digital services is central to this economic promise.

The report outlines that the ongoing expansion of 4G networks is expected to facilitate greater connectivity, with 4G set to represent half of all mobile connections by 2030. However, challenges persist. 

Mobile industry challenges

13% of the population remains outside network coverage, and a substantial 60% usage gap exists even within covered areas. This gap is attributed to barriers such as the high cost of devices, limited digital skills, and online safety concerns which hinder individuals from accessing online services.

In addition to connectivity barriers, the region grapples with high operational costs, inflation, and volatile energy prices. Yet, emerging technologies such as generative AI and satellite partnerships offer promising solutions to bridge these connectivity gaps.

Broader API solutions, like the GSMA Open Gateway which recently launched security APIs in South Africa, aim to bolster digital security and simplify service delivery. Addressing these mobile industry challenges is crucial for unlocking the full socio-economic potential of mobile connectivity in Sub-Saharan Africa.

Angela Wamola, Head of Sub-Saharan Africa at GSMA, said: “Our findings this year reveal both the extraordinary potential and the challenges facing Sub-Saharan Africa’s mobile ecosystem.

“To fully realise the benefits of connectivity, it is essential for operators, policymakers, and stakeholders to address affordability barriers, support infrastructure expansion, and foster collaborations that drive digital inclusion and economic impact.”

Key findings:

• Persistent usage gap: While mobile internet penetration reached 27% by the close of 2023, a vast usage gap of 60% remains. This represents millions who have access to network coverage but are hindered by the cost of devices, lack of digital skills, and worries about online security. Globally, 3.1 billion people face similar issues, making Sub-Saharan Africa the least connected region with the largest usage gap worldwide.

• Expanding 4G coverage and early 5G growth: With 4G adoption predicted to reach 50% by 2030, it is on course to surpass 3G as the predominant technology. Although still in nascent stages, 5G is expected to account for 17% of total connections by 2030, with South Africa, Nigeria, and Kenya leading the way.

• 5G economic impact and infrastructure needs: By 2030, 5G alone could contribute $10 billion to the region’s economy, equating to 6% of the mobile sector’s total economic influence. The report calls for progressive spectrum policies, particularly the release of mid-band spectrum, to support long-term growth and equitable digital access. Furthermore, 5G Fixed Wireless Access (FWA) is gaining popularity as a primary broadband solution in nations like Angola, South Africa, Nigeria, Kenya, Zambia, and Zimbabwe, meeting the high-speed connectivity demand in underserved areas.

• Strengthening digital security: South Africa has become the first country in the region to implement GSMA Open Gateway APIs. These focus on fraud prevention and security with Number Verification and SIM Swap APIs, contributing to broader regional efforts to enhance digital security, notably in digital banking.

• Generative AI potential: Generative AI is anticipated to contribute up to $1.5 trillion to Africa’s economy by 2030. Mobile operators are increasingly employing AI for customer engagement and network optimisation, as seen with companies like MTN and Vodacom. However, the region still faces a shortage of skilled AI professionals.

Critical reforms

The report advocates for several critical reforms to ensure digital inclusion and sustainable growth in the Sub-Saharan Africa mobile industry:

• Affordability reforms: To overcome the high costs hindering mobile access, the report recommends reducing sector taxes, lowering import duties on handsets, and cutting activation fees to make mobile services more affordable and accessible.

• Revitalised Universal Service Funds (USFs): The report highlights that many USFs in the region are underperforming due to inefficiencies. It calls for reforms to enhance transparency, streamline fund disbursements, and direct financial resources toward impactful initiatives, such as digital literacy programmes in underserved areas.

• Progressive spectrum policy: With a surge in data demands, the report urges governments to release additional spectrum, especially in the 6 GHz band, and to implement policies that ensure efficient, affordable, and sustainable mobile network expansion.

Business leaders and economists are increasingly upbeat about the potential of the Sub-Saharan Africa region. At the SAP Now event today in Johannesburg, several figures gave their views on the growing opportunities.

Mteto Nyati, Chairman of Eskom, commented: “South Africa is slowly but surely experiencing an economic uptick, with improvements in both political and infrastructural stability.

“This has the potential to increase foreign direct investment and boost local economic confidence, providing the private sector, and technology leaders in particular, the opportunity to focus on transformation and development within their organisations.”

Zeph Nhleko, Chief Economist at the Development Bank of Southern Africa, added: “Infrastructure deficit developments provide an opportunity for economic development in Africa. Additionally, public-private Partnerships are critical for economic growth on the continent.

“Private entities such as SAP with its network partners have huge responsibilities to facilitate connectivity solutions that will drive the Africa of the future.”

See also: GSMA: Mobile internet remains inaccessible for 3.45B people

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Tags: 4g, africa, ai, connectivity, economy, gdp, generative ai, gsma, LTE, mobile, Networks, open gateway, report, research, study, sub-saharan