Investment and trade – as opposed to charity and aid – must drive the transformation of African economies

Modernisation and mobility are two of the most important aspects of today’s global business world. Africa’s embracing of the information and communication technology (ICT) sector has picked up momentum, with its mobile market becoming the fastest growing of any region over the past eight years.

The 2007 Connect Africa Summit was an influential event in terms of underlining the world’s recognition of Africa as a potential ICT hub. It closed with investment commitments amounting to over $55 billion, with the ICT industry taking centre stage.

Delegates made the decision to bring forward connectivity goals to 2012 to enable the achievement of the broader Millennium Development Goals by 2015. At the time, commitments were made to interconnect all African capitals and major cities with ICT broadband infrastructure, as well as strengthen connectivity to the rest of the world by 2012.

A recent visit to South Africa from the Foreign Minister of China Yang Jiechi underlined the Asian powerhouse’s interest in improving African infrastructure and forging alliances for the development of the continent’s information technology (IT) industry.

While critics have suggested that sentiment toward IT investment is merely speculative, or at the very least premature, recent data has indicated that investment will increase in sub-Saharan Africa by 9.9% in 2011.

According to research conducted by the International Data Corporation, investment in the African IT sector will increase by $23bn this year. Vice president of the firm, Jyoti Lalchandani, commented that there are “many large investments” expected over the coming years, with South Africa’s ICT infrastructure set for a boost as cities continue to gain access to fibre-optic broadband. While trends in sub-Saharan Africa are clearly moving in the right direction, there are reports that limited access to equity financing by small and medium enterprises (SMEs) within the sector in East Africa is hindering growth.

A new ICT investment scheme has been planned for Tanzania over the next five years. According to media reports, Helios Towers, a telecoms tower builder and operator, will provide funding worth $100m, aimed at expanding its network of towers in the country; it has already held talks with operators Vodacom Tanzania and Zantel.

The investment follows the $130m that the company has already spent on the purchase of 1 180 telecoms towers in Tanzania in December 2010.

This momentum has spread to Nigeria, Africa’s most populated country, where the government announced a plan to more than double its number of online users to 70 million by 2015 in a bid to maintain its top slot on the continent. According to its Minister of Communication and Technology Omobola Johnson, the government plans to improve access to ICT among marginalised people, including phased subsidisation of bandwidth provisions to improve network services to rural areas.

The Zambian government has openly stated that the ICT sector has struggled to make any meaningful contribution to Zambian economic development until now.

“We have always wanted a situation where all people would be able to access broadband services on their phones and laptops to enjoy multimedia services,” said Amos Kalunga, a telecoms analyst at the Computer Society of Zambia.

Namibia, another African nation gaining increasing recognition on the global stage due to booming commodity prices, has embraced the view that ICT – within not only the country but the continent – needs to be improved and streamlined for true social and economic progress to be made.

Investment in the telecoms sector, as well as innovation, are some of the key enablers for the transformation of Namibia’s economy to a stronger and more productive one, according to Tony Munro, solutions executive at Dimension Data: Middle East & Emerging Africa.

At the Telecom Namibia ICT Summit 2011, he outlined that in order to elevate the use and enhance IT technology capacity, key role-players such as the government, communications service providers, non-governmental organisations, funding agencies and private enterprises will need to work in unison to influence and accelerate sector performance.

Adam Currie