Africa’s Digital Transformation: Closing the Digital Divide

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Chamber members are building critical digital infrastructure in countries across Africa, transforming not only the way Africans live and work but also expanding trade and connectivity.

Africa’s digital transformation has opened new markets for U.S. exports and services and increased productivity, competitiveness, and e-government service delivery. It has also deepened partnerships among African governments, the U.S. private sector, educational institutions, and the African diaspora.

This transformation is a priority for the continent as the African Union has articulated goals for achieving digitally-enabled socio-economic development in its Agenda 2063, and the region’s Heads of State adopted a Digital Trade Protocol for the African Continental Free Trade Area (AfCFTA) in February to accelerate technology-driven innovation.

Telecom Towers Enabling Innovation

An illuminating new report on the independent tower industry’s role in Africa’s development was unveiled on April 11 at the U.S. Chamber of Commerce, based on research conducted by Telecom Advisory Services and sponsored by U.S.-Africa Business Center member SBA Communications. The report’s findings emphasize the vital role of the tower industry in enabling innovation, propelling capital spending in new technologies, and addressing the digital divide across Africa.

According to the report, the African digital divide persists primarily due to data affordability barriers, limited rural use, and low digital literacy. The report also outlines regulatory and policy recommendations to maximize the development of the tower sector and to enrich the digital ecosystem. A key takeaway from the report, and it is abundantly clear, is that expanding digital infrastructure and access is a force multiplier, not only for the digital ecosystem but, more critically, for businesses across the continent and for increasing trade and investment in Africa.

Most saliently, the report states that passive infrastructure sharing has been, and will continue to be, a critical factor driving network deployment across the continent. For example, a country with a digital divide of 69.64% would increase unique mobile broadband users by 14.63%, generating a 4.82% per capita increase in GDP over eight years if passive infrastructure sharing policies were implemented. One of the main challenges highlighted in the report points to varying regulatory frameworks across African countries, with some promoting infrastructure sharing and tower company operations and others lacking specific guidelines.

The report highlights significant progress in 3G and 4G network coverage, however, with projections of high deployment by 2030. As of 2023, wireless tower deployment in the 14 African countries profiled in the study has reached over 172,000 Africans. The report also posits that the independent tower industry is crucial for the future deployment of 5G and overcoming capital expenditure pressures faced by mobile network operators. The financial viability of single towers is contingent upon serving multiple operators, especially in suburban and rural areas.

The good news, according to the report, suggests that regulatory policies favoring infrastructure sharing play a significant role in expanding network coverage. Overall, the development of an independent tower industry has been fundamental for the development of telecommunications in African countries, considering the high level of internet penetration.

Digital Infrastructure Is Critical for Economic Growth

The tower industry provides the literal and figurative backbone for the successful expansion of the digital economy, a sentiment reflected in U.S. government engagement in the digital sector. During the 2022 U.S.-Africa Business Forum, co-hosted by the U.S. Chamber as part of the U.S.-Africa Leaders Summit, President Biden launched the Digital Transformation with Africa (DTA) initiative.

The goal of DTA is to expand digital access and literacy and strengthen digital enabling environments across the continent under three pillars: 1) Digital Economy and Infrastructure, 2) Human Capital Development, and 3) Digital Enabling Environment. Underpinned by the realization that new technologies are transforming the way Africans live and work, DTA intends to foster an inclusive, resilient African digital ecosystem led by homegrown African communities that is built on an open, interoperable, reliable, and secure internet.

As the Chamber’s White Paper on Digital Transformation with Africa emphasizes, to augment Africa’s role in the digital economy and for the continent to reap all its benefits, it is vital to facilitate investment in physical infrastructure, promote sound spectrum policies, and relieve consumer roadblocks to getting online.

Furthermore, the African Union’s Digital Transformation Strategy aims to harness digital technologies and innovation to transform Africa’s societies and economies to promote Africa’s integration, generate inclusive economic growth, stimulate job creation, erase the digital divide, and eventually eradicate poverty, secure the benefits of the digital revolution for socio-economic development.

Increasing access to open, interoperable, reliable, and secure Internet for African communities across sectors is essential for expanding greater economic growth across the continentExpanding access to and adoption of key enabling digital technologies, platforms, and services is critical to scaling the African technology and innovation ecosystem. The Chamber remains engaged and willing to facilitate connectivity among African and U.S. governments, peoples, and private sector stakeholders to unleash the full potential of the digital infrastructure sector on the continent.

Source: US Chamber