- April 12, 2018
- Posted by: Adrian Hall
- Category: More Africa News
The mobile industry in West Africa is forecast to contribute more than USD 50 billion annually to the region’s economy by 2022, according to a new study by GSMA published at the ‘Mobile 360-West Africa’ event in Cote d’Ivoire. The new report calculates that the region’s mobile ecosystem contributed USD 37 billion in value last year, equivalent to 6.5 percent of GDP, and will grow to USD 51 billion (7.7 percent 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. 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 percent. 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 sixteen.
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 , there were 29 live 4G (LTE) networks in nine countries across West Africa, six of which have launched in the last year. The 3G and 4G together accounted for 36 percent of West African mobile connections in 2017 and are forecast to rise to 94 percent of the total by 2025.
Local operators are expected to spend USD 8 billion (capex) over the next two years building out and upgrading their networks. The expected increase in the mobile ecosystem’s contribution to the West Africa economy over the next five years will be due primarily to productivity gains. The greater availability of mobile broadband networks, for example, will enable improved access to information and services, which in turn drives efficiencies in business processes across many industries, including finance and health. Alongside the economic contribution, the mobile ecosystem also supports jobs and contributes to public funding.
In 2017, the mobile industry in West Africa provided employment to more than 200,000 people, predominantly in the retailing and distribution of services and handsets, and made an annual tax contribution to the public finances of governments of USD 4 billion. 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 percent of the region’s population, up from just 28 percent at the start of the decade.