https://www.engineeringnews.co.za

Internet penetration could add $300bn to Africa’s GDP

20th November 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

Font size: - +

The application of the Internet has yet to reach the levels of economic impact in Africa that it has in other emerging and developed economies, but, over the next decade, it was expected to take hold on a much larger scale, McKinsey Global Institute said on Wednesday.

Following a decade of economic expansion, Africa was “going digital” and, if the impact of Internet penetration matched or exceeded the level of impact that had already been achieved by mobile telephony, the result could be a “leap forward” in Africa’s economic growth and development.

This was according to a new report by McKinsey, ‘Lions go digital: The Internet’s transformative potential in Africa’, which showed that the impact of the Internet could contribute some $300-billion to Africa’s gross domestic product (GDP) by 2025.

The report noted Africa was a continent in transition, with urbanisation and the rise of the middle‑class consumer fuelling growth.

Currently, 16% of the continent’s one-billion people were online, with more than 720-million Africans accessing the Internet through mobile phones – 67-million of them smartphones – and 167-million Internet users and 52-million Facebook users.

The current contribution of the Internet to the overall GDP of Africa was currently about $18-billion, or 1.1%.

This was expected to grow to between 5% and 6% of GDP, matching economies such as Taiwan, the UK and Sweden.

However, if the Internet had the same effect as mobile telephony in Africa, it could account for as much as 10% of total GDP by 2025.

Further, by 2025, Internet penetration would reach more than 50%, as mobile networks are built out and the cost of Internet-capable devices continues to fall, with Internet users rising to 600-million and smartphone distribution up to 360-million.

This would likely produce $75-billion in e-commerce sales and about $300-billion in productivity gains in key sectors.

“Evidence of what is to come can already be seen in Africa’s major cities, where consumers have disposable income, more than half of residents have Internet-capable devices, and third-generation networks are up and running,” the report said.

Ambitious information and communication technology (ICT) infrastructure was being planned across the continent, including the expansion of undersea cable systems and new fourth-generation networks, with the pursuit of various governments’ Internet agendas and national ICT strategies – albeit still in the early stages of development and implementation.

Edited by Creamer Media Reporter

Comments

Array

Showroom

Schauenburg SmartMine IoT
Schauenburg SmartMine IoT

SmartMine IoT has been developed with the mining industry in mind, to provides our customers with powerful business intelligence and data modelling...

VISIT SHOWROOM 
Hanna Instruments Image
Hanna Instruments (Pty) Ltd

We supply customers with practical affordable solutions for their testing needs. Our products include benchtop, portable, in-line process control...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.304 0.358s - 164pq - 2rq
Subscribe Now