By: Kuseni Dlamini

In a global economy increasingly characterised by information, broad- band networks are the essential path- ways along which the information content, services and applications travel. Broadband network infrastructure has transformed economic activity in much the same way as the development of rail, road and electricity infrastructure did in previous eras. These infrastructure developments all resulted in economic efficiencies and new economic opportunities for individuals, companies and governments, boosting economic growth. As much as broadband has resulted from economic development, it is now increasingly driving it.

This has enormous implications for businesses in Africa, including small, medium- sized and microenterprises (SMMEs), which play a vital role in economic invigoration. Without technology, Africa’s economy cannot advance, and this will lead to stagnation, growing inequality and reduced competitiveness.

Broadband provides a business platform as well as access to finance and efficient trade through ecommerce, and many SMMEs are taking advantage of a technology-enabled shared economy.

According to a World Economic Forum (WEF) research report titled ‘Fourth Industrial Revolution’, technology platforms – which are becoming increasingly easy to access and use, owing to high smartphone penetration – bring together people, assets and data and create new ways of consuming goods and services.

Technological advances have lowered the barriers for businesses and individuals to create wealth and have changed the personal and professional environment for workers. The WEF found that new platform businesses are rapidly multiplying into many new services, ranging from laundry to shopping, chores, parking, massages and travel.

Among the many benefits for SMMEs, efficient and accessible broadband infrastructure in Africa provides the ability to easily enter the knowledge economy through access to the latest research, news and information and apply online for projects and tenders. In seeking new business, SMMEs can create online profiles, leading to promotion through search engines and social media platforms. Connectivity results in the ability to connect to international business and consumer markets, apply for and manage finance online, develop the business through ecommerce and connect to global trade.

Over the past decade, sub-Saharan Africa has managed to leapfrog telephony trends and, through mobile phones, has brought voice services to more than three-quarters of the population. According to data from the International Telecommunication Union, the yearly growth rate of subscribers reached 66% in 2005 and 44% in 2006. This was dramatically higher than the growth figures in many advanced countries, where the growth rate was between 8% and 12%. Africa now has more than 980-million subscribers, about 730-million of whom are in sub-Saharan Africa.

However, the divide with respect to Internet access is widening – much of the region is falling behind the rest of the world in terms of broadband connectivity. According to the Commonwealth Telecommunications Organisation, by June 2012, a total of 341-million people in sub-Saharan Africa lived beyond a 50 km range of a terrestrial fibre-optic network. The data showed that decreasing the range to 25 km would increase the number of people living beyond reach of an operational fibre-optic network to 518-million – more than the entire population of the European Union. This lack of access is caused mainly by limited supply and prohibitively high prices.

A lack of connectivity translates into a lack of progress. The Organisation for Economic Cooperaion and Development has documented that, for every 10% increase in broadband penetration, there is a 0.9% to 1.5% increase in gross domestic product growth. This kind of growth would have profound impacts on Africa’s standing, its economic activity and the standard of living of its people.

Nowhere is connectivity for businesses as well as individuals more important than in rural areas, where socioeconomic inclusion remains the dominant reality.

At this stage of Africa’s development, we have the ability to once again leapfrog the development stages other nations have been through. With the advance in technology, Africa’s population of more than 1.2-billon people could connect with one another and to the world. This connection can lead to improvements in education, health, communication, trade, business and industry. It also has a much bigger potential impact – it would empower Africa to compete on a global scale and advance its economies to create jobs and alleviate poverty.

An important trend is the expansion of mobile broadband and the uptake of smartphones. Global System for Mobile Communications Association forecasts estimate that, by 2020, Africa will have about one-billion subscribers, more than half of them with a smartphone. About two-thirds will be connected to 3G or higher network technologies. This is a vitally important development.

Any business operating in Africa knows that infrastructure investment is vital. Investment in broadband could deliver the biggest single return in the history of the continent. SMMEs need to exploit the benefits that broadband and the digital economy can offer to create a buoyant and vibrant commercial sector.

Dlamini is chairperson of Massmart and Aspen Pharmacare Holdings. He was recently invited by The Telegraph to the Future of African Broadband Summit, in London, where he participated in a panel discussion titled 'SMEs - How to accelerate SME digital enablement'. He based this article on his insights from that discussion.