To help strengthen broadband infrastructure and improve online access to digital services for individuals and businesses in more than 12 countries in sub-Saharan Africa, global development institution International Finance Corporation (IFC) has invested in a new fund by Convergence Partners Africa, an investment management firm focused on the technology, media and telecoms sectors in Africa.
The Covid-19 pandemic has accelerated the adoption of digital technologies and the demand for digital infrastructure, which are helping to connect businesses with customers and suppliers, creating new channels to access health and education services, and enabling entrepreneurs.
However, it has also exposed the digital divide in Africa, the IFC notes.
The IFC’s equity investment of $25-million in Convergence Partners’ Digital Infrastructure Fund would promote improved digital connectivity and access to digital services by investing in independent operators and service providers in sub-Saharan Africa.
The fund has a target size of $250-million.
Investments made through the Digital Infrastructure Fund will support critical digital infrastructure companies and projects including broadband networks, fibre cable systems, mobile towers, digital service provider platforms and data centres, adding new connectivity and data centre capacity in many countries in Africa where such infrastructure is currently limited, the IFC notes.
Internet access in Africa relies largely on mobile networks. Mobile broadband penetration stands at only about 34% and fixed broadband at less than 5% across most of sub-Saharan Africa, excluding South Africa.
Africa also experiences a large urban and rural connectivity divide, with 28% of urban households having access to the Internet compared with only 6% in rural areas, according to the International Telecommunications Union, the IFC notes.
“We are delighted to have achieved this milestone particularly given the headwinds in African private equity fundraising generally, and the impact of the Covid pandemic on business activity, over the past 12 months. We are very pleased with the level of support from both repeat and new investors and believe this reflects our solid track record and the opportunity Convergence Partners’ Digital Infrastructure Fund presents at this crucial time in both a technology and African context," Convergence Partners CEO Brandon Doyle says in a separate statement.
“In the past 20 years, we have witnessed the exponential growth of internet penetration on the African continent. Internet penetration in sub-Saharan Africa alone has grown tenfold, compared to the threefold increase the rest of the world has seen.
As Convergence Partners, we pride ourselves on contributing to this growth through our numerous communication infrastructure investments across the Continent. However, the Covid-19 pandemic has shown us that there is still much work to drive digital inclusion," Convergence Partners chairperson Andile Ngcaba comments.