According to the findings of the first edition of the Digital Africa Index (DAI) of the Global Association of Mobile Phone Operators (GSMA), 41 African countries are currently experiencing low digital development due to an unfavorable policy and regulatory framework. These include countries such as Tunisia, Cameroon, Ivory Coast, Ghana, Algeria and Gabon.

The GSMA’s brand new index, comprising the Digital Nations and Societies Index (DNSI) – which measures digital adoption and usage by consumers, businesses and governments in Africa – and the Digital Policy and Regulation Index (DPRI) – which analyses the policy and regulatory framework influencing this adoption – aims to identify constraints to digital development in Africa, including policy and regulatory gaps, in order to foster inclusive and sustainable digital transformation.

Within the continent, GSMA estimates that mobile internet usage is most prevalent in North Africa. The network coverage gap is greatest in Central Africa, while the usage gap is most pronounced in East Africa. There is also a significant digital divide within countries. In sub-Saharan Africa, for example, people in rural areas are 54% less likely than those in urban areas to use mobile internet, and women are 32% less likely than men to use mobile internet.

The majority of mobile users in Africa still use 2G or 3G technologies. 4G and 5G technologies account for just over a third of total mobile connections, while 4G coverage was estimated at 73% of the population by the end of 2023. 4G/5G usage is widespread in Southern and Northern Africa, but not in Central, Eastern or Western Africa. This under-utilisation of 4G investments, combined with the slow adoption of new technologies by consumers, businesses and governments in the region, raises the challenge of maintaining private investment in new technologies to drive the development of artificial intelligence, automation, robotics and other technologies.

Beyond the general public, the weak policy and regulatory framework also impacts the digital development of public administration and businesses. According to the GSMA, while many countries are showing better results in the area of ​​e-government, there is still room for improvement in improving e-government services, increasing the use of P2G/G2P (person-to-government and government-to-person) payments, and scaling up govtech solutions that improve service delivery and support government systems.

On the business side, digital development is at its lowest as few countries have a vibrant startup ecosystem like Nigeria, Kenya, South Africa, Egypt, Tunisia and Ghana. They are also few to show significant use of Internet of Things (IoT) solutions or to develop new ICT-related solutions. The latter is measured based on the number of ICT patents granted per capita. The only countries showing progress in this area are Mauritius, Seychelles, South Africa, Tunisia and Morocco.

The use of digital technologies in commerce (electronic merchant payments, online transactions, etc.) also remains limited outside of a few countries such as Kenya, South Africa, Mauritius, Zimbabwe and Namibia.

What’s blocking it?

The political and regulatory obstacles to digital development in the majority of identified African countries are of several types, including the lack of monitoring of broadband strategies to measure progress made in terms of financial accessibility, skills and connectivity among disadvantaged population categories (particularly women and rural populations); the lack of an effective, transparent and efficient universal service fund; and the lack of a regulatory framework favorable to technological start-ups.

Several countries, such as Burundi, Eritrea or the Central African Republic, for example, lack regulatory clarity in data protection, cybersecurity and cross-border data transfer. Several, such as Tanzania, the DRC or South Sudan, impose sectoral taxes that have significant distortive effects.

Most countries score below 50 in licensing and spectrum management. This is due to the lack of a spectrum roadmap in many countries, incomplete allocation of available IMT spectrum, and a ban on leasing or selling spectrum. Some countries are also penalized by high spectrum fees and the lack of technology- or service-neutral licenses.

Regarding network regulation, most countries lack harmonised deployment regulations, lack simplified rules for small cell deployment, apply rights of way (which impacts operators’ ability to deploy fibre backhaul) and often impose onerous quality of service and coverage obligations without providing political or financial support.

The potential economic benefits of accelerating connectivity in Africa are significant. GSMA Intelligence analysis shows that closing the continent’s usage gap by 2030 could boost Africa’s gross domestic product (GDP) by nearly $700 billion over the 2024–2030 period. But to achieve this, the Association has identified several policy priorities that countries must address now.

This includes allocating all available frequency bands at an affordable price and under technology-neutral licences. This will improve network coverage and quality for mobile users, as well as the provision of digital and networking solutions for businesses, thereby promoting efficiency and productivity gains.

GSMA also recommends the removal of sector-specific taxes on mobile services and handsets. It believes this will allow the industry to increase investment in networks while making new technologies more affordable and accessible to consumers.

“Regulatory uncertainty” also needs to be reduced, according to the GSMA, by harmonizing regulations for network deployment, promoting regulatory parity among digital service providers, and ensuring that coverage and quality of service requirements are fit for purpose to strike a balance between consumer needs and promoting digitalization. This will encourage continued investment in the technologies of the future.

Finally, Universal Service Funds (USFs) need to be reformed to ensure more efficient, cost-effective and transparent delivery of connectivity to remote and underserved areas. The aim is to foster wider adoption of digital services to attract locally relevant digital content that will boost our digital economies.

Source: Agency EcoFin