The Head, Sub-Saharan Africa at the GSMA, Mr. Akinwale Goodluck, in this interview speaks on the growth of mobile money across West Africa as well as various initiatives that have been introduced to deepen mobile connectivity and bridge digital exclusion gap in Africa. Emma Okonji provides the exerpts:
How is the GSMA addressing mobile internet penetration challenges in rural parts of Nigeria and other Sub-Saharan African countries that have left a large chunk of people unconnected, which also negates the vision of GSMA to deepen connectivity across Africa?
In Nigeria and in most sub-Saharan African countries, telecoms operators are encouraged to tap into the utilisation of the Universal Service Provision Fund (USPF), and in Nigeria, USPF has reached out to operators, offering them the opportunity to take advantage of the fund to drive rural connectivity and internet penetration. One of the chosen mechanism for increasing coverage in West Africa and sub-Saharan Africa has usually been through the Universal Service Provision Fund, but these have generally had limited success in overcoming the overall problem and sometimes the funds have not been deployed, leaving USPF as a de facto tax. One thing I think operators should do is to move away from USPF mechanisms and move towards Universal Service Obligations linked to low frequency spectrum. The 700 MHz and 800 MHz digital dividend spectrum for instance, will become available for assignment in African countries over the next few years. It is recommended that this spectrum be assigned to service providers that can deploy it efficiently with obligations to further improve mobile broadband coverage.
What in your view are the implications of the challenges to economic development across Africa?
The economic implication is that it could lead to digital exclusion, especially with people in rural communities. The particular challenge with digital exclusion is that the longer it persists, the longer it takes people and regions to catch up with a moving target. Digital exclusion can quickly result, therefore, in economic exclusion. So addressing and reducing digital exclusion requires a significant amount of investment because the unconnected are typically in rural areas where the subscriber acquisition costs are higher, compared to urban areas. Furthermore, the unconnected typically have lower disposable incomes, making the economics of network rollout even more challenging for service providers. The challenge therefore cannot generally be solved by governments alone. State budgets struggle with providing universal coverage in developed countries, and in Africa the magnitude of the unmet need is greater. Therefore, the emphasis should be on encouraging and enabling further investment, with the logical sources of such investment being the service providers.
What roles must African governments play to address the challenges of rural mobile internet penetration?
African governments can come up with regulatory frameworks that encourage investment, which will enable and motivate service providers to extend connectivity to rural communities. A key component to encouraging investment is to remove unnecessary barriers to such investment that may reside in the legal and regulatory frameworks. GSMA will continue to engage with African governments on the need to invest significantly in rural connectivity.
GSMA launched its West African Mobile Money Report at the just concluded GSMA Mobile 360 Conference in Abidjan, Côte d Ivoire. What were the outcomes of the report?
The report underlines the vital role that the mobile ecosystem is playing in contributing to economic growth, social development and job creation across West Africa. From the report, about 30 per cent of the West African population is connected and about 43 per cent are not connected, which could be as a result of issues with affordability, lack of digital literacy, or lack of vision for the benefit of the internet. The report however shows an increase in mobile money growth in West Africa, with a prediction that its contribution will reach $70 billion by 2023, which is about 9.5 per cent contribution to GDP, up from its contribution of over $50 billion in 2018, which is equivalent to 8.7 per cent of the region’s GDP. The report attributed the expected rise in mobile money contribution to the rising mobile phone ownership and the ongoing migration to mobile broadband networks and services across the West African region, Nigeria inclusive. To harness the power of a new generation of mobile users and mobile networks, we therefore urge governments and policymakers in West Africa to develop regulatory frameworks that encourage innovation and investment in the sector, enabling the provision of mobile-powered digital services to citizens across the region.
So what does the report seek to achieve?
It is a report that highlights mobile economy development in West Africa, in relation to mobile money growth. From that report, we can see the growth trajectory of mobile money in West Africa. The new report ‘The Mobile Economy, West Africa 2019’ is authored by GSMA Intelligence, the research arm of the GSMA, and it showed increase in the contribution of mobile money in West Africa. The report revealed that the number of unique mobile subscribers across West Africa, reached 185 million at the end of 2018, equivalent to 48 per cent of the region’s population. The report however said the number would rise to reach 248 million by 2025, which is 54 per cent of the region’s population. Presently, the West Africa’s mobile ecosystem directly employs around 200,000 people, supports 800,000 jobs in the informal employment sector, and a further 600,000 jobs across the wider economy.
What is GSMA doing about the section of the report that highlighted huge gap in mobile connectivity in rural areas of West African countries, even though it saw steady growth in mobile money penetration in the regions?
Yes, the report highlighted some gap in rural connectivity and we are addressing that by putting in place, funding for operators who have innovative ideas on how we can take connectivity to rural areas. We are looking at innovative solutions that address the amount of power required, the cost of backhauling, cost of equipment deployment, and cost of transportation among others. So if we have solutions that can reduce these costs, it makes it a lot easier for operators to deploy in rural areas, which will, in turn help people in rural areas to have access to the services at reduced costs.
The infrastructure companies (Infracos) have been licenced by NCC to deepen broadband infrastructure in Nigeria, but their rollout has been slowed down. What is GSMA’s position on this?
The Infracos were licensed in Nigeria by the Nigerian Communications Commission (NCC) to provide metropolitan fibre that will boost broadband penetration, with less emphasis on rural penetration, but the concern of GSMA is about mobile connectivity in the rural areas of ECOWAS communities, and Nigeria is a member of ECOWAS. But the truth is that the provision of broadband infrastructure is a question of infrastructure economics. The issue of infrastructure development cuts across African countries and Nigeria is not an exception. In providing infrastructure, operators have to first ensure that there are people who will take those services to people who can afford the services, and it is best for operators to start in an incremental manner to work closely with government and other stakeholders to achieve the purpose of infrastructure rollout, and ensure that all are included in the digital inclusiveness drive. So GSMA is working closely with various governments across Africa to help operators achieve the infrastructure rollout plan, especially in rural areas where majority of people are digitally unconnected.
GSMA is interested in enhancing collaboration between operators and African governments to boost mobile connectivity, but most times, government is slow in policy implementation, which may limit the speed of operators. How are you addressing this?
There are several engagements going on between African governments and industry stakeholders and the GSMA is interested in strengthening the engagements by encouraging collaboration between governments and industry players. GSMA has been involved in the conversations to deepen collaboration and we will continue to do so in order to bring governments up to speed with the pace of industry operators. In February this year, we had a meeting with all government regulatory agencies at the Mobile World Congress in Barcelona, Spain, and there were a lot of discussions on how the telecoms industry and governments could work better.
What is your take on 3G growth in most West African countries even though advanced economies have started rolling out 4G and 5G services?
The truth is that technology is evolving and we see 3G developing fast across West African countries to overtake 2G and become the leading mobile technology in West Africa this year, supporting about half of the region’s mobile connections. However, 4G momentum is already building, as 10 new 4G networks have recently been launched in West Africa, including the first ever 4G networks in Burkina Faso, Sierra Leone and Togo. 4G services were launched in Nigeria by Mobile Network Operators (MNOs) few years ago.
Multiple taxes are the bane of insufficient rollout of telecoms services in rural areas of African countries. What is GSMA doing to address this issue?
Multiple taxes on telecoms services are reoccurrence features across sub-Saharan Africa and West Africa, driven by government deficits. All these boils down to sector specific taxes and GSMA frowns at that. So wait we are doing at GSMA is to advocate to various governments, the alternatives to multiple taxes. For instance, the GSMA has a very strong tax programme and we have done a lot of work in sub-Saharan Africa. We are currently proposing resolutions and solutions to various governments. Across Africa, we believe that if we are able to take person-to-government payments electronically, then governments will generate more money for government, block financial loopholes and ultimately dampen the need for sector specific taxes.
Spectrum licence is also an issue for telecoms operators in Nigeria and in most African countries, which could affect mobile connectivity penetration. How could this be addressed?
In Nigeria, spectrum licence is not much of an issue, compared to other African counties and this is largely so because NCC has done a lot in the area of spectrum licence. The regulator in Nigeria is committed to best-in-class spectrum practices and this is also evident in other African countries. We have seen regulators in Togo, Burkina Faso, Côte d Ivoire, Ghana, releasing various spectrum frequencies for operators. So we expect commensurate increase in service rollout in countries where their telecoms regulators are releasing frequency spectrums to the operators. We envisaged that continuous rollout of telecoms services will boost 4G rollout and that by 2023 and 2024, 4G technology will overtake 2G technology and become the second most popular means of internet adoption in West Africa.
What are some of the success stories for GSMA in terms of achieving connectivity across African countries?
One thing that GSMA is actively involved in is that it has recognised the potential of mobile financial services being enabler for bringing people into the digital economy. Mobile money for sure is a major opportunity in driving this growth and we have seen mobile money scaled in Kenya, Ghana, and in most African counties and we expect to see a major upswing in Nigeria as a result of the recent changes in the telecoms regulation. This is one area where GSMA has spent a lot of time and resources and we are very pleased with the positive outcomes across West Africa.