Some 477 million people in sub-Saharan Africa are currently subscribed to mobile services, and that’s according to the GSMA’s latest report on the state of the mobile economy in sub-Saharan Africa (2020).
That amounts to 45 percent of the region’s population; seems like a decent proportion and an indication that the African sub-region on the path of growth. The report even estimates an additional 137 million subscribers over the period to 2025, representing a CAGR of 4.3 percent.
The bad news? The same report highlights that nearly 800 million people in the region are still not connected to the mobile internet.
Notably, 272 million are now mobile internet users, representing just 26 percent of the population — basically the population of Nigeria and Ethiopia combined; that’s just two countries out of 54.
However, smartphones account for 44 percent of mobile connections in sub-Saharan Africa and only 9 percent have 4G connectivity.
Although the GSMA has it that mobile technologies and services generated 9 percent of GDP in Sub-Saharan Africa in 2019 (a contribution of more than USD 155 Bn), there’s still plenty left undone.
If anything, the numbers suggest that Africa’s much-vaunted internet market is still quite small; certainly a lot smaller than the hype around it. Compared to other regions of the world, internet access is still quite low on the continent.
According to InternetWorldStats, internet penetration in Africa stood at 39.3 percent as of Q1 2020, significantly lower than the global average of 58.8 percent and trailing the actual average of 62.9 percent posted by the rest of the world, by some distance.
These numbers say a lot about the internet opportunity in Africa at present. It’s been nearly two decades since the African continent began to open up to the “internet business,” but it’s quite odd that it can still be said that internet-based businesses may still be too early for Africa.
Indeed, many startup models have attempted to unlock the consumer economy in Africa’s internet market, but scaling to profitability has been tough.
Classifieds have been a hard nut to crack, ultimately ending the likes of Dealdey and Efritin. E-commerce has been hard to profit off of, as Jumia, Konga, and Takealot have found out. Ride-hailing and edtech seem hamstrung. Even the “free” model has failed to flourish too, seeing as it is unsustainable (think OPay).
It’s fair to say that Africa’s consumer internet market has been hard to crack. And even though this is partially down to infrastructural and economic deficits, it’s hard to ignore the fact that the market is, at the moment, simply not big and robust enough. The fact that 74 percent of the continent’s population is still not online is hard to ignore.
But things could change significantly very quickly. For instance, the GSMA, in its latest report, predicts that the mobile market in the region will reach several important milestones over the next five years: half a billion mobile subscribers in 2021, 1 billion mobile connections in 2024, and 50 percent subscriber penetration by 2025.
It is also forecasted that over the next five years, the number of smartphone connections in sub-Saharan Africa will almost double to reach 678 million by the end of 2025 – an adoption rate of 65 percent.
Numbers like those would certainly sweeten the deal for internet businesses on the continent since it means a larger addressable market and better grounds for scale.
Featured Image Courtesy: IEEE Spectrum