Africa Investment Forum: Strengthening Africa’s ICT infrastructure can pave the way for a digital leap forward | African development bank
One of the key lessons for Africa from the Covid-19 pandemic is that it has had an outsized negative impact on workers in jobs that cannot be done remotely. These jobs are typically found in the informal sectors that dominate African economies. Services and other sectors more conducive to remote working have been much less affected, reducing the need for government interventions in social safety nets.
The pandemic has also accelerated the digital transformation known as Fourth industrial revolution (4IR), which was already underway worldwide. As the 4IR progresses, Africa cannot afford to be left behind. ICT technologies can fill gaps in a number of key sectors including agribusiness, communications and financial growth, unlock better jobs, more efficient tracking logistics for supply chains and even better health care outcomes.
Fortunately, the continent presents immense opportunity in a range of areas, including mobile services, broadband infrastructure and data storage. The continent’s young and rapidly growing population, which has come of age in the digital age, is hungry for tools and technologies to meet its strong creative and entrepreneurial needs. And the absence of legacy infrastructure in many countries provides an opening to adopt the latest standards and innovations.
Strong coordination between business, government and other actors such as civil society and regional agencies will be needed.
A few days before the opening of its Market Days 2022 event, the Africa Investment Forum is well placed to play a vital role in channeling investment into information and communication infrastructure.
Founding institutions of the Africa Investment Forum, African development bank and the European Investment Bank, supported Western Indian Ocean Cable Company to provide high capacity connectivity of over 550 locations in 30 African countries with key financial and commercial centers around the world.
The demand for mobile services, especially smartphones, is expected to continue to grow rapidly across Africa. The GSMA, an association of the largest number of mobile operators in the world, predicts that around 600 million Africans will subscribe to mobile services by 2025, up from 456 million in 2018. Mobile broadband will drive demand not only for creative industriesbut for services in fintech and telehealth, creating a ripple effect.
There is also a growing demand for so-called ICT backbone infrastructure, which includes many different types of equipment. This includes root servers, fiber optic broadband lines, network switches and routers, and cell towers, to name a few. Building on all of these elements represents opportunities for investors to respond to galloping demand but also significant job creation potential in construction, installation and services.
The IFC and Google report, eConomy Africa 2020, projects an African internet economy that could reach $180 billion by 2025, or 5.2% of the continent’s GDP. By 2050, the potential contribution could reach $712 billion, or 8.5% of the continent’s GDP.
Another challenge that the Africa Investment Forum strives to overcome is the perception that investing in Africa is risky. Working with partners such as the US Trade and Development Agency, the Africa Investment Forum prepares projects in its pipeline, making them investment-ready.
Given the theme of Market Days 2022 – building economic resilience through sustainable investments – transactions involving smart and resilient infrastructure should be in the spotlight.
The event, which runs from November 2-4, will showcase billions of dollars in ICT energy, agribusiness and healthcare deals to investors. It will also promote sectors where Africa has a comparative advantage, such as creative industries, music, film, textiles and sports.
Since its inception in 2018, the Africa Investment Forum platform has mobilized investment interests of over $100 billion.
The platform is an initiative of the African Development Bank and seven other development institutions: Africa 50; the African Finance Corporation; the African Export-Import Bank; the Development Bank of Southern Africa; the Trade and Development Bank; the European Investment Bank; and the Islamic Development Bank.