Why is 5G and closing the mobile usage gap in Africa critical for Africa’s future?

5G could boost Africa’s future economic growth, turning African nations into serious global players. However, reaching this goal could be tricky and the mobile usage gap in Africa needs to be reduced.

While mobile phone access is widespread, many Africans are entrenched in 3G and 4G network usage. The idea of upgrading to 5G may seem unnecessary and counterproductive. Additionally, many have coverage, but can’t or won’t use that coverage.

GSMA’s Mobile Economy Sub-Saharan Africa 2024 report suggests closing mobile usage gap in Africa could boost GDP by $170 billion by 2030. The UN suggests Africa’s GDP could increase by $712 billion by 2050. Unfortunately, there are several barriers to mobile connectivity adoption.

What is the state of mobile networks in Africa?

Despite increasing mobile network coverage and falling data costs, connectivity in Sub-Saharan Africa is lacking. However, the mobile usage gap in Africa is increasing.

While mobile network operators expand coverage, people fail to adopt mobile internet connections. Yet, cracking the usage gap could cause GDP to skyrocket by attracting foreign domestic investment.

Coverage is expanding, but people aren’t adopting

In Africa, roughly 50% of connections are 3G, 33% are 4G, 10% are 2G, and 5G makes up the rest.

Opensignal reports that Africans often continue using legacy networks despite 4G and 5G network deployments providing coverage. Additionally, despite Sub-Saharan Africa’s mobile internet coverage gap dropping 36% to 10% between 2015 and 2024, connectivity barriers remain.

Counterintuitively, the percentage of people with mobile internet coverage who were using it fell by 2% between 2023 and 2024.

Devices cost too much

In Sub-Saharan Africa, the main barrier to adoption for those aware of mobile internet but not using it is affordability. For the poorest 20% of people in Sub-Saharan Africa, an entry-level device can cost 87% of their monthly salary.

Low-cost data isn’t helping

Data is also an issue. The cost of 1GB and 5GB of data has dropped in recent years in Sub-Saharan Africa. However, that drop in price doesn’t mean citizens will buy more data and more expensive phones.

If a person living in poverty only needs 1GB of data, they’ll probably spend any savings on food and water. Thus, there is no incentive to buy a more expensive phone with greater functionality that requires more data.

So, why is 5G so critical to Africa’s future? It’s too expensive for citizens and exceeds their existing needs. The answer might be about foreign domestic investment and urban population growth.

Why is 5G important for Africa’s future?

There is more investment going into 5G in Africa than 4G. Here are some possible reasons for it:

Urban population growth

By 2050, Africa is expected to have the second-largest urban population after Asia. Almost all of Africa’s population of 1.5 billion people will live in cities.

Factors boosting urban populations include:

Climate conditions, food insecurity, and land pressures.
Access to education, utilities and services, and jobs.
Increasing birth rates and decreasing death rates.

Cairo, Egypt (2019)

In urban environments, people may be able to access better education, healthcare, and jobs, raising their quality of life. As people improve their situation, 5G adoption could increase and further improve their lives with more reliable and faster mobile connections.

So, why extend 4G and 5G coverage to hard-to-reach areas when people are moving to cities for a better life? Operators can save money by simply providing network coverage to cities. Once people are in the cities and have adopted 5G, governments can leverage those capabilities to increase GDP.

Income generation

A 5G-enabled workforce could attract foreign domestic investment and increase GDP. Closing the usage gap, the gap between having mobile internet coverage and using it, could generate $170 billion in GDP. The UN’s Economic Commission for Africa’s 2024 report ‘Building an Inclusive and Sustainable Digital Future for Africa’ suggests Africa could generate $712 billion by 2050.

Businesses are already investing in other regions through 5G initiatives. Ericsson built a 5G smart factory in Texas, and Vodafone believes 5G could boost manufacturing in the UK. Africa could see similar economic and industrial growth through 5G.

Reduced losses from crime

Beyond income generation, there is another financial benefit from 5G infrastructure. There is a growing need for 5G Fixed Wireless Access (FWA) in Africa, according to GSMA Intelligence.

Last-mile infrastructure presents a significant problem for operators in Africa. International criminal organisations methodically target the physical infrastructure of legacy telecommunications.

Annually, the theft of copper cables in South Africa alone results in direct and indirect economic losses of $10.6 billion. The issue is much the same for Nigeria.

5G FWA could limit these losses, removing the need for extensive physical, last-mile infrastructure. It’s not a cure-all, but it could help.

Comparing Africa to Saudi Arabia and China

The idea of Africa leapfrogging ahead with its digital transformation isn’t far-fetched.

In 2012, CNN noted Africa’s digital-first status, highlighting that more people had access to mobile phones than to electricity. Today, despite lagging behind the 5G rollouts of other regions, Africa is on a path to 5G success.

Geography and infrastructure

Low landline usage and populations centred around water sources enabled Saudi Arabia to rapidly and cost-effectively provide 5G coverage. Like Saudi Arabia, Africa has limited fixed-line usage, and populations are increasingly converging around resources.

Among African inhabitants:

Landlines only reached 3.1% in 2004 and dropped to 2% in 2015.
Mobile phone penetration increased from roughly 2% in 2000 to 65% by 2011.

Operators will focus 5G deployments on urban populations, as it’s cheaper than extending 5G to dispersed rural populations. In cities, the population will have better access to education, healthcare, and jobs. As education and perceived improvements in life are achieved, populations will likely access the benefits of 5G.

Urbanisation and increased income

As China’s population became urbanised, its economy grew. Between 1978 and 2018, China’s GDP increased annually by 9%. Over 800 million people were lifted out of poverty as the population gained access to better healthcare, education, and jobs.

China’s low-cost labour in urban populations attracted foreign domestic investment as globalisation increased in the late 1970s and early 1980s. Today, China is a leading global economy with hundreds of millions of skilled workers, building advanced technologies.

Conclusion

There are considerable differences between China, Saudi Arabia, and Africa concerning geographies, job types, conflicts, and myriad governmental strategies. Additionally, China grew through the offshoring of manufacturing jobs, and recently, there have been efforts to onshore manufacturing jobs.

However, economic growth in Africa could be spurred by superior technology, a young, urbanising population, and low-cost labour. Time will tell if they can avoid the generational consequences that befell China.

“The prospect of attracting foreign domestic investment and improving access to healthcare, education, and jobs makes 5G critical for Africa’s future. Many businesses recognise the potential of 5G, and investment in 5G is outpacing 4G.

“However, while 5G holds immense potential for Africa’s future, a 4G fallback will also be essential. It’s a tricky path, but the faster Africa closes the mobile internet usage gap and rolls out 5G, the quicker they will see the benefits.”

Srikanth Rajarao, Business Development Manager at Squire Technologies