Africa – How mobile phones contribute to the social and economic development

Everyone who knows me, knows I´m addicted to my BlackBerry. Okay I´m not as addicted as Galina described in her post; I would stop using my phone! Nevertheless I can´t imagine a world without a mobile phone. Could you?

This is when I thought about Africa. I mean these people are happy without Information and Communication Technologies, but then I googled “Africa phones” and I came across very interesting articles (1,2,3). According to London Business School an increase of 10 % in mobile phone sales can increase the GDP growth of developing countries by 0.6%. Have you ever thought that mobile phones could contribute that much to the economic growth?

Can ITCs really lead to such a progress in developing countries or would it be better to stick to the good old aid of providing food and medical care?

Africa– continent with the highest mobile phone growth rate

A couple of years ago, Kofi Annan criticized the “Digital Divide”, which describes the imbalance of people who have access to ICTs and people who have not. In 2006 ITU (Internationale Fernmeldeunion) found out that 95 out of 100 Africans could not use Internet whereas 1 out of 2 inhabitants of the G8 countries could.

Nevertheless, mobile phones spread quickly. In 2008 198 million Africans used a mobile. Africa is the continent with the highest mobile growth rate, almost 50% each year! The reason is that a mobile is so versatile. Therefore the UN and World Bank work on plans to support the social and economic development by introducing ICTs like mobile phones, radio, television, Internet and computer.

Is this the best aid we can give?

Of course, discussions arose; if it is useful to focus on the use of technologies instead of concentrating on the basic needs like food and medical care.

On the one hand “pro ITCs” argue that excluding poor people from the use of ICTs means to deny them access to sources of knowledge and communication. Moreover, they point out that no one can imagine a university, a hospital or a company without computer, Internet and mobiles, because it improves and simplifies work enormously. Another important aspect they present is that online banking or “mobile banking” becomes more and more popular in Africa.

“Mobile banking” in Kenya

The majority of Africans has no bank account. This is why the telecommunications company Safricom introduced “M-Pesa” in Kenya in March 2007, which gave them the chance to use their mobile phones as a kind of electronic purse. To get a better idea of what all that is about I will show you an example: An inhabitant of Nairobi can transfer money to his relative´s mobile account even though the relative might live in a village far away. This relative could then get the money from a local office or Safricom. This way neither of them has to drive through the country for hours.

According to SpiegelOnline this new offer spread rapidly. By now 8 million people use it. More than 200 million euro are transferred monthly. Consequently, a lot of companies changed their systems. Now people can use they phones in supermarkets, for school fees and even prostitutes can be paid this way…

Another feature one should consider is that service worker are more flexible now. They can drive to a client immediately. Farmers and Fishers can inform themselves about market prices so that they are able to organize their inventory and sales more effectively.

We shouldn´t only focus on mobile phones, think about the Internet, too. If African companies could create web pages, maybe that would help them to expand their business.

We see this is a highly beneficial market. Thus a lot of international companies now enter the market or think about how they could profit from that development. For instance Visa and Mastercard didn´t care that much about Africa, since hardly anyone had a bank account, but now they start thinking about new offers especially for Africans.

Final thoughts…

The progress in Kenya over the last years has shown that one can improve the living standard through Information and Communication Technologies. Nevertheless, I´m convinced that, we should continue supporting developing countries by providing them with food and medical care. ´Cause what does it matter if they have a mobile phone or computer but no access to clean water? And right now the system isn´t technically mature so some people have to walk 2 miles or to climb on a tree to actually use the phone…

Consequently I think ICT can contribute to the economic and social development but shouldn´t be the only aid we give.

This entry was posted in Business Ideas and tagged , , , by Franzi. Bookmark the permalink.

About Franzi a student, who regularly posts for the business application systems course. Over the last couple of weeks I realized that business and IT related topics can be quite intimidating at first, but if you take a closer look, research can be even fun. So enjoy my group´s blog, ´cause my colleagues do a pretty good job,too! ;)

4 thoughts on “Africa – How mobile phones contribute to the social and economic development

  1. What a great post! How thoughtful and interesting! The problem is, it reads as if you know all this already almost without having done any research on the web. If so, you are a genius. If not — if you went onto the web — where are your citations, your links? Your post would read much, much better if you embedded a bunch of links in your argument — everwhere you found some info, added a link to it, like this. That way, you provide me with an easy way to click from you to the people you learned from. And if you do that, your role/rhetoric is transformed from being the all-knowing authority to being (just) and adult talking to other adults. Make sense? Good Luck!!! Dr.B!

      • Excellent! The article reads much, much better with the links: I can go check them out, plus I see how you are using these links to support your voice. And you really have found your own voice here, it is thoughtful, accessible, and a pleasure to hear! I feel like you are talking to me as one professional to another, which is how I want to be talked to. Thanks! -Dr.b!

  2. Hey Franzi.
    That was pretty cool to read. One of those blogs where every time I think of a question as I read the text, it’s answered in the next line. Great job!
    I like what you said about mobile technology’s contribution to African aid. Very interesting to see how much banking is done with mobile phones. It reminds me of an article I read about India recently, where the trend goes in a similar direction. One thing I couldn’t help noticing was that the articles you listed where already a good 4 years old. Would be interesting to know how things have developed since then. Johann.

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