Report: Mobile Phones Transform Lives in Africa
DAKAR — Rene Mendy, a street vendor in Dakar, has never had enough money to open a bank account. But now, thanks to an emerging mobile phone banking service, he has access to many financial services.
Using a service called Orange Money, for example, he can deposit or withdraw as little as 500CFA (about $1), pay bills from anywhere, recharge phone credit and transfer money to family members.
Launched on the continent in Ivory Coast in 2008, the service came to Senegal in 2010 as a pilot program with just 300 users. By July 2012, operating across ten African countries, Orange Money reported their four-millionth subscriber.
According to the World Bank, Sub-Saharan Africa is now home to approximately 650 million mobile phone subscribers, a number that surpasses the United States and European Union, and represents an explosion of new communication technologies that are being tailored to the developing world.
“Faster than TV, definitely faster than electricity, more people have access to mobile phones and hence communication," says Samia Melhem, the World Bank’s Regional Coordinator for Information and Communications Technologies for Africa.
Mobile phones, she says, are the fastest growing technology on the continent.
"More people have access to internet today in Africa than they do to clean water, or even sanitation," she says, explaining that more than two-thirds of African adults now have access to Information and Communications Technologies, or ICTs. "So we can say this has been the most significant revolution in terms of changing the African landscape and how people live their daily life."
Largely attributed to a rapid infrastructure expansion — including the addition of more than 68,000 kilometers of fiber-optic cables and 600,000 kilometers of national network lines — Melhem notes that mobile banking in particular is one of its most popular innovations.
“People in the West don’t understand it, because most people have bank accounts and they have credit cards," she says. "[Mobile banking] is the instantaneous acquisition of cash at a much lower cost. It’s the cost of sending an SMS, which is almost nothing compared to what traditional transfer agents, like Western Union, would charge - $10 or more for a particular money transfer.”
In addition to financial services, Melhem says mobile phones have improved access to health information and services, made agricultural market data available to rural farmers, increased government transparency, saved people time and money on transport, and increased their overall happiness by reducing isolation.
According the latest World Bank report, mobile phones were directly associated with the creation more than 5 million jobs in Africa last year and contributed 7 percent to Africa’s Gross Domestic Product — higher than the global average.
Melhem says the benefits of ICTs in developing countries could be even greater if more people understood how to use and take advantage of mobile phone technology.
“The issue, sometimes, is how do you educate a population that went from zero access to information to now access to information around the whole world?" says Melhem, explaining that ICT may further benefit the developing world as more people understand how to use it to their advantage. "Beyond just sending texts and voicemail, how do we use ICTs to revolutionize how agriculture is being done, to revolutionize how industry works? And how can people absorb this in a way that is culturally acceptable?”
The World Bank says that as mobile broadband infrastructure continues to develop and as the cost of smartphones and other technologies continues to fall, ICTs will have an even greater economic and social impact on the lives of Africans.
It is estimated that the ICT sector in Africa could be worth more than $150 billion by 2016.