Africa is a hub of digitalization. Over the last decade, the continent has proven itself a worthy opponent in the technology race by rapidly adopting technology and innovations. As a result, it implemented practical solutions for the challenges its governments and industries face to better efficiencies, remove barriers, and explore new products or services. The telecom industry in Africa is the most prominent one to advance through improving telecommunications networks.
African Telecom for 2023
The numbers show increased (mobile) internet access, advances in information and communications technology (ICT) products and services, and strong demand from rapidly growing urban populations. Not to forget, the 2020 pandemic has been influential in accelerating African digital innovation across several sectors. Consequently, the demand for more digital infrastructure and services across the continent has increased accordingly.
There are three main positive drivers for this industry in 2023.
Increase in Demand
The demand for connectivity has been steadily gaining momentum since the pandemic dragged the world through the wringer. During those difficult times, the population scrambled to make the workplace work-from-home ready. This situation is difficult for many as there needed to be more connectivity and tools to accommodate the change in people’s daily lives. This demand is on the rise still as companies across the board realize the efficiency of a work-from-home policy and the benefits of a stable connection for all.
Growing Competition and Infrastructure
This increase in demand has led to growing competition in the industry and an on-the-rise- infrastructure. Over the last year, telecom startups and investments have seen a rise. As a result, they contributed to the sector’s advancements. This boom in the industry has attracted many to invest in and showcase the African telecom sector, as evidenced by GITEX Africa. For reference, GITEX GLOBAL is a global technology show organized by and taking place at the Dubai World Trade Centre in the U.A.E. to unify the world’s most influential tech startups, ecosystems, economies, investors, cultures, and businesses in one place.
In October 2022, the great minds behind the event announced the first African edition of arguably the most influential event in the Gulf’s telecoms sector, in partnership with Morocco’s Digital Development Agency. This occasion will propel the industry further up the ladder to sit at the major players’ table. In African society, telecommunications already play a significant role. For instance, Kenya’s M-Pesa is an SMS-based money transfer service. Each year, it transfers more than 8.8 billion USD, or 40% of the nation’s GDP. Furthermore, young entrepreneurs and startups are now flourishing in Africa. All kinds of startups are making it through and succeeding at the regional and even global levels in African nations.
Critical for the Future
The success of this sector is imperative for the continent’s success as a whole. In African society, telecommunications already play a significant role. For instance, Kenya’s M-Pesa is an SMS-based money transfer service that transfers more than 8.8 billion USD or 40% of the nation’s GDP. This industry has established a closed system of development and innovation. An inclusive information society that incorporates digital technology into all facets of life is made possible by these telecom advancements (i.e., transport, communication, health, energy, etc.).
One key parameter shakes the industry.
Supply Chain Disruption and Delayed Deliveries
Supply chain issues are concerns for all executives across the board. In fact, Supply chain disruption, from manufacturing to global logistics, impact all facets of the telecoms industry. Considering the continued high demand for products, continuing in the same manner is no longer practical, especially given the rising energy cost. The aftermath of the pandemic, the conflict in Ukraine, and the energy crisis have therefore played a large part in the disruption of supply chains. While the worst supply chain disruptions of recent years are beginning to subside, other problems are still persisting and new ones are emerging that could shape 2023. These include:
- A slowdown in global trade growth from 6.0% in 2021 and 3.2% in 2022 to just 2.7% in 2023, according to the International Monetary Fund.
- Continued high energy prices that the World Bank says will be 50% above their five-year average through to 2024
- Weather events (i.e., hurricanes, floods, and droughts) are increasingly disrupting global supply chains
South Africa: The Heart of Digitalization
as of 2023, some significant energy projects will take steps in the right direction to add more power generation capacity. This move will increase the possibility of increased supplies to power domestic industries and households and ease cross-border transfers. The large Redstone concentrated solar power (CSP) plant in South Africa is nearly finished. It is part of a large pipeline of hydroelectric, solar, and wind projects seeing renewable installed capacity accelerate.
Furthermore, South African mining ventures, among others, could receive more attention. This potential is tied to Western-based mining companies and commodity traders increasingly shunning Russian supplies of copper, iron ore, manganese, uranium, among other products.
These two aspects of the South African trade are going to boost the country’s economy.
While there are still many setbacks on the horizon, there is hope that the coming years will be brighter and more prosperous. The outlook for 2023 for Africa is cautiously hopeful as there are still many factors swinging reality either way. South Africa is long regarded as a digitalization hub and the main source of resourceful applications of new technologies and innovations. As a result, it will lead the continent into a new and better digital age.
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