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Connectivity to underpin intra-African economic integration

 

Connectivity to underpin intra-African economic integration

Market research predicts digitally reinforced economic growth in Africa.

Africa will be more connected than ever in 2019, a new AT Kearney report says, citing that digital connectivity will play a crucial role in strengthening intra-African economic integration.

The view aligns with several indicators that are to emerge in 2019 according to Ovum's regional market research and databases.

The technology research and advisory firm notes in its Africa Digital Outlook 2019 that while basic connectivity remains insufficient for many people on the continent, service providers will likely continue to expand the coverage and capacity of their broadband networks to take advantage of reported growth in revenues, users, and usage from data access.

It adds that most major African service providers also reported good growth in mobile financial services. It says providers plan to expand their services offerings and businesses as growth is recorded in other key digital service segments like digital media, IOT and enterprise ICT services.

On the other hand, the EU continues to work with Africa based on the premise that the continent's digital transformation has been moving swiftly despite the continent's internet penetration being pegged at 32% of the population in 2017, according to the ITU.

After its joint meeting with the AU last month, the EU notes that the number of active tech hubs across Africa has grown by over 50% with 442 hubs now active on the continent - while the number of mobile broadband connections is expected to reach half a billion by 2020.

Unlike in 2016 when mobile technologies and services generated US$110-billion in economic value within Sub-Saharan Africa (7.7% of GDP), the European bloc believes revenues from this sector will rise to US$142-billion (8.6% of GDP) by 2020, with the mobile sector alone supporting more than the 3.5 million jobs it had in 2016.

According to the AT Kearney report, some emerging markets like Zambia have come under serious economic and financial pressure as a result of foreign-denominated debt and currency depreciations.

However, improvements are anticipated once the continent's economic giants South Africa and Nigeria commit to the African Continental Free Trade Area (AfCFTA) agreement.

The report also foresees that Bitcoin would lead the consolidation and maturation of the global crypto market due to the US–China trade war that could escalate if there is no progress made on key issues.

This expected gain may reflect on the predicted wider interconnectedness of Africa even as crypto uptake seems to be growing in parts of the continent. Peer-to-peer exchange, Paxful, recently claimed that African Bitcoin traders now make up 41% of all its new users in 2018.

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