Unit 2 Macro: Mobile Phones and African Economic Growth

The increasing access to and usage of mobile phones is said by many development economists to be having a significant impact on growth and development in many African countries. A 2005 London Business School study reported recently in the Guardian found that for every additional 10 mobile phones per 100 people in a developing country, GDP rises by 0.5%.

The chart below tracks mobile phone ownership per 100 of the population for Sub Saharan Africa and also South Africa and Kenya

Data from Timetric.

To view this graph, please install Adobe Flash Player.

World Bank from Timetric

The Grameen Foundation has said that “Over the past decade, the mobile phone has become a powerful tool for providing poor people with access to information and services that can improve their lives and their livelihoods.”

Despite structural problems such as uneven mobile network coverage especially in the deepest rural areas, a deep divide in mobile ownership by gender together with the frequent absence of regular electricity supplies for charging devices, there are many ways in which businesses and individuals in many African countries are innovating to find economic and social benefits from widespread adoption of mobile phones.

Coffee farmers in Ethopia are using mobile phones to track in real time the world prices of the coffee beans they grow giving more power in the market to judge when it is best to bring their produce to coffee auctions and get the best available price. Farmers can also utilise mobile phone apps to get vital information on seasonal weather reports, planting advice and also disease diagnostics to protect their crops.

In rural Rwanda, health-care workers use celluar phones to monitor pregnant women (where the number of maternal deaths is high). mPedigree in Ghana offers a text service to verify prescribed medications (e.g., malaria treatments)

Kenya’s mobile banking system (M-Pesa) has been called the world’s most innovative and it lets Kenyans pay bills, send remittances, purchase goods and airtime, move funds among accounts, and even take out and pay back loans for entrepreneurial ventures. Uganda’s largest telecom company, MTN Uganda, created its own version of a banking system built on mobile phones - MobileMoney - and it now have nearly two million members.

Suggested further reading

Guardian: Africa’s mobile economic revolution (July 2011)

Grameen Foundation - Empowering the Poor

Women & Mobile: A Global Opportunity

Ken Banks talks mobile phones in Africa - click here

Africa’s Mobile Revolution from Jenni Parker on Vimeo.