From Policy Reform to Device Affordability: GSMA’s Roadmap to Reducing Africa’s Usage Gap

The Digital Economy’s Role in Growth

Wamola emphasized that the digital economy is already a significant contributor to South Africa’s GDP, accounting for 4-5%, or approximately 200 billion South African Rand, while supporting 30,000 direct and 160,000 indirect jobs. However, a substantial usage gap persists—44% of South Africa’s population has yet to adopt mobile internet, despite being within coverage areas. Across Sub-Saharan Africa, this figure climbs to a staggering 710 million people.

The report highlights that bridging this gap could unlock exponential value, enabling South Africa to reduce its usage gap to 30% by 2030 if key policy recommendations are implemented. This underscores the transformative potential of the digital economy, not just as an economic driver but as a catalyst for societal inclusion and improved public service delivery.

Policy and Investment Recommendations

Wamola outlined critical policy levers to enable digital growth:

1. Infrastructure Modernization:
   Private capital must be mobilized to build not just current-generation infrastructure but also the networks of the future, such as 5G. This involves investments in technologies like cloud computing, AI, and big data, which are essential for energy-efficient and scalable systems.
2. Regulatory Modernization:
   The existing Electronic Communications Act, over 20 years old, needs urgent reform to reflect today’s digital realities. Streamlined licensing and regulatory processes could foster investment and incentivize innovation.
3. Critical Infrastructure Designation:
   Telecommunications infrastructure should be classified as critical national infrastructure. This would enable cost reductions, such as in energy pricing and right-of-way fees for fiber deployment, and impose stricter penalties to combat vandalism.
4. Device Affordability:
   With custom and excise duties driving up device prices by as much as 64% in Africa, Wamola stressed the need for policies to lower costs. Affordable devices paired with accessible data are key to unlocking the potential of rural and low-income populations.
5. Collaborative Implementation:
   National initiatives like SA Connect and the Presidential Commission on the Fourth Industrial Revolution require resource-backed execution. Public-private partnerships (PPPs) are crucial for driving these strategies forward and ensuring tangible outcomes.

Striking a Balance: Immediate Needs vs. Future Growth

When asked about the prioritization of 5G deployment versus improving existing 4G infrastructure, Wamola called for a balanced approach. The future demands investment in emerging technologies like 5G, AI, and IoT, which can significantly enhance productivity and efficiency. At the same time, leveraging existing 4G infrastructure to close the digital divide among current users remains critical.

The GSMA study revealed that 60% of online users in Sub-Saharan Africa rely on 3G technology, which is less energy-efficient and limits the scope of digital services. Encouraging a shift to 4G through affordable devices and accessible services is a pragmatic step toward digital inclusion.

Lessons from Global Peers

Wamola also pointed out South Africa’s higher capital expenditure per user compared to other G20 and BRICS nations. This raises questions about efficiency and scalability. She highlighted India’s Digital India initiative as a benchmark, demonstrating how large-scale digital adoption can transform economies. Learning from such models could help South Africa and other African nations maximize the economic and social returns on digital investments.

Angela Wamola’s insights reinforced the imperative for Africa to adopt a collaborative, forward-thinking approach to digital transformation. From modernizing policies to prioritizing infrastructure investments and fostering affordability, her recommendations offer a clear path to reducing the usage gap and driving inclusive economic growth.

The report not only serves as a roadmap for South Africa but also provides valuable lessons for the entire continent, emphasizing that the digital economy is not just an opportunity—it is a necessity. As Wamola aptly put it, “The future is bright for Africa, but only if we work together to embrace it.”