Africa: A Key ICT Investment Destination
20 Aug 2014
The recent U.S.-Africa Leaders Summit hosted by President Obama generated up to $37 billion in new investment for Africa in sectors including infrastructure, electricity, public health, and security, and has created a new wave of international interest and participation in the emergence of a new, more prosperous Africa. As well as seeking direct answers to the continent's social, economic, and commercial challenges, the three-day event held in Washington D.C. earlier this month saw 50 African leaders secure substantive investments in the field of ICT.
Mark Walker, regional director for Sub-Saharan Africa at International Data Corporation (IDC) believes that many of the initiatives and opportunities presented at the Summit are strongly dependent on the rollout of innovative technologies across the continent. "Just as the provision of communication infrastructure and services has accelerated the development of economic opportunity across Africa, so too will 3rd Platform technologies such as mobile, cloud, big data, and social media drive the next wave of development in Africa," says Walker. "While these technologies represent the foundation for innovation, the key to success will be successfully developing relevant answers to Africa's requirements in the government, energy, finance, and commercial sectors, while simultaneously ensuring benefits to both local and American partners."
Six of the ten fastest growing world economies are African, and over the last decade the average income in the continent has increased by 30%. Despite the huge size of the market, IDC expects overall IT spending in Africa to expand at a very healthy compound annual growth rate (CAGR) of 6.3% over the next five years to total $33.4 billion in 2018. That represents a 36% increase from today's figure. The region's biggest market, South Africa, is set to grow at a rate of 5.7%, while Kenya and Nigeria will both show growth of more than 7%. The banking and finance, telecommunications, energy, healthcare, and transportation sectors will be responsible for the lion's share of this IT investment growth.
IDC's analysts believe that this growth opportunity will be characterized by the following underlying themes:
- Organizations across sectors will scale their investments in basic IT infrastructure.
- Strong demand will be seen for technologies that help organizations to automate processes, manage complexity, and drive down costs.
- Strong demand will emerge for IT infrastructure and application management.
- High demand will exist for mobility solutions.
- There will be a strong drive to improve network and data connectivity in key markets.
"Africa has played host to massive growth in mobile phone usage in recent years and IDC expects mobile technologies to catalyze investment, with mobile enterprise applications becoming a leading priority," says Walker. "Governments will also invest in fiber-optic cables, public services, content, and governance and compliance oversight to ensure the security of transactions online."
In the last five years, various countries in Africa have rolled out fiber-optic infrastructure, and IDC expects to see a shift in the focus from undersea cable to the rollout of terrestrial fiber. And in further developments, telecom service providers are expected to expand their current fiber infrastructures to offer last-mile, high-end connectivity to enterprises.
Countries such as Kenya, Ghana, Rwanda, Tanzania, South Africa, and Nigeria, in cooperation with international developmental agencies, academia, and ICT vendors, have made considerable investments in ICT infrastructure and IDC expects this to benefit local startups that have had problems sustaining and running successful businesses. The commitments made in Washington earlier this month will only serve to enhance the effectiveness of such development initiatives.
References: REMARKS BY PRESIDENT OBAMA AT PRESS CONFERENCE AFTER U.S.-AFRICA LEADERS SUMMIT, State Department, 07 August 2014.
ContactFor more information, contact:
+971 4 3912741