*Google estimates Africa’s internet economy to hit $180b by 2025
*contribution to GDP estimated to reach $712b by 2050
By Prince Osuagwu
Despite the favourable statistics on Nigeria’s broadband penetration, Nigeria’s internet development is still poor. Cost, service delivery and lack of dependable, efficient ICT infrastructure and snail speed bandwidth are recurrent problems every internet user goes through in Nigeria.
However, the biggest problem is the cost of running such infrastructures where they exist, due to the power problem that has bedeviled developmental or technological growth for a long time. The internet providers run their existing infrastructure basically on self generated power .
This has led to delivering internet services across the country only on commercial considerations.
There are huge terabytes of bandwidth in the shores of Lagos waters, yet getting them to the hinterlands for last mile distribution is a difficult task due to the cost.
However, there is a genuine reason the federal government of Nigeria should invest heavily in last mile escalation of broadband distribution and internet development.
A new report released by Google and the International Finance Corporation (IFC) recently, estimates that Africa’s Internet economy has the potential to reach 5.2 percent of the continent’s gross domestic product (GDP) by 2025, contributing nearly $180 billion to its economy.
The report also projected that potential contribution could reach $712 billion by 2050, meaning that countries in Africa with strong internet governance and development will see more of this estimated GDP windfall.
The report said that driving this growth is a combination of increased access to faster and better quality Internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa’s commitment to creating the world’s largest single market under the African Continental Free Trade Area.
Currently, Africa is home to 700,000 developers and venture capital funding for startups has increased year-on-year for the past five years, with a record $2.02 billion in equity funding raised in 2019, according to Partech Ventures Africa.
Managing Director, Executive Vice President and Chief Operating Officer of IFC, Stephanie von Friedeburg said: “The digital economy can and should change the course of Africa’s history. This is an opportune moment to tap into the power of the continent’s tech startups for much-needed solutions to increase access to education, healthcare, and finance, and ensure a more resilient recovery, making Africa a world leader in digital innovation and beyond”
Friedeburg said digital startups in Africa are driving innovation in fast-growing sectors, including fintech, healthtech, media and entertainment, e-commerce, e-mobility, and e-logistics, contributing to Africa’s growing Internet gross domestic product (iGDP) ,defined as the Internet’s contribution to the GDP.
Meanwhile, Director, Google Africa, Nitin Gajria, said: “Google and IFC have created this report to highlight the role the digital startup sector is playing and other factors driving the continent’s growth, in order to showcase and support the opportunities the continent presents,”
Also an analysis within the report, conducted by Accenture, found that in 2020, the continent’s iGDP may contribute approximately $115 billion to Africa’s $2.554 trillion GDP (4.5% of total GDP). This is up from $99.7 billion (3.9% of total GDP) in 2019, with the potential to grow as the continent’s economies develop.
Investments in infrastructure, consumption of digital services, public and private investment, and new government policies and regulations will play an important role in supporting Africa’s digital growth. The report notes that investment in digital skills will also need to increase in order to help drive technology usage and continue to grow the continent’s talent pool.