FROM AN EXTERNAL POINT OF VIEW IT APPEARS THAT THERE IS ONLY LIMITED ADOPTION OF TECHNOLOGIES ACROSS AFRICA . WHAT ARE THE MAIN AREAS OF TECHNOLOGY ADOPTION ACROSS AFRICA ?
EDITOR ’ S QUESTION
FROM AN EXTERNAL POINT OF VIEW IT APPEARS THAT THERE IS ONLY LIMITED ADOPTION OF TECHNOLOGIES ACROSS AFRICA . WHAT ARE THE MAIN AREAS OF TECHNOLOGY ADOPTION ACROSS AFRICA ?
Q & A with McKinsey Global Institute
The accelerating scope , scale , and economic impact of technology is a major transformative force around the world . Faster penetration of the internet and mobile phones offers Africa a huge opportunity to enhance growth and productivity ; Africa ’ s penetration of smartphones is expected to reach 50 % by 2020 , from only 18 % in 2015 . Previous McKinsey Global Institute research estimated that the internet could drive 10 % of Africa ’ s GDP by 2025 .
This trend is already transforming a number of sectors , including banking , retail , power , health care , and education . Electronic payments are sweeping across the region and changing the business landscape . East Africa is already a global leader in mobile payments . E-commerce in Africa is growing quickly — revenue has doubled in Nigeria each year since 2010 .
In South Africa , smart metering is taking off and is expected to modernise consumer payments in the power sector , while ambulance services are using mobile application technology to improve response times greatly . The African Leadership University , launched in Mauritius in 2015 , is using technology to reduce teaching costs and deliver e-learning , creating a replicable model for expansion across the continent .
IT technologies are essentially deployed in urban areas for businesses and consumers . What is the state of urbanisation in Africa ? Africa is the world ’ s fastest urbanising region . Over the next decade , an additional 187 million Africans will live in cities — equivalent to ten cities the size of Cairo , Africa ’ s largest metropolitan area . Between 2015 and 2045 , an average of 24 million additional people are projected to live in cities each year , compared with 11 million in India and nine million in China . Urbanisation has a strong correlation with the rate of real GDP growth , because productivity in cities is more than double that in the countryside : Africa ’ s urban GDP per person was $ 8,200 in 2015 , compared with $ 3,300 in rural areas .
Higher productivity translates into higher incomes , and cities offer better access to infrastructure , education , and new markets , resulting in more rapid growth in consumption by households and businesses . The challenge will be to cope with the stresses of rapid urban expansion , including provision of housing and services .
Manufacturing is usually the engine of business and drives a significant amount of demand for IT business applications . What is the state of manufacturing across Africa ? Africa contains 60 % of the world ’ s unutilised but potentially available cropland , as well as the world ’ s largest reserves of vanadium , diamonds , manganese , phosphate , platinum-group metals , cobalt , aluminum , chromium , and gold . It is responsible for 10 % of global exports of oil and gas , 9 % of copper , and 5 % of iron ore . Even at recent low prices for such commodities , a significant share of African production continues to be cost competitive , putting the resources sector in a strong position for when demand and , eventually investment recover .
Capturing these opportunities will be challenging . Governments will need to improve their investment attractiveness in a weaker environment , while companies must review their approach to community engagement so that they have the support of local communities as well as their license to operate from regulators .
Source : McKinsey Global Institute ’ s new report Lions on the move II : Realising the potential of Africa ’ s economies .
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