Words by John Bamidele, founder of?gbc.ng, a leading digital news portal on gaming in Africa. Well versed and experienced in Africa gaming, John has been a journalist for two decades working in Print and electronic media, writing on Sport, Marketing, Marketing Communication, Tourism and Politics

GSM Association (GSMA) recently released its reports and it is not gloom for the mobile economy in sub-Saharan Africa despite the effects of COVID-19 pandemic. The pandemic has led to the shutdown of global economies for at least four months and this resulted in global loss of job with recession hitting some economies. No one saw it coming, but COVID-19 pandemic has forced a new world normal down our throats. One of the positives of the pandemic highlights the need for a developed digital landscape in Africa; this we believe will reduce direct human interactions. The shut down experienced by many government institutions during the height of the pandemic and physical distancing measures further highlighted the importance of connectivity and a structured digital economy.

The iGaming industry in Africa will be positively affected by the new report and the paradigm shift from bricks and mortar to igaming will be achieved sooner than expected judging from the report. As it stands, iGaming revenue in Africa stand at $18 billion which represents half of the total gaming revenue, meaning retail is still king when talking about gaming in Africa. Sub-Saharan Africa has to join the rest of the world, talking in terms of igaming because; foreign investors are more likely to put their money in igaming. The latest report by GSM Association will spur investors to look in the way of Africa when thinking of an offshore investment; however there are other factors that are critical to investments. Regulation is a key factor when such decisions are to be made. This germane issue will be thoroughly discussed in my subsequent write up but for now, let’s concentrate fully on the GSMA reports.

The need to connect 800 million people, who remain unconnected to mobile internet and in essence the digital economy demonstrates the need to get more people in Africa connected. COVID-19 pandemic notwithstanding, telecommunication companies rose to the occasion to provide connectivity in sub-Saharan Africa. The GSMA report states that mobile service subscriptions will hit 500 million by 2021. According to the report, 45 percent of Africa’s total population is connected to the mobile market meaning 477 million people in Africa are subscribed to mobile services. GSMA report also predict that mobile service subscriptions will hit the half-billion mark as early as 2021 and also double to hit one billion subscriptions in 2024. With this, GSMA predicts at that rate, Africa will achieve 50 percent subscriber penetration in 2025.

The report also highlighted the rapid rise in the adoption of Smartphones in the region. According to the report, 50 percent of the total connections in Africa are from smartphones this year. The availability of cheaper smartphones in the region is as a result of a financing model that allows low-income earners pay on installment basis. The report also predicts that the region of Africa will achieve smartphones adoption rate of 65 percent in 2025 with smartphones connections of 678 million in 2025.

The increased adoption of mobile services will increase mobile service contribution to Africa’s GDP by $184 billion dollars. This is due to the fact that more countries in the region will continue to benefit from improved productivity and efficiency. The report points to the contributions of mobile technologies to the GDP of the region with the sector adding an economic value of more than $155 million. The mobile industry according to the report also accounted about 3.8 million direct and indirect jobs in 2019. Additionally, the mobile industry has added value in terms of driving social impact in the region. Mobile operators have collaborated with governments and organizations to ameliorate the effect of COVID-19 on the citizens in the regions. This it was able to achieve through discounts on tariffs to free access to educational and health websites. Mobile technology service providers have also been at the forefront of providing succor and alleviations for most vulnerable in society.

Furthermore, the GSMA report projects that about half a billion people will be using mobile internet services in sub-Saharan Africa. Nigeria and Ethiopia will account for one third of internet users by 2025. Nigeria according to the report will account for about 101 million users, Ethiopia will account for 42 million mobile internet users, South Africa will be home to 39 million mobile internet subscribers while the Democratic Republic of Congo will also be home to 36 million mobile internet subscribers. Kenya, Tanzania and Uganda come next with 29 million, 23 million and 20 million subscribers respectively. The rest of sub-Saharan Africa will account for the remaining 185 million mobile internet subscribers.

Consumption of mobile data according to the report will increase from 16MB per subscriber per month in 2020 to 7.1 GB per subscriber per month in 2025. Growing smartphone adoption in the region as well as increased availability of more affordable high-speed services will drive the growth in data consumption. Spurred on by a growing adoption of mobile internet services and smartphones coupled with a growing youth population and local content availability, the media and entertainment(M&E) sector in Africa is showing signs of digital disruption that is showing growth in the sector.

Revenue outlook remains strong in Africa despite the effect of COVID-19 pandemic according to the GSMA report. Although the pandemic has had a strong impact on the spending power of sub-Saharan Africans, the pandemic has however had a mixed effect on the mobile economy. It report that the lockdown spiked the demand for data consumption and also underlined the need for connectivity, thereby driving up revenue for telcos. Telcos also played supportive role in their response to COVID-19 pandemic in the region by providing discounts, data waivers for health sites and other transactions fee waivers, meaning the telcos also lost money.

A quick check at the number reveals that the revenue generated in the sector though dipped in 2020 to $43.9 billion from $44.3 billion it made in 2019, it is expected to go back to $44.3 in 2021, rise to $45.2 billion in 2022 and further reach $46.2 billion, $47.4 billion and $48.7 billion in 2023, 2024 and 2025 respectively. The rising adoption of 4G devices and mobile money were cited as reasons for the revenue growth in the medium to long-term outlook of the mobile economy.

Aside from connectivity, another integral service that is propelling the growth of mobile economy in sub-Saharan Africa according to the report is digital payment and other financial services. Many telecoms operators in Africa now provide mobile money service which gives them an opportunity to diversify operations and increase revenue. The East Africa market remains the most matured mobile money market accounting for more than half of the registered mobile money accounts in sub-Saharan Africa. The report reveals that East Africa accounts for 53 percent of the total registered mobile money accounts in Africa, followed by West Africa with 35 percent, while Central Africa and Southern Africa come a distant third and fourth accounting for 10 percent and 2 percent respectively. E-commerce provides another bountiful opportunity for telcos to innovate with digital payments especially due to changing buyer behavior occasioned by the COVID-19 pandemic.

According to a survey conducted by Vida, as many as 71 percent respondents in Nigeria stated that they bought groceries online for the first time due to the COVID-19 pandemic. In South Africa, sixty-four percent of respondents said the same thing. Jumia, an e-commerce giant in Africa also noted that sellers on their platform reported an increase in sales because of the pandemic which is a strong indication of a strong alternative to traditional markets. Invariably, as e-commerce and online shopping gain more momentum in the sub-Saharan African region, telcos and other mobile operators will have the opportunity of providing digital payment services as an alternative to cash payment.

Finally, this projected growth is predicated on operators investing in network infrastructure in the region. The report states that mobile operators plan to invest $53 billion in infrastructure between now and 2025 notwithstanding the adverse effects of the COVID-19 pandemic. With this report, igaming is set to experience another exponential growth in sub-Saharan Africa in the next five years.

GSM Association (GSMA) recently released its reports and it is not gloom for the mobile economy in sub-Saharan Africa despite the effects of COVID-19 pandemic. The pandemic has led to the shutdown of global economies for at least four months and this resulted in global loss of job with recession hitting some economies. No one saw it coming, but COVID-19 pandemic has forced a new world normal down our throats. One of the positives of the pandemic highlights the need for a developed digital landscape in Africa; this we believe will reduce direct human interactions. The shut down experienced by many government institutions during the height of the pandemic and physical distancing measures further highlighted the importance of connectivity and a structured digital economy.

About SiGMA Europe Virtual Expo:

SiGMA Group is excited to announce the launch of their November event,?SiGMA Europe Virtual Expo. The online event, which runs from the 24th to 25th, will focus on the European gaming and tech marketplace.

For more information about how to?sponsor?this event please contact?Hamza and to explore speaking opportunities get in touch with Jeremy. To register for the expo click?here.