Closing Africa’s digital divide

Africa is faced with a significant challenge - the digital infrastructure gap that is hindering the growth of its fastest emerging economies. Lack of digital infrastructure goes beyond just the inability to work remotely; it affects access to crucial services such as public health and civil services. With around 4.5 million people lacking internet access and penetration rates as low as 18 percent, it is evident that a large portion of the African population is missing out on the opportunities that come with connectivity. However, addressing this issue could open up a pathway for economic growth and development. Ashwin West, Head of Sustainable Infrastructure Investments at BlueOrchard - a member of the Schroders Group, highlighted the importance of providing digital infrastructure to enable individuals to access services, move up the economic ladder, and ultimately contribute to the economy. He emphasized that digital infrastructure has the potential to help emerging market economies leapfrog developed economies by providing access to tools such as mobile money, which can enhance financial inclusion and open doors to various services. One of the key challenges in bridging the digital divide is the significant capital investment required. Historically, mobile network operators have focused on urban areas due to higher customer spending power, leaving rural communities underserved. However, innovative technologies are emerging that offer cost-effective solutions for extending connectivity to these remote areas. By utilizing simpler structures that operate on solar power and battery storage, these technologies can provide 2G or 3G connectivity to rural communities at a fraction of the cost. When it comes to funding these initiatives, a mix of private capital in the form of equity and debt is playing a crucial role. Private companies are investing in innovative technologies and rolling out infrastructure in underserved markets. BlueOrchard, for instance, is actively involved in providing debt to projects aimed at expanding digital infrastructure in countries like Nigeria, Cameroon, and the Democratic Republic of Congo. West mentioned a partnership with a Nordic investor to support a project in West and Central Africa, signaling a concerted effort to address the digital infrastructure gap in the region. By injecting capital into businesses focused on extending connectivity to rural areas, stakeholders are paving the way for economic empowerment and growth in these underserved communities. As Africa continues to strive for economic development and inclusion, bridging the digital divide remains a critical step. By leveraging innovative technologies, private investments, and strategic partnerships, the continent can unlock new opportunities for its population. The journey towards a digitally inclusive Africa is not without its challenges, but with concerted efforts and collaborative initiatives, the vision of a connected and thriving continent is within reach.