July 29, 2020

FACTORS IMPACTING THE DEVELOPMENT OF INFRASTRUCTURE IN AFRICA

Without a doubt, Africa is one of the world’s fastest-growing economic hubs. Crucial to this accelerated rate of development is the ability to meet the demand for key infrastructure to support our ever-changing digital world.

Kenya, in particular, was put on the fast track to catch up with more advanced nations on the continent. This is evidenced in a World Bank economic update, which reported that Kenya has seen its Information and Communications Technology (ICT) sector grow at an average of 10.8% annually since 2016. While this is hugely encouraging news for Kenyans, we still have some way to go before we can consider ourselves ready for a tech-savvy future.

There are several factors which impact our ongoing positive trajectory of infrastructure development:

1. Fixed-line networks

In 2019, Kenya invested US$59 million in the Djibouti Africa Regional Express (DARE) submarine fibre optic cable system, which reached the shores of Mombasa during March this year, is the fifth regional submarine fibre optic system Kenya is connected to alongside SEACOM and three others. In addition, terrestrial fibre networks have continued to expand, offering more connectivity options and better network redundancy. However, these remain underutilised due to high prices and a failure to establish an enabling environment.

2. Mobile network coverage

Telecommunications has continued to register positive growth. As high-bandwidth Internet infrastructure has become more widely available, mobile video traffic has begun to increase substantially. Consequently, the increase in mobile network coverage has led to a decline in fixed-line networks related to voice calling. Alternative solutions need to be considered to ensure a stable Internet connection throughout Kenya to bridge the rural and urban digital development divide.

3. Physical infrastructure

Greater economic activity, enhanced efficiency and increased competitiveness are hampered by inadequate transport, communication, water, and power infrastructure. “It is crucial for us to develop robust and reliable power supply, transport networks and communication systems for us to ensure ongoing and uninterrupted connectivity,” says Tonny Tugee, MD at SEACOM East Africa. According to an article published by Deloitte on Addressing Africa’s Infrastructure Challenges, it is estimated that about US$93-billion is needed annually over the next decade to overhaul sub-Saharan African infrastructure.

About two-thirds or $60-billion of that is needed for entirely new infrastructure and $30-billion for the maintenance of existing infrastructure. Only about $25-billion annually is being spent on capital expenditure, leaving a substantial shortfall that has to be financed.

4. Developing the economy

The economic climate of Kenya will determine access to the tools needed to build the relevant infrastructure. This translates into exciting opportunities for global investors. Africa is at the start of a 20 to 30-year infrastructure boom. The key to unlocking Kenya lies with our global network of exports, which we need to be utilising optimally to ensure a stable digital and physical infrastructure.

SEACOM is well-positioned as a connectivity partner to deliver tailored, reliable and stable connectivity with speed. In a world increasingly dependent on the Internet to deliver business, SEACOM is the connectivity partner that African businesses can rely on.