Mobile internet technology thus carries the potential to empower and enable, all while meaningfully expanding the economy. Studies have found that a “developing country with an average of 10 more mobile phones per 100 population has 0.59 percent higher GDP growth than an otherwise identical country.” Mobile technology decentralizes the engine of progress into the hands of the participants that it enables to enter the marketplace. In 2010, the number of mobile phone subscribers was 350 million. However, as neighbours step forth across the chasm of the digital divide that persisted for years, many African countries are now leaping forth to catch up.
Central to the emergence of these informal markets, as well as more sustainable internal transfers of money within local economies that thereby benefit the national economy, is the provision of services of which many Africans were never able to have before. Millions across Africa are considered the “un-bankable,” people whose earnings are so low or present such a risk to banks that it is impossible for them to open up accounts and begin to work and establish lines of credit to build their wealth. Yet, it also presents security challenges as money is always physically in the market rather than in controlled spaces within the banking network. Money and opportunity could then “bleed” from the system as it was stolen or not retained long enough for an individual to establish purchasing power and a mechanism by which to safeguard their money. The British Department for International Development and private developers partnered in an attempt to offer a solution for this with the launch of M-PESA in Kenya.9
First launched in 2013, M-PESA aimed to develop a system of credits and mobile money transfer grounded in an SMS based system to move from user to user. Now, at least 70% of the population in Kenya uses M-PESA.10 The transfer of money between customers and businesses or family members is now secure, convenient, and cost-effect. Moreover, there are more than 110,000 vendors across the country who use M-PESA based exchange as a means of payment, including all major vital services and vendors and everyday life and participation in the local market, such as shopkeepers, banks, and gas stations. This grew from an original pool size of 23,000 in 2010.1 Resultingly, the 70% of the population that now uses mobile money in Kenya on the M-PESA platform are more “fully integrated” into the marketplace.13 With lower barriers for participation, it is then easier for these new participants in the marketplace to innovate and begin to build their own businesses while simultaneously building a more sustainable local market.
Yet, use across the continent is uneven. South Africa is the only country in the region where at least half of the population is online with 59%, higher than the global average, online. Yet, in a recent study conducted of the 17 leading countries in sub-Saharan Africa, home to more than 300 million people, there was incontrovertible evidence of the integral role that mobile technological adoption and use is improving the lives across the continent. These countries have seen growth rates per capita averaging at 3.2% a year, which equates to overall GDP growth outpacing 5%.5 To the everyday citizen of this country, this means a 50% increase in average incomes in the last 13 years.Integral to this is the adoption of new mobile phone technologies and the creation of new industries and occupations. Source