How to finance the digital revolution in Africa? From deploying high-speed networks to building the Silicon Savannah
Corum - Montpellier
The digitisation of the African economy is a veritable groundswell, and internet use keeps on growing thanks to the development of 3G/4G networks, a decrease in the price of smartphones and the emergence of innovative services. But massive financing is needed for the digital revolution to truly take hold, both for deploying the needed infrastructure and creating an ecosystem for digital innovation. And the current landscape is changing, with the introduction of new financing schemes (PPP, sharing), the emergence of venture capital and funding for start-ups, not to mention the fact that veteran technological giants are staking out their claims on the innovation front.
At a time when 4G networks are being deployed and FTTH/B is emerging, the need for infrastructure financing is an especially sensitive topic. And, in addition to financing from traditional sources like the World Bank and the ADB, public players are turning to new funding schemes: public-private partnerships, functional separation, the Chinese model. In the private sector, operators are working to improve their return on investment by pooling their resources through cooperative schemes, our by outsourcing a portion of their network. So where does the issue of network financing stand today? What are the financing methods and innovations that can help improve RoI? What are the overriding trends for both public and private sector players?
The digital ecosystem in Africa is still taking shape: it has become a reality in Nigeria, Kenya and South Africa, but only just emerging in French-speaking and Eastern Africa. There is no shortage of investors: governments, aware of the historic, and not to be missed, opportunity that the 3rd industrial revolution represents, providing either direct financing or hosting hackathons. In the private sector camp, telcos are supporting start-ups by acting as incubators, while tech giants like Facebook, Google, Microsoft, SAP and IBM are also investing in tech hubs. And the venture capital sector is beginning to open up on the continent.