How fast internet adoption could propel Tanzania’s economic growth

Summary

  • If effectively adopted and rolled out, the technology would result in the creation of more digital entrepreneurs, commonly known in the technology sphere

Dar es Salaam. The adoption of 5G technology offers Tanzania and other African countries the potential to transform their economies through the fourth industrial revolution (4IR), experts say.

Those who spoke to The Citizen said the adoption could have a positive impact on the continent’s economy, saying that if properly adopted and implemented, it will provide businesses and individuals with the necessary infrastructure to effectively participate in the global workforce.

It would revolutionise the way Tanzanians and Africans in general conduct e-commerce and the way they deliver health and education services.

If effectively adopted and rolled out, the technology would result in the creation of more digital entrepreneurs, commonly known in the technology sphere as ‘technopreneurs’ and innovation in the Micro, Small and Medium Enterprises (MSME) spheres.

In fact, when he graced the launch of Vodacom’s 5G technology in September this year, the minister for Information, Communication and Information Technology, Mr Nape Nnauye, said the internet speed of up to 400 megabits per second (Mbps) would give Tanzanians the power to transform lives and help the country achieve Sustainable Development Goals (SDGs) targets in areas such as health, agriculture, energy, logistics, and many more.

‘I call on entrepreneurs, businesses, innovators, and ministries to tap into the 5G network and transform this nation,” Mr Nnauye said.

The emerging technologies of the 4IR that would be fully complemented by the network include artificial intelligence, the Internet of Things, Big Data and/or Data Science, 3D printing, blockchain technologies, neuro-technologies, genetic modifications, drones, autonomous vehicles, and machine vision, among others.

“The biggest thing 5G presents is the faster speed of accessing data, especially in businesses. Right now we are in a situation where the data business is big and it’s moving from being a luxury to being a necessity for businesses and also individuals,” a tech entrepreneur and founder of My Elimu, Mr Given Edward, told The Citizen.

He said that with its easy integration with the internet of things, the technology allows innovators to easily and effectively innovate.


Rapidly expanding

Tanzania is one of the ten countries in Africa that have adopted the technology, available data shows.

Data compiled by Ecofin Agency (an information agency specialising in public management and the African economy) show that in sub-Saharan Africa, 5G adoption has been growing rapidly since 2018.

It states that as of September 15, this year, twelve telecom operators in ten markets were already marketing mobile services backed by ultra-high-speed technology.

This means that the adoption rate was faster than earlier forecasts by several equipment manufacturers and specialised firms.

For instance, last year, the GSM Association (GSMA) indicated that the number of 5G connections would reach 35 million by 2025, representing three percent of the number of mobile connections in the Sub-Saharan African region.

This was probably why in “The Mobile Economy 2022” report, the Association revised its estimates to 38 million 5G connections in January this year, representing four percent of the number of mobile connections in the region.


Boost for growth

According to the GSMA, last year alone, mobile technologies and services generated around eight percent of the GDP across Sub-Saharan Africa, a contribution that amounted to almost $140 billion in economic value added.

The mobile ecosystem also supported more than 3.2 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with $16 billion raised through taxes on the sector, the reports say.

With more than 61 million people, Tanzania has 58.1 million total telecom subscriptions, according to the Tanzania Communication Regulatory Authority (TCRA).

Internet subscriptions have reached 31.1 million as of September this year.

The increase in data use, propelled by the rise in the number of subscribers, could scale up the digital economy in Tanzania, and 5G technology will further improve digital entrepreneurship and innovation, especially for MSMEs that are seeking to enter and/or are in the online market, according to technology enthusiast and chief executive officer of Sahara Ventures, Mr Jumanne Mtambalike.

There has also been a significant uptick in consumer e-commerce activity, fuelled by the Covid- 19 pandemic, where online shopping and online retail sales, including business-to-business sales, have increased substantially.

“With 5G, innovative network technologies enable service providers to introduce new services in areas of e-commerce, online learning, remote health care, and industrial and manufacturing processes,” said Mr Mtambalike. The availability of 5G devices at affordable prices will be crucial for the adoption of the technology in the country.

This is especially true given that the sluggish uptake of 4G in Tanzania and across the region is, in large part, attributable to the high cost of devices relative to average income levels.

“However, our government has shown promise in supporting internet penetration and bridging Tanzania’s digital divide. Investing locally to ensure these devices are available at affordable prices is now a challenge for the public and private sectors,” he said.


5G investments in Tanzania

In recent financial results for the period ended September 30, 2022, Vodacom Tanzania revealed that it had developed 63 5G sites across the country.

In the report, Vodacom’s managing director, Mr Philip Besiimire, stated that in the first half of the year, the company invested Sh74.9 billion in capex to support business growth and broadband coverage obligations, saying the capex was directed towards network coverage, including 159 new 4G sites and 63 initial 5G sites.