Standard Bank Group says smartphone penetration is key to harness Africa’s digital potential

0
715
  • In Zim Econet bemoaned low smartphone penetration
  • In sub-Saharan Africa over 400M people still don’t have access to mobile internet
  • Mobile has played a key role in breaking down ecosystem and interoperability challenges

HARARE – Stanbic Bank Zimbabwe’s parent company, Standard Bank Group, says for increased digitisation to happen on the African continent there will be need to be an increase in smartphone adoption.

Following the outbreak of COVID-19 there has been a notable increase in web traffic driven by telecom meetings and other activities where professionals have resorted to working from home and businesses digitising their offerings as part of the new norm to cope through the impact of the virus.

This according to the continent’s largest bank by assets, has laid foundation for growth in telecoms infrastructure and investment in Africa, however, demand for broadband surged in more established markets such as South Africa and Kenya.

Research shows that in sub-Saharan Africa (SSA), although mobile broadband networks cover more than 70% of the population, over 400 million people across the landscape still don’t have access to mobile internet. According to analyst GSMA Intelligence, the SSA mobile phone market is expected to reach a compound annual growth rate of 4.6% compared with 3% globally between 2019 and 2025.

In Zimbabwe, smartphone penetration is still lagging. Recently, the country’s leading telecommunications company, Econet Wireless Zimbabwe Limited (Econet) bemoaned a relatively low smartphone penetration in the country saying that it is slowing down the adoption of digital services in the market.

Presenting the Group’s financial highlights, Econet Group chairman, James Myers said the country’s smartphone penetration stands at 52% compared to regional peers like Nigeria (80 percent), Kenya (80 percent) and South Africa (90 percent).

In Africa there is a need to close the digital divide.

According to market analyst International Data Corporation (IDC), smartphone sales in Africa made up 6.6% of the global smartphone market in 2019, compared with 6.3% in 2018 and 5.9% in 2017. The continent is expected to make up 7.1% of the worldwide market by 2023. South Africa made up 15.4% of the total African smartphone market during 2019, followed by Egypt at 11.6% and Nigeria at 11.1%.

Nina Triantis, Head of Telecoms and Media for Standard Bank Group highlighted that mobile has played a key role in breaking down ecosystem and interoperability challenges.

“In the past moving money between platforms was impossible, but now subscribers can move money between different mobile operators seamlessly,” she said adding that “We are also seeing the emergence of players such as MFS Africa, moving money across borders.”

Mobile has already played a key role in facilitating digital financial services with many mobile operators building their systems around being able to transact on a mobile phone. In Kenya M-Pesa’s mobile offering has evolved into a fully-fledged financial services offering allowing for mobile payments, savings products, and lending while in Zimbabwe, EcoCash has expanded to become the country’s default banking service.

It is a key driver of financial inclusion and providing financial services to the segment of the population that cannot access a traditional banking account.

Tech enabled sectors such as eCommerce have over the years seen strong growth while fintechs see significant increases in online, digital, and mobile transactions and the migration to cashless accelerates across the continent.

Banks have also been incubating and investing in fintechs. Two such examples for Standard Bank include the platform OneFarm in Uganda as well as investment in fintech Nomanini in South Africa in 2019.

Nina Triantis said opportunities exist for Africa to accelerate its digital journey and the investments seen in the recent months, demonstrate that business is ready to take advantage of them.

“With the likes of MasterCard and Visa entering markets focused on financial inclusion we will see an acceleration of card penetration in Africa as they advance, form more partnerships, and continue to invest in start-ups as they have.

“We will see more intersections between banks and mobile operators as well as increased partnerships in the future.  The platform business model will also become more prevalent as banks, telecom operators and other players look to provide a plethora of services in one place,” she said.

Equity Axis News

LEAVE A REPLY

Please enter your comment!
Please enter your name here