Following a decade of economic expansion, Africa is going digital. Internet usage is growing rapidly and could add US$300bn a year to the continent’s GDP by 2025 – while transforming key sectors like agriculture, retail and health.
This is the message from a new report by McKinsey, Lions go digital: The internet’s transformative potential in Africa.
The report examines the progress and potential of the internet in 14 economies that together make up 90% of Africa’s GDP. It projects that the continued growth of the internet could produce a leap forward in the continent’s economic and social development in the coming decade.
Below are some of the report’s main findings:
- The internet is a catalyst for economic growth: in China, India and Brazil it has contributed more than 10% of total GDP growth over the past five years. Africa is catching up quickly.
- Mobile voice has already had an outsized effect in Africa as it connected people who previously had little or no access to telecommunications. The internet could produce a similar, or greater, multiplier effect.
- Only 16% of Africa’s 1bn people are currently online, but that share is rising. More than 720m Africans have mobile phones, 167m already use the internet, and 52m are on Facebook.
- Governments have placed internet-driven growth firmly on the agenda, with several countries pursuing ambitious plans to expand high-speed internet access to most of their populations.
- There is a growing wave of innovation as entrepreneurs and large corporations alike launch web-based ventures, from e-commerce sites to mobile health technologies.
- Africa could generate e-commerce sales of $75bn a year by 2025 – sparking an e-tailing revolution that gives African consumers much wider choice at lower prices.
- The internet could unlock significant productivity gains in African business, government and social services.
- To realise the internet’s full potential, governments and the private sector will need to invest in increasing access, developing a workforce with ICT skills and improving digital literacy.
Read How we made it in Africa over the coming days for more insight from McKinsey’s report.