BUSINESS NIGERIA

Nigeria Wallstreet Journal

The Sub-Saharan African Economy is Projected to Gain $11 Billion From 5G Technology by 2030

In its latest report titled “The Mobile Economy Sub-Saharan Africa 2023,” the GSMA, a global organization dedicated to unifying the mobile ecosystem, forecasts that 5G technology will contribute $11 billion to the Sub-Saharan African economy by 2030.

As of September 2023, the momentum for 5G technology in Sub-Saharan Africa is steadily increasing, with 297 operators worldwide launching mobile 5G services. In the region, 27 operators across 16 African markets have already introduced commercial mobile 5G services, and many others are planning to follow suit.

GSMA report reveals that 5G will account for more than 6% of the overall economic im­pact of mobile connections in sub-Saharan Africa, as much of the technology benefit will materialize over the period to 2030, as some countries are in the early stages of deployment and 5G economic benefits will increase as the technology starts to achieve scale and wide­spread adoption.


In recent years, the adoption of 4G technology in Africa has experienced a surge, driven in part by the increasing demand for faster internet speeds, particularly among younger consumers. Concurrently, momentum for 5G technology is also gaining traction, with deployments observed in urban areas and industrial locations where there is a greater demand for advanced connectivity solutions.

Projections indicate that 5G adoption will accelerate further in the latter half of this decade, reaching a penetration rate of 17% by 2030. Sub-Saharan Africa is expected to boast 226 million 5G connections by that year, representing a significant uptick in adoption.

Nigeria and South Africa are poised to lead the charge, accounting for nearly half of these 5G connections. Nevertheless, the growth trajectory of 5G in the region will be characterized by a steady pace, as a considerable portion of the customer base continues its migration to 4G networks. As a result of extensive 4G network buildout and grow­ing 5G network deployments in Sub-Saharan Africa, capex will be on an upward trajectory over the next few years.

Due to the extensive buildout of 4G networks and the expanding deployment of 5G networks in Sub-Saharan Africa, capital expenditure (capex) is projected to increase in the coming years. Governments and enterprises across the region are leveraging this technology to address significant challenges, positioning it as a crucial player in driving progress.

The anticipated benefits of 5G are expected to extend across various sectors of the Sub-Saharan African economy, contingent upon their integration of 5G use cases into their operations. By 2030, approximately 32% of these benefits are forecasted to originate from the manufacturing sector, fueled by applications like smart factories, smart cities, and smart grids, while 29% are expected from the services sector.

Despite the growing momentum, the approach to 5G in the region must consider the current connectivity landscape and unique market features that could impact the rollout and adoption of the technology. Therefore, players in the region’s 5G network ecosystem must devise strategies to deliver cost-effective and efficient 5G networks, striking a balance between investment and value creation.

This challenge arises as 3G remains the predominant technology in Sub-Saharan Africa, comprising 55% of total connections in 2022. In contrast, 4G is already dominant in other regions, indicating varying levels of network and customer readiness for the transition to 4G.

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