Hormuud Telecoms

Telecoms is the key to growing African economies post-Covid

14 August 2020 | Guest writer

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Ahmed Mohamud Yuusuf, CEO Hormuud Telecoms, suggests three avenues of change for African telecoms in a post-Covid world

The Covid-19 pandemic has made it plain that even some of the world’s wealthiest and most technologically advanced societies were poorly prepared and ill-equipped for a real crisis. Around the world, governments scrambled to protect both their citizens and their economies, knowing that, in many cases, to protect one was to put the other at risk. And now, as that initial response has given way to serious consideration and scrutiny of the decisions taken, world leaders are asking themselves how, in an increasingly uncertain global landscape, they can better prepare themselves for future emergencies.

What has taken place in recent months in East Africa may furnish those world leaders, and African leaders in particular, with a clue. In Somalia, for instance, telecommunications infrastructure and an increasingly cashless commercial life has allowed society to function largely as it did before the outbreak. Market traders, for instance, have been able to carry out their work online without any trouble.

It is because of this infrastructure that the government has been able to communicate accurate public health messages to millions of people, including those living in the most far-flung rural communities. And it is also because of this infrastructure and the mobile money services it enables that most of the population has been able to observe social distancing while continuing to do business. There have been serious concerns about misinformation and conspiracy theories disseminated across social media in Africa. And as we have seen in so many countries, governments that have acted too late, or ignored public health advice, have paid for it in human lives.

I am very proud of the part that Hormuud Telecom, in partnership with the UNDP, has played in this. Our mobile money services are free to use, and in times of crisis it is crucial to keep the economic moving. Other African mobile services providers could learn from our example: people must not be disincentivised from using mobile money when it is more important than ever that money is circulating throughout the system.

And it would not have been possible if it were not for the popularity and prevalence of mobile money in Somalia. More than 75% of people over the age of 16 use mobile money services, and we have noticed a marked rise in mobile money transactions throughout the crisis. It is not true to say that Somalia is an entirely cashless economy, but it is nearing that point.

Other African governments can learn from the example Somalia has set. Indeed, telecoms can play a central role in supporting and rebuilding African economies once the crisis is over. Small businesses using mobile money services enjoy lower costs, greater security against theft and fraud, and easy access to other markets.

And though Somalia has been ravaged by civil war, sectarian violence and poverty—and in part because of this—it has become a world-leader in this area. In urban centres, mobile money penetration is higher than 80%, and even in rural areas, penetration stands at 55%. The widespread adoption of technology in this way has proved to be a great leveller for Somali society. It has brought about and encouraged competition, which has led to economic development. And the knock-on effects of this have been job creation, a steep rise in local investment and the narrowing of the gender gap in financial life.

This is an opportunity. Covid-19 has exposed vulnerabilities in African telecoms and digital infrastructure, including vast swathes of the continent where the use of mobile money is impossible. We must look at telecommunications as an essential public service that is a foundational part of any modern African economy and demands far more attention.

This entails three main avenues of activity, beginning with intelligent spending. Governments have to prioritise heavy investment in the development and expansion of telecommunications and digital infrastructure. They can form public-private partnerships to launch more infrastructural projects. And they must also reconsider their approach to information and communications technology in a wider way. Aid agencies, foreign governments and foreign investors, too, must think about how they can divert money towards the development of ICT.

Governments must begin the process of integrating their existing telecommunications infrastructure with its public health counterparts. As the Somalia example shows, telecommunications can play a starring role in a national response to almost any natural crisis, not just by enabling the dissemination of important public health messages or by keeping the economy moving, but by allowing for the transfer of remittances by the diaspora.

And top-down policies will only take a country so far. What is unique about Somalia is the extent of its digital uptake, and how culturally embedded digital behaviour is in our society. Even the most vulnerable in our society use mobile money services and understand their value. What is needed now, across the continent, is a fundamental reconsideration of how we can deliver digital education and provide digital infrastructure to the next wave of African youth.

Citizens must therefore learn first-hand how ICT can improve their lives and what opportunities it provides. It is no exaggeration to say that ICT can have a life-changing effect on those who are digitally excluded.

What we know for sure is that COVID-19 is not the first infectious disease to sweep across Africa, and nor will it be the last. If the continent’s leaders wish not just to rebuild in the wake of the pandemic, but to grow their economies and put themselves in a position to withstand whatever the future may throw at them, they must look to telecommunications infrastructure and commit to improving it.