A Report by Ecobank has cited the high cost of data across the continent as a stumbling block to digital innovation in Sub-Saharan Africa (SSA). The report which was released this month highlights the rapid growth of mobile phone technology in Africa but also emphasises on the high cost of internet connectivity on the continent.
In July 2017, a hashtag, #DataMustFall, went wild in South Africa spreading like a wildfire on Twitter. South Africans were fed up with the inability of their Government and Mobile Network Operators (MNOs) to reduce the data prices in the rainbow nation, which ranks as the seventh most expensive in Sub Sahara Africa.
Though unlike before, most people in Sub Sahara Africa now have access to mobile phone and internet connectivity, however, the high fee charged by Mobile Network Operators on the continent makes the cost of data very expensive for most Africans.
Average Cost of 1gb
Although, the cost of 1gb of data varies on the continent; but the painful fact that Africa has the most expensive mobile data in the world, both in real and income-relative terms is a fait accompli.
The report indicates that Nigeria has one of the cheapest mobile data in Africa with $2.76 per 1 gigabyte. The most affordable mobile data can be found in East Africa. The average cost for 1gb in Ethiopia, Tanzania, Burundi, Kenya and Rwanda lies below Africa’s relatively expensive median of US$7.04. Equatorial Guinea’s average cost of $35.47 is Africa’s most expensive cost for 1gb of data while the cheapest data in Africa can be bought in Mozambique for just $2.08.
Cost of 1gb to income
The average cost of data compared to monthly income (relative to Gross National Income) in Africa is 4.1%. It is significantly lower in some countries like South Africa (0.9%). Also, African mineral-rich countries boast of the lowest percentages – less than 2%. They include Namibia, Botswana, Nigeria, Gabon, Angola and South Africa.
Countries with the most expensive cost of 1gb of data relative to their income include Zimbabwe, DRC and Liberia, with an average of 14-16%. Those with percentages that double the African average are Sierra Leone, Chad, Burundi and Malawi averaging 6-8%. Nevertheless, the data in these nations is highly distorted due to the wide income inequality in their oil economies.
Why is data still expensive?
Differences in the mobile data cost in Sub-Saharan Africa is inversely proportional to the level of competition in the telecommunication sector of each country. Many African Governments built their own state-owned MNOs and created a monopoly in the mobile sector when mobile telecom infrastructure was first built in the late 1990s and early 2000s. Many of them still exist in several countries with one or two other competitors. The monopoly enjoyed by these state-owned MNOs is the major reason why data cost is high in these countries.
Expensive data prolong digital divide
Mobile phone penetration is expected to grow faster in Sub-Saharan Africa than any other region in the world from 2005 to 2015, with a rising year on year rate. Today, an average African can afford an internet-enabled phone. This can be attributed to the fact that the prices of mobile phones are reducing on the continent while Africa’s purchasing power is rising.
However, the accessibility of these Africans to digital services widely varies, as it depends on their country. The ability of Sub-Saharan African countries to spread digital innovation like mobile banking, pay-as-you-go solar energy etc depends on the cost and access to mobile data in those countries.
One of the reasons why two of Africa’s leading tech hubs – Nigeria and Kenya – are dominating fintech market on the continent is the accessibility of their citizens to relative cheap mobile data. Consumers in these countries can buy mobile data more regularly than those in costlier countries like Zimbabwe, DRC etc; where mobile data is higher than 13% of their monthly GNI per capita.
How to reduce data cost
- Countries with the lowest data cost are those with three or more MNOs, since there is an inverse relationship between the number of mobile operators in a country and the average price of 1gb of data. In a nutshell, the more the MNOs, the cheaper the data.
- Licensing fees for new mobile operators should be reduced by African Governments, so as to encourage new MNOs.
- The government should encourage competition among operators, particularly in countries with only two or three MNOs, so as to reduce data price.
- African MNOs need to have access to reasonably-priced and reliable radio spectrum, to enable them to provide affordable internet coverage, which will lead to lesser data prices.
- African governments should endeavour to reduce double taxation in the mobile sector. Chad, for example has 13 different taxes for mobile operators. Little wonder, Chad has the fourth most expensive data price on the continent.
- The recently introduced of social media tax in Uganda and Benin could hinder digitalisation by preventing low-income earners from accessing the internet.
- Fintechs and technical giants like Facebook, Google, Yahoo, etc could help bridge the digital gap on the continent. For example, Google recently announced plans to set up free Wi-Fi in some selected locations in Nigeria.
Economic effects of expensive data
- Apart from preventing the consumers from accessing the internet regularly, since it is unaffordable; it prolongs digital exclusion on the continent.
- SMEs, which make up 90% of African businesses, cannot provide their services and information digitally to meet their needs. A global survey of 4,800 SMEs found that those that make use of internet grow twice as fast as those that do not.
Nigeria in the mix
According to the National Bureau of Statistics (NBS) Telecoms Data for the second quarter of 2018, Nigeria’s active internet subscribers in Q2 2018 were 103,514,997. This represents a quarter on quarter subscribers’ base growth of 2.57% from the total of 100,923,580 that subscribed for the internet in the first quarter of 2018.
The report further added that the highest share of total internet subscribers in Q2 2018 belonged to MTN with 39,191,085 active subscribers, followed by Glo with active 27,206,445 subscribers. Airtel and 9mobile are third and fourth with 27,206,445 and 10,807,862 internet subscribers respectively. A total of 362,271 subscribed for internet through other operators in the second quarter of 2018.
Bus fare paid by Nigerian commuters increased by 68.8% in October 2020
The average fare paid by Nigerian commuters for a bus journey intra-city spiked by 68.82% from N190.86 recorded in October 2019 to N322.22 in October 2020
The average fare paid by Nigerian commuters for bus journey within the city spiked by 68.82% year-on-year from N190.86 recorded in October 2019 to N322.22 in October 2020. This was contained in the transport fare watch report, released by the National Bureau of Statistics (NBS).
The Transport fare watch report for the month of October 2020 covered the following categories namely: bus journey within the city per drop constant route; bus journey intercity, state route, charge per person; air fare charge for specified routes single journey; journey by motorcycle (Okada) per drop; and waterway passenger transport.
According to the report, the average fare paid by Nigerians for a bus journey within a city also increased by 4.03% when compared to N309.73 recorded in September 2020. Meanwhile, States with the highest bus journey fare within the city were Zamfara (N585.34), Bauchi (N504.78), and Cross River (N431.04); while States with the lowest bus journey fare within the city were Abia (N192.11), Kebbi (N205.47), and Borno (N208.15).
- Average fare paid by commuters for bus journey intercity increased by 9.25% to N2,209.84 as against N2,022.7 recorded in September 2020, while it increased by 35% compared to N1,636.86 recorded in the corresponding month of 2019.
- States with the highest bus journey fare intercity were Abuja FCT (N4,376.09), Lagos (N3,073.41), and Sokoto (N3,055.12); while States with the lowest bus journey fare intercity were Bayelsa (N1,473.67), Enugu (N1,560.00), and Bauchi (N1,560.49).
- Average fare paid by commuters for journey by motorcycle per drop increased by 3.88% month-on-month and by 115.50% year-on-year to stand at N265.41 in October 2020 from N255.51 and N123.16 respectively.
- States with the highest journey fare for motorcycle per drop were Niger (N1,476.40), Kogi (N372.45), and Rivers (N352.47); while states with the lowest journey fare for motorcycle per drop were Adamawa (N78.49), Katsina (N106.20), and Kebbi (N135.75).
- In terms of air travel, the average fare paid by passengers for specified routes single journey decreased by -1.70% when compared to N36,884.59 recorded in September 2020. It however increased by 18.42% (year-on-year) to stand at N36,256.08 as against N30,615.43 recorded in October 2019.
- States with the highest air fare were Anambra (N38,500.00), Cross River (N38,460.00), Jigawa (N38,250.00); while States with the lowest air fare were Akwa Ibom (N32,750.00), Sokoto (N33,250.00), and Gombe (N34,800.00).
What you should know
Nairametrics reported in October that the average fare paid by commuters for a journey by motorcycle per drop, more than doubled in September 2020 when compared to the corresponding month in 2019, increasing by 111.11% to stand at N255.51 in the month.
The persistent increase in the prices of transport fares across the country is a resultant effect of the Covid-19 pandemic, which necessitated drivers and transporters to reduce the number of commuters they carry at a time.
This is in line with the health measures implemented by the Federal government to help curb the spread of the corona virus in the country.
Explore Data on the Nairametrics Research Website
PIB and Electoral Amendment Bill pass second reading in House of Reps
The Petroleum Industry Bill (PIB) and the Electoral Act Amendment Bill has passed second reading in the House of Representatives.
This was disclosed by Channels TV on Tuesday after both bills were addressed by Lawmakers for the second time during plenary.
On the Petroleum Industry Bill
Rep leader, Alhassan Doguwa, said the PIB has been in the pipeline since the firth assembly and hopes the 9th Assembly would be able to pass the bill.
Chairman of the House Committee on Upstream Petroleum, Musa Adar, stated that Nigeria needs the PIB, as it does not have the luxury to be irresponsible with resources. Citing the effects of the pandemic on the economy, he added that Nigeria’s needs a mature oil industry that will maximize productivity and compete with other crude oil and gas exporting nations in the continent.
Minority Leader, Ndudi Elumelu, said the PIB is a necessity, as the world is going green and Nigeria needs to maximize its oil and gas sector, and also explore other options.
“The world is looking to go green in less than 20 years and it makes it pertinent for Nigeria to gain maximally from the oil sector and look to explore other oil products before petroleum goes obsolete as a commodity,” he said.
(READ MORE: The new PIB may scrap DPR, PPRA, others)
On the Electoral Act Amendment Bill
The purpose of the Bill is to regulate the Electoral process across Federal and Local government levels, in order to give it more transparency.
The bill was sponsored by Rep. Aishatu Dukku (APC-Gombe). She added that the bill is necessary to fix Nigeria’s flawed electoral system.
“This amendment has become necessary because of the flaws observed in our electoral system. It’s no longer news that our electoral experiences since 1999 show a strong correlation between an efficient and effective electoral legal framework and the conduct of free, fair, and credible elections.
“In fact, amendments of our electoral laws were long identified as priority legislation by the National Assembly, because of the need to consolidate on the gains of our democratic achievements and to also address the lacuna identified in the electoral legal framework.
“A typical example is the case of the Kogi Governorship election in 2016, where a leading candidate died after the commencement of polls, but before the declaration of results.
“In addition to this are concerns that the legal framework on certain issues should be well settled ahead of the 2023 elections, such as the use of technological devices like the card reader and electronic voting system.
“Also, criteria for substitution of candidates, disclosure of the source of funds contributed to political parties, replacement of lost or destroyed permanent voters card, the penalty for the possession of fake voters’ card, dates for conducting primary elections, shall not be earlier than 150 days and not later than 120 days before the date of the election, etc.
“The bill, therefore, seeks to address many loopholes in our electoral system by way of amending over 300 clauses (including new provisions) of the Electoral Act 2010,” she said.
What you should know
Nairametrics reported last week that the Minister of State for Petroleum Resources, Timipreye Sylva said the Petroleum Industry Bill (PIB) may be passed into law by the first quarter of 2021.
“There is no better way of diversifying the country’s economy than through a well-developed oil and gas industry, particularly with the huge gas resources in Nigeria. So, PIB will be the most credible attempt towards a holistic diversification of the Nigerian economy,” he added.
House of Representative Speaker, Femi Gbajabiamila, also disclosed that the House would ensure that it passes the Petroleum Industry Bill within the next six months or probably less.
Budget proposal review of MDAs is a legislative right – Femi Gbajabiamila
Gbajabiamila has stated that the budget review on MDAs conducted by the House of Assembly is a right of the National Assembly.
The Speaker of the House of Representatives, Femi Gbajabiamila, stated that the budget review on MDAs conducted by the House of Assembly is a right of the National Assembly. He added that the House of Assembly has the constitutional right to ask questions on MDA budgets.