Africa narrows digital divide

The World Bank Information and Communication for Development 2006 and the World Economic Forum Global Information Technology 2005-2006 report all underline that Africa’s Economic development depends on a country’s overall progress in a country’s Information and Communications Technology (ICT) and that in recent years Africa’s focus has switched to ICT. Citing that without refocusing on ICT in an increasingly technological world, both economies and companies are likely to suffer, the reports also note that firms in Africa that have realigned themselves to ICT have shown a capacity to grow faster, are more productive and profitable than African companies which have refused to latch on to the concept. Sales growth was noted to be 3.4-percent higher, and enabled value-addition to the tune of US$3400 per employee more than companies not using ICT, according to the World Bank study. The study reveals that developing country firms, especially those in Africa, that preferred the use of e-mails to communicate with customers and suppliers had substantially higher profits than companies that were failing or flat out refusing to exploit ICT. It is further noted almost all profit and growth indicators were positively correlated with email and internet usage and that firms exploiting ICT effectively have profit rates which average five-percentage points higher than those which are not into ICT. Not only profits were noted to be higher according to the World Bank report. Infact, investment rates and productivity levels were notched farther up, as the ICT-intensive firms proved to possess faster growth rates than their technologically-deficient counterparts. The reports also note that developing countries as a whole have caught up with the industrialised world in telecommunications over the past 25-years, coming from a situation in 1980 were they accounted for only 20-percent of the world’s fixed and mobile telephones, to about 60-percent currently. While the proportion of subscribers to total population did not even double in the ten years to 1980, it “quintupled from 27 to 129 per 1000 people” in the 1990s and in the five years running up to 2005, it is estimated to have trebled again to reach 400 per 1000 people in 2005.

April 2006
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