Can mobile broadband reduce poverty in Africa?

Can mobile broadband reduce poverty in Africa?

The GSMA and the World Bank have developed what they call an innovative, ground-breaking study on the impact of mobile broadband on welfare and poverty reduction. It uses data from Nigeria – the largest mobile market and economy in Africa – and its findings are fascinating.

The recently launched report, called The poverty reduction effects of mobile broadband in Africa: evidence from Nigeria, shows that having at least one year of mobile broadband coverage increases total consumption by about six percent. This estimate reaches eight percent after two years of coverage.

More importantly perhaps, the report says that the proportion of households below the extreme poverty line ($1.90 per day) drops by about four percentage points after one year of gaining mobile broadband coverage – and by about seven percentage points after two or more years of coverage.

This, the report adds, corresponds to moving approximately 2.5 million people out of extreme poverty. The study also shows that rural households in particular stand to gain more than urban households from such benefits in relative terms.

These findings, the authors say, call for policymakers, international organisations and other decision makers to put the development of digital infrastructure at the heart of strategies to reduce poverty and promote inclusive growth in Africa.

A number of policy lessons are proposed based on the report’s findings. Firstly, there are still almost 600 million people that do not live within reach of either a 3G or 4G network – around half of them in Africa. Most of them live in rural and remote areas. Bridging the digital divide between rural and urban areas and providing universal mobile broadband coverage can, the report’s authors suggest, be an effective instrument to alleviate inequality and reduce poverty.

In addition the report argues that policies to address the usage gap across socioeconomic groups are necessary to ensure everyone benefits from digital technologies. In Nigeria, as in many parts of the world, inequalities persist in access to mobile broadband services by gender, location and education, as well as between people with and without disabilities.

The report also suggests that expansion of digital infrastructure and access to the internet can not only help create more jobs but can also reduce transaction costs for people finding jobs – and can improve productivity.

Many other findings and recommendations can be found in the report, which is available now for free download at the GSMA website.

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