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Africa’s booming mobile internet market a draw for big names

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Only about 27 per cent of Africans regularly use the internet but this is growing fast, according to US-based Alphabet, the holding company for brands such as Google and YouTube.

Mobile internet penetration accounts for about a quarter of all internet activity, but will continue to grow to 41 per cent in 2020 with 720 million people, says the global mobile communications body GSMA. Many of these new users will be connecting to the Web via smartphones.

Almost half of all Africans now subscribe to a mobile service with Egypt, Nigeria and South Africa making up the bulk of the users, GSMA says.

So big has mobile become that it now contributes about 7 per cent of the continent’s GDP, and will exceed US$200 billion by the end of this decade.

A study by the mobile technology firm Ericsson is even more optimistic – it says more than 1 billion Africans will be connected within five years, mostly using smart devices. Personal computers will play an almost negligible role in Web access, it says.

Social media is one of the biggest drivers of internet use. Platforms such as Facebook, Twitter and WhatsApp are commonly used. So much so, in fact, that some governments restrict their use for fear they will be used for political activism. Last year, the BBC reported that Ethiopia blocked social media services during a state of emergency to contain protests.

Political activists of all stripes have taken to social media with alacrity. In South Africa critics of the president Jacob Zuma have used these platforms to organise protests and attack his supporters. Mr Zuma’s backers, meanwhile, have carried out their own campaign in his defence.

Internet companies have had to adapt to the often poor bandwidth in many African countries. The South African provider Telkom has still to live down a 2009 test during which a carrier pigeon with a flashdrive with four gigabytes of data delivered the information to a destination 60 kilometres away, faster than the same amount of data could be downloaded.

In 2015 Facebook unboxed Facebook Lite, an app for parts of the world where internet speeds are slow. The Lite is less than one megabyte compared with standard apps in excess of 100 megabytes.

Still, getting unconnected Africans online has some way to go. One of the issues yet to be overcome is that 15 countries out of 54 are landlocked. Coastal countries are increasingly being connected via undersea cables, but for those surrounded by neighbours this option does not exist.

The World Bank says landlocked countries pay an average $232 more per internet user a month for fixed broadband access than those living in coastal areas. The disparity is so great that Somalia has better connectivity than Zambia and Lesotho, in spite of being a failed state.

While the citizens of Ghana on the west coast pay as little as $7 a month for internet, those of Chad in the north and which is surrounded by its neighbours, must pay $3,000, the World Bank says. One attempt to overcome this was made by Facebook when it decided to place a satellite in orbit to provide connectivity. Unfortunately, the SpaceX rocket that was supposed to deliver it blew up shortly after launch late last year. It is unclear when a replacement will be available.

In the meantime, Facebook and Google are also working on other methods, including drones and balloons. Given the potential size of the market for advertising these efforts are likely to gather momentum in the coming years.

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Africa

DP World says Djibouti incident could hurt Africa investment

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DUBAI (Reuters) – Port operator DP World said on Thursday that Djibouti’s decision to seize control of a terminal project could hurt African efforts to attract investment.

The Dubai state-owned port operator is facing twin political challenges in Africa.

Djibouti abruptly ended its contract to run the Doraleh Container Terminal last month and Somalia’s parliament voted this week to ban the company.

DP World has called the Djibouti move illegal and said it had begun proceedings before the London Court of International Arbitration, which last year cleared the company of all charges of misconduct over the concession.

“Africa needs infrastructure investments and if countries can change their law [to take assets then this] is going to basically make it more difficult to attract investment,” Chairman Sultan Ahmed bin Sulayem told a news conference in Dubai.
DP World reported 14.9 percent rise in 2017 profit to $1.18 billion profit and said that it would invest $1.4 billion across its global portfolio including in Berbera in Somaliland. [L8N1QX0F2]

It is developing a port in Berbera in partnership with the governments of Somaliland and Ethiopia. It is also developing a greenfield free trade zone in the breakaway region.

Bin Sulayem said he was not concerned by the vote in Somalia’s parliament to ban DP World from the country, which the parliament said nullified their Somaliland contract.

It is unclear how Somalia’s federal government could enforce the ban given Somaliland’s semi-autonomous status.

Europe, the Middle East and Africa accounted for about 42 percent of the cargo DP World handled in 2017.

Reporting by Alexander Cornwell; editing by Jason Neely

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INTERVIEW: Somalia gears towards improving its monetary policies

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CGTN — Somalia’s central government imposed a five percent sales tax this month as part of efforts to win billions of dollars in international debt relief. This was followed by protests in Mogadishu’s main market by traders opposed to the tax. CGTN’s Abdulaziz Billow sat down with the country’s minister of finance who shed more light on the country’s monetary policies

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Somalia Tax Argument From Both Sides: Bakara Traders vs The Government

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Somalia’s busiest and largest open-air market in Mogadishu has been closed for the past two days.

Business owners in Bakara market are protesting over a five percent tax imposed by the government, in an effort to pay back some of its international debt.

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