macroafricaintel | Mobile phones, internet and jobs in Africa (1)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

The nexus between internet adoption and infrastructure, foreign direct investment, financial development, economic growth and job creation in African countries and elsewhere is well established. The internet is a net job creator. For every one job lost to the internet, about three new jobs are created. The internet is either creating new jobs, transforming existing jobs, or enabling outsourcing of jobs to cheaper but more productive locations (see Table 1). It is also making some jobs redundant.

Access to the internet via mobile phones is having a huge economic impact around the world. Because of the ubiquity of mobile phones and their relative affordability, more and more citizens of poor countries are using the internet to avail themselves of the myriad opportunities on the global communication platform. Human capital development, ease of access to finance, robust infrastructure, and a conducive business environment underpin the job creation thesis of the internet, however.

Table 1: The effect of the internet on jobs
New jobs Transformed jobs Outsourced jobs Lost jobs
Related to the internet and ecosystem (e.g. engineers, networking specialists, mobile app developers, etc) Internet transforms work practices in existing jobs and requires learning new skills Internet allows outsourcing of jobs to specialised locations or workers with cost and productivity gains (e.g. offshoring) Internet allows replacement of tasks previously carried out by humans (e.g. online travel booking in place of travel agents)

Source: OECD & IDB (2016)

Small and medium-sized enterprises (SMEs) record increases in productivity of at least 10 percent from using the internet. Research also finds that SMEs that are using web technologies aggressively, grow and export twice as much as their counterparts which do not. It has also been found that 75 percent of the internet’s impact are in traditional industries. Apart from boosting legacy industries, fast internet infrastructure is also creating new ones. Social media platforms like Youtube and Instagram are creating millionaires and billion dollar businesses. New industries are being created, business models are being disrupted and labour markets are being reconfigured.

Digital payments are already huge in many African countries. M-Pesa, a Kenyan mobile money service, is a prominent example. Africans also already trade and make purchases with cryptocurrencies like Bitcoin. Facebook is about to disrupt even this laudable progress in digital payments with its soon-to-be-launched digital currency called Libra. The internet is creating new ecosystems. New employment forms, like in the “gig economy”, are also emerging. Unsurprisingly, African governments are beginning to realise the potential of internet technology and its associated ecosystems for boosting economic growth, creating jobs and thus alleviating poverty. Interestingly, even for supposedly advanced spheres of information technology like artificial intelligence, Africa is increasingly seen as the new frontier.

Subsequent sections of the paper highlight the internet-driven opportunities, the factors driving them, and the challenges and constraints that weigh on them. The paper then concludes with recommendations on how Africans, their governments and key local and global stakeholders, can manage all these variables effectively and sustainably for economic growth and job creation.

Cheaper internet & smartphones underpin new job opportunities
According to the International Telecommunication Union (ITU), only about a quarter of Africans currently use the internet. While relatively low, it is twice the number of African internet users five years ago. With 76 percent of Africans currently having a mobile cellular phone subscription, the likelihood of greater internet use of about the same rate in the not too distant future seems feasible. It makes sense then that mobile phones are increasingly used as a means to deliver services. Mobile data remains relatively expensive, though (see Table 2).

Africans can now do most of their non-physical banking transactions online via their mobile phones. They are able to stream videos on Netflix, a streaming service. Online shopping is certainly now no longer a novelty in many African countries. African firms are also increasingly using the internet to improve their productivity. Adoption varies by country. Kenya is ahead of most in the use of the internet for managing inventory, online sales and purchases and marketing. Ghana and Zambia come second and third respectively. And this applies to both manufacturing and service firms.

Table 2: Average cost of 1GB of mobile data (2019)
India $0.26
Russia $0.91
Nigeria $2.22
United Kingdom $6.66
Canada $12.02
United States $12.37
Switzerland $20.22
Source: Forbes

Mobile telephony is engendering the formalisation of the informal economy in many African countries. Informal economic agents need to get documented and acquire some formal identification to secure mobile phone lines. With a mobile phone line, they are able to use mobile money for business transactions and remittances; thus increasing financial inclusion. Kenya and Uganda are prominent examples. Africans are increasingly able to do so because the cost of acquiring a smartphone and using the internet, though still expensive, is declining. In 2012-17, the average selling price of smartphones in Kenya, Nigeria and Tanzania declined by 44%, 35%, and 52% to US$118, US$121, and US$117 respectively.

Table 3: Smartphone adoption
  2018 2025
Sub-Saharan Africa 39% 66%
Emerging markets 56% 78%
South Asia 48% 75%

Source: GSMA

As shown in Table 3, smartphone adoption in sub-Saharan Africa, which was 39 percent in 2018, is expected to reach 66 percent by 2025. Still, while cheaper smartphones and increasingly less expensive internet access for social networking offer new and constantly evolving opportunities for Africans, a digital divide with developed countries clearly remains. For massive economic and jobs impact, more Africans have to use the internet.

And if that is to be the case, smartphones and mobile data have to become much cheaper. There are already several cheap smartphone initiatives in a number of African countries. In June 2019, Google announced it was building a subsea cable connecting Africa to Europe. Subsea cables carry 99 percent of the world’s internet data traffic. Facebook, another global tech firm, is working on a low-cost to free African internet access initiative of its own. So, in a couple of years, African internet data rates could become much cheaper as well.

Article was first published by the NTU-SBF Centre for African Studies at Nanyang Business School, Singapore. References are in the original article.

#Africa #Markets | 19 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks gain, dollar sags as Fed reinforces rate cut expectations
  • MSCI Asia-Pacific index up 0.3%, Nikkei gains 1%
  • Dovish views from Fed’s Williams cement rate cut expectations
  • US yields fall, gold hits 6-yr high on US rate cut prospect

Oil Markets

  • Oil rises after US Navy destroys Iranian drone
  • Brent up 1.3% at $62.75 (0100GMT)
  • WTI up 1.1% at $55.91

Precious metals

  • Gold hits 6-yr peak on US rate cut prospect, Middle East tensions
  • Spot gold down 0.2% at $1,442.71 (0117GMT)
  • US gold futures up 1% at $1,441.90/oz.

Grains

  • Corn faces biggest weekly drop in 2 yrs on cooler US weather
  • Most active CBOT wheat futures up 0.2% at $4.94-1/4 per bushel (0112GMT)
  • Most active corn futures down about 0.1% at $4.29-1/2 per bushel
  • Most active soy futures down 0.1% at $8.97-3/4 per bushel
  • Most active rice futures down 0.7% at $11.81 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Ghana central bank MPC decision [fcst. 15.0%, prev. 16.0%]
  • South Africa state capture inquiry resumes; Zuma to continue testimony
  • Kenya’s Kenyatta to commission Loiyangalani-Suswa power line
  • Kenya trade week 2019 in Nairobi; 15-21 Jul

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • UN demands release of abducted lawmaker and Haftar critic in eastern Libya
  • WHO flags ebola risk in Rwanda, but then withdraws its report
  • Libya’s Mitiga airport resumes air traffic, following an air strike
  • Sudan urged to ensure justice for raped women protesters
  • Zimbabwe state workers accept pay deal, avert strike
  • Ethiopia averts confrontation as party delays plan for new region
  • South African soldiers deployed in Cape Town to help fight gangs
  • 3 sentenced to death for Morocoo backpacker murders
  • Tanzania to buy new Airbus, Bombardier planes for national carrier
  • South Africa’s rand, bonds rally after central bank cuts rates
  • Sudan protesters take over square where Bashir challenged uprising
  • Africa Oil – Angolan clears as Nigeria programmes emerge
  • South Africa cuts rates but strikes cautious tone
  • IMF programme “positive” for Congo Republic’s lowly credit rating – Moody’s
  • Ivory Coast sells 1.6 mln T of cocoa export contracts by July 12 – CCC sources
  • South African central bank cuts rates by 25 bps
  • 2 killed in suicide bombing, 4 beheaded in Egypt’s N.Sinai, sources say
  • Eni officials tried to tamper with witness in Nigeria case
  • Uganda shilling little-changed, may weaken on energy demand
  • Renault and Nigeria’s Coscharis Group form partnership
  • Kenya shilling holds steady against the dollar
  • Madagascar vanilla crop quality suffers as thieves spark violence
  • Ebola patient suspected of going to Rwanda – report
  • World Bank contradicts Tanzania’s growth estimates
  • South Africa’s Liberty sees H1 earnings to rise

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 18 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Stocks wobble, bond yields fall on earnings woes, trade worries
  • All Wall St indexes down: Dow 0.4%, S&P500 0.7%, Nasdaq 0.5%
  • CSX tumbles on weak results, Netflix sinks in after-hour trading
  • Treasury yields slump; 10yr, 30yr shed over 7 bps each overnight
  • Precious metals in demand: gold gains over 1%, silver up 2.5%

Oil Markets

  • Crude futures fall after strong build in US oil products stocks
  • Brent down 0.2% at $63.51 a barrel (0044GMT)
  • WTI down 0.5% at $56.52

Grains

  • Soybeans fall to 9-day low as cooler weather expected
  • Most active CBOT soybean futures down 0.2% at $8.99 a bushel (0054GMT)
  • Most active corn futures down 0.5% at $4.39-1/2 a bushel
  • Most active wheat futures down 0.3% at $5.04 a bushel

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa central bank 3-day MPC meeting; decision day [fcst. 6.5%, prev. 6.75%]
  • Ghana central bank 3-day MPC meeting continues; decision on 22 Jul [fcst. 15.0%, prev. 16.0%]
  • 2nd Lake Chad Basin Governors Forum 2019 in Niamey, Niger; 16-18 Jul
  • Kenya trade week 2019 in Nairobi; 15-21 Jul
  • Day 2 of Source 21 COMESA international trade fair & high level business summit in Nairobi, Kenya (17-21 Jul); Kenyatta, Mauritius’ Vyapoory, Zambia’s Lungu, & Uganda’s Museveni opened yesterday

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • WHO sounds ebola alarm as risks intensify
  • Ethiopian city braces for protests as activists promise to declare new region
  • Africa Oil – Large Nigerian overhang looms ahead of programmes
  • South Africa’s rand softer ahead of rate decision, stocks slide
  • Acacia seeks stay of international arbitration against Tanzania
  • Power-short Zimbabwe removes barriers to solar energy expansion
  • South African corruption inquiry adjourns after Zuma’s lawyers say questioning unfair
  • Egypt says economy on right track after 5.6% growth in 2018/19
  • Eni officials tried to tamper with witness in Nigeria case – prosecutor
  • South Africa’s Zuma denies interfering with Transnet CEO appointment
  • UN peacekeeper, 6 civilians killed in Sudan/South Sudan border area
  • South Africa’s retail sales jump in May ahead of expected rate cuts
  • 9 companies weighing bids for Vedanta’s Zambia assets – minister
  • IMF to vote on final loan tranche to Egypt on July 24 – PM
  • Zambia expects bids for Konkola Copper Mines within weeks – minister
  • South Africa subsidiary of carmaker Ford to add 1,200 jobs
  • South Africa’s retail sales up 2.2% y/y in May
  • Egypt’s GDP growth at 5.6%, deficit at 8.2% for 2018/19 fiscal year
  • Kenya orders deportation of 17 foreign directors of betting firms
  • WHO reports new ebola incident in Uganda
  • Zambia finance minister to outline position on sales tax soon
  • Sudan’s military council, opposition coalition sign political accord

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 17 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares subdued, dollar benefits as sterling suffers
  • Nikkei off 0.4% in thin trade, China markets flat
  • US retail sales strong, but market still set on Fed cut
  • Dollar gains as sterling stricken by hard-Brexit fears
  • Oil prices nurse losses on supply data, mixed messages on Iran

Oil Markets

  • Oil prices steady after falling to more than 1-wk lows
  • Brent up 16 cents at $64.51 per barrel (0027GMT)
  • WTI up 1 cent at $57.63

Precious metals

  • Gold inches down as strong US retail sales lift dollar
  • Spot gold down 0.1% at $1,405.26 per ounce (0104GMT)
  • US gold futures down 0.3% at $1,406.90/oz.

Grains

  • Corn extends losses into third session
  • Most active CBOT wheat futures down 0.4% at $5.05-1/4 per bushel (0054GMT)
  • Most active corn futures down 0.2% at $4.40-1/4 per bushel
  • Most active soy futures down 0.1% at $9.05-1/4 per bushel
  • Most active rice futures up 0.3% at $11.82 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa central bank 3-day MPC meeting; day 2, decision on 18 Jul [fcst. 6.5%, prev. 6.75%]
  • Ghana central bank 3-day MPC meeting starts; decision on 22 Jul [fcst. 15.0%, prev. 16.0%]
  • Ghana mid-year budget review & supplementary budget by finmin
  • South Africa’s Ramaphosa presidency budget vote at parliament
  • South Africa state capture inquiry continues; Zuma to continue testimony
  • South Africa PIC inquiry continues
  • 2nd Lake Chad Basin Governors Forum 2019 in Niamey, Niger; 16-18 Jul
  • South Africa retail sales May-19 [fcst. 1.8% yy, prev. 2.4%]
  • Kenya trade week 2019 in Nairobi; 15-21 Jul

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • UN envoy meets UAE minister to discuss fighting in Libya – tweet
  • Zimbabwe public worker strike on the cards after pay offer rejected
  • South African musician Johnny Clegg dead at 66 after cancer battle
  • Africa Oil – September Angolan programme holds exports steady
  • Zambia finance minister urges quick implementation of austerity
  • EBRD looks to boost equity investments in Egypt
  • France, UK, Egypt, UAE, US, Italy call for immediate end of Libya violence
  • Sudan’s opposition rejects judicial immunity for military rulers
  • South Africa’s rand inches weaker in wait-and-see session
  • Nigeria’s state oil firm awards oil-for-fuel swap deals – sources
  • Father whose family died in Ethiopia plane crash to brief Congress
  • ‘I know nothing’: South Africa’s Zuma ducks and dives at corruption inquiry
  • Credit Suisse hires Goldman banker for Middle East, Turkey, Africa job
  • Sierra Leone school defies state ban on pregnant girls in class
  • First ebola patient Congo’s main city dies
  • Tunisia’s foreign currency reserves rise after it sold bond
  • Uganda shilling firms on ebbing importer appetite
  • South Africa’s Zuma back at inquiry, says his life is in danger
  • Kenya shilling weakens amid excess liquidity
  • South Africa’s Amplats expects half-year earnings to double

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 16 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares inch up as cautious investors await US data, earnings
  • MSCI Asia ex-Japan +0.17%; Nikkei -0.74%
  • US retail sales data in focus
  • Citigroup interest margin decline highlights headwinds for banks

Oil Markets

  • Oil down for a second day as US Gulf of Mexico output returns
  • Brent down 0.2% at $66.38 a barrel (0028GMT)
  • WTI down 0.2% at $59.48

Precious metals

  • Gold steady as investors eye US retail sales data
  • Markets price in 25bp cut by the US Fed
  • Platinum hovers near a 2-mth high
  • Spot gold remains neutral in $1,404-$1,421/oz range – techs
  • Spot gold up 0.1% at $1,415.19 per ounce (0521GMT)
  • US gold futures up 0.2% at $1,416.60 an ounce

Grains

  • Corn eases 1% as USDA tempers fears over crop condition
  • Most active CBOT wheat futures down 0.6% at $5.04-1/2 per bushel (0043GMT)
  • Most active corn futures down 0.9% at $4.43 per bushel
  • Most active soy futures down 0.6% at $9.14-1/2 per bushel
  • Most active rice futures down 0.4% at $11.84 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Kenya trade week 2019 in Nairobi; 15-21 Jul
  • South Africa state capture inquiry continues; Zuma to continue testimony
  • South Africa PIC inquiry continues
  • Gambia’s Barrow in UAE for 3-day state visit
  • Afro-Asia fintech festival in Nairobi, Kenya; day 2
  • Nigeria presidential election petitions tribunal continues

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Nigeria’s state oil firm awards oil-for-fuel swap deals – sources
  • Africa Oil – Traders await September programmes
  • Egypt revamps law curbing NGOs, critics unimpressed
  • South Africa’s rand, stocks boosted by global risk-on settlement
  • Egypt opens musuem commemorating Nobel laureate Naguib Mahfouz
  • Libya’s H1 oil revenue dips to $10.2 bln
  • Ethiopia premier’s aide named to lead restive Amhara region
  • Ebola spread to east Congo’s Goma massively raises risk – UN
  • Algeria suspends grain agency head in corruption probe – govt sources
  • Abruptly appointed Zambia finance minister to review sales tax plan
  • Defiant at inquiry, South Africa’s Zuma denies breaking law with business
  • Zimbabwe inflation almost doubles, stirring memories of economic chaos
  • With hip hop and bumper home loans, big banks target South Africa’s youth
  • Zambia dollar bonds soar after president swaps finance minister
  • Algeria suspends grains agency head over corruption allegations – govt sources
  • Nigeria consumer inflation falls to 11.22% in June – stats office
  • Treasurer of South Africa’s Eskom quits in latest high-profile departure
  • Jailed Zimbabwe lawmaker facing subversion charges freed on bail
  • South Africa’s Zuma denies having broken law with Gupta family
  • UN calls for hundreds of millions in more aid to fight ebola
  • EM debt soars to record $69.1 trln in Q1 on falling interest rates – IIF
  • Uganda shilling unchanged as tax payments trims demand
  • South Africa’s Zuma tells corruption inquiry there is conspiracy against him
  • 2 ebola health workers killed in eastern Congo
  • Zimbabwe’s annual inflation hits 10-yr high of 175.66%
  • Zambia president removes finmin, appoints central bank deputy governor

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 15 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares pull ahead after encouraging Chinese data
  • MSCI ex-Japan reverse losses; Chinese, HK shares bounce off lows
  • MSCI ex-Japan fell 1% last week after 5 straight weekly gains
  • Chinese Q2 GDP in-line with consensus, monthly activity data upbeat
  • Morgan Stanley says re-enters short USD/JPY trade

Oil Markets

  • Oil prices edge down ahead of expected weak China data
  • Concerns of slowing China growth weigh on oil prices
  • Storm cuts Gulf of Mexico output by 73% – US govt
  • Brent down 6 cents at $66.66 a barrel (0022GMT)
  • WTI down 5 cents at $60.16

Precious metals

  • Gold trades steady ahead of China GDP data
  • Spot gold flat at $1,415.34 per ounce (0100GMT)
  • US gold futures up 0.3% at $1,416.50/oz

Grains

  • US corn jumps 1% to hit 5-yr high; soy firms
  • Most active CBOT wheat futures up 0.4% at $5.25 per bushel (0002GMT)
  • Most active corn futures up 1.2% at $4.64-3/4 per bushel
  • Most active soy futures up 0.5% at $9.36 per bushel
  • Most active rice futures down 0.1% at $11.89 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa state capture inquiry resumes; former president Zuma to testify
  • South Africa PIC inquiry resumes
  • Gambia’s Barrow in UAE for 3-day state visit
  • Afro-Asia Fintech Festival in Nairobi, Kenya; Kenyatta & Njoroge attending
  • Nigeria inflation Jun-19 [fcst. 11.1% yy, prev. 11.4%]

Key African events or data releases over the weekend & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • As fuel prices rise, firewood rustlers vex rural Kenya
  • Why the cobalt market needs Congo’s “illegal” miners: Andy Home
  • Sudan man shot dead during protest as sides wrangle over transition
  • First ebola case in Congo city of Goma detected
  • Burundi names head of ruling party militia to lead state broadcaster
  • Kenyan blames high-doping offence figures on participation numbers
  • Tanzania’s central bank sacks CEO of state-run bank
  • Final death toll in boat migrant accident off Tunisia rises to 82
  • Thousands demonstrate in Sudan to mark 40 days since deadly crackdown
  • Egypt opens Sneferu’s “Bent” Pyramid in Dahshur to public
  • Tanzania says elephant, rhino populations rebounding after anti-poaching crackdown
  • South Africa confirms plans to block extradition of ex-Mozambique finmin
  • Tanzania central bank fines lender for breaching rules
  • Zimbabwe hikes fuel price again after minister says it’s still cheap
  • Somalia security forces end militant attack on hotel that killed 13 – police officer
  • Algerian protesters push for reforms, man tries to burn himself
  • Congo Republic IMF deal expected to unlock $2 bln in AfDB funds
  • Morocco’s budget deficit grows to 21.8 bln dirhams in first half
  • Africa Oil – Total awarded IOC tender with Suezmax
  • Kenya betting firms say payment systems suspended following govt order
  • More bodies found in Tunisia migrant ship sinking feared to have killed more than 80
  • Ivory Coast bitumen maker SMB expects to double sales in 2 years
  • Italy court says Eritrean in migrant case was victim of mistaken identity
  • Congo rules out using additional trial vaccines to combat ebola
  • South Africa to deploy army to quell violent crime in Cape Town
  • Uganda shilling flat amid limited offshore investor flows
  • Kenya shilling expected to weaken due to importer demand, excess liquidity
  • UN chief calls for more support for cyclone-hit Mozambique
  • South Africa court finds Zuma’s son not guilty over car crash death
  • South Africa’s Sasol opens new chemical plant in east China

N.B. Full stories of above headlines are available on Reuters