Mobile phones are transforming Africa

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From The Economist:

“DRIVE a few miles from the centre of Accra, the capital of Ghana, into the neat rows of houses that surround it and the paved roads disappear almost as quickly as the phone lines. Yet this has not dented the ambitions of Kwami Williams, a graduate of the Massachusetts Institute of Technology (MIT) who is building a business processing moringa trees and exporting the resulting tea and cosmetic oils. Before mobile-phone usage exploded across Africa, starting a venture such as this on a shoestring would have been impossible—the costs of communicating with the thousands of smallholders who grow the trees would have been prohibitive. Now this business supports some 1,500 farmers.

Across Africa, similar magic is being wrought as phones spur innovation and boost incomes: farmers use them to check market prices before selling to middlemen, and market traders can accept payments in mobile money. A study by academics from MIT, published this week, found that simply by gaining access to M-Pesa, Kenya’s mobile-money service, 2% of Kenyan households were lifted out of poverty between 2008 and 2014.

The precise impact of phones on economic growth is notoriously difficult to measure (although that does not stop trade bodies and consultants from issuing gushing reports filled with unnervingly exact numbers). The GSMA, an international trade body, argues that for every 10% increase in phone penetration in poor countries, productivity improves by more than four percentage points, and that a doubling in mobile-data usage increases annual growth in GDP per person by half a percentage point. Yet more may be in store as Africa stands on the cusp of a second mobile-phone revolution.”

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