Venture capital (VC) and private equity leaders are expecting a sub-Saharan African economic boom with GDP growth beating International Monetary Fund forecasts this year and next year, new research for blockchain-based mobile network operator World Mobile shows.
The IMF** is predicting sub-Saharan Africa’s economy will expand by 3.7% this year and 4% next year and warns that the impact of Russia’s invasion of Ukraine and the global shock to oil and food prices is affecting the region, which is recovering from the after-effects of the COVD-19 pandemic and US interest rate rises.
However, the senior VC and private equity executives questioned across the UK, US, the Middle East, Singapore, Hong Kong, France and Germany believe economic growth in the region will beat expectations, and they highlight efforts to improve internet connectivity as a potential reason.
Nearly three-quarters (74%) expect GDP growth in the region to be 4%-plus this year with one in five (21%) predicting 4.3% or higher. For 2023, 90% expect GDP growth to beat the IMF forecast of 4% with more than two out of five (43%) predicting 4.5% growth or higher.
The research highlights the importance to VC and private equity executives of improvements to internet connectivity in driving economic growth – around 57% say it is extremely important while 29% believe it is important. Around 12% say it is important along with other factors, while just 1% say it is not very important to economic development. But World Mobile warns innovation could be held back if businesses do not recognise the importance of internet connectivity.
World Mobile is one of the major innovators revolutionising internet connectivity in Africa and is already working with the government in Zanzibar. Its innovative solution includes launching a unique hybrid mobile network delivering connectivity supported by aerostats backed up with a range of technologies including mesh networking, hybrid spectrum, renewable energy, and blockchain. It plans to expand the network throughout the continent and is in discussions with government officials in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.
Micky Watkins, CEO of World Mobile said: “Global economic growth is being hit by the fallout from the Russian invasion of Ukraine and the widening impact on food and fuel prices along with rising interest rates in the US.
“Countries in sub-Saharan Africa which are commodity importers are particularly affected, so it is good to see that venture capital and private equity investors on the ground believe that the economic outlook is more optimistic than thought by the IMF.
“They are right to highlight the importance of internet connectivity to economic development and it will only grow in the future, particularly for areas where delivering affordable and reliable connectivity remains an issue. World Mobile’s network based on the sharing economy sells affordable network nodes to local business owners, so they have the power to connect themselves and others while sharing the rewards. This will enable more people to access the opportunities that internet connectivity creates.”
World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide a digital connection to people and is the first step in its mission to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs.
World Mobile’s hybrid network takes a more sustainable approach than that of legacy mobile operators, offering innovative solutions to environmental, social and governance concerns. By using solar-powered nodes, second-life batteries and energy-efficient technology, the network mitigates its environmental impact. World Mobile also facilitates positive and sustainable societal growth through the application of its “sharing economy”, where locals share in the ownership and rewards of the network.
