According to new research for blockchain-based mobile network operator World Mobile, venture capital (VC) and private equity leaders anticipate a Sub-Saharan African economic boom, with GDP growth exceeding International Monetary Fund forecasts this year and next.
The IMF forecasts that Sub-Saharan Africa’s economy will grow by 3.7% this year and 4% next year, but warns that Russia’s invasion of Ukraine, as well as the global shock to oil and food prices, will have an impact on the region, which is still recovering from the effects of the COVD-19 pandemic and US interest rate hikes.
However, senior VC and private equity executives polled in the UK, US, Middle East, Singapore, Hong Kong, France, and Germany believe the region’s economic growth will outperform expectations, citing efforts to improve internet connectivity as a possible reason.
Nearly three-quarters (74%) predict 4%-plus GDP growth in the region this year, with one-fifth (21%) predicting 4.3% or higher. 90% expect GDP growth to exceed the IMF’s forecast of 4% in 2023, with more than two-thirds (43%) expecting growth of 4.5% or higher.
The study emphasizes the importance of improved internet connectivity in driving economic growth to VC and private equity executives, with 57% saying it is extremely important and 29% saying it is important. Around 12% believe it is important in conjunction with other factors, while only 1% believe it is not very important to economic development. However, World Mobile warns that if businesses do not recognize the importance of internet connectivity, innovation will be stifled.
World Mobile is one of the major innovators revolutionizing internet connectivity in Africa, and it is already collaborating with the Zanzibar government. Its innovative solution includes the launch of a unique hybrid mobile network that provides connectivity via aerostats and is supported by a variety of technologies such as mesh networking, hybrid spectrum, renewable energy, and blockchain. It intends to expand the network across the continent and is in talks with government officials in Tanzania and Kenya, as well as other underserved areas by traditional mobile operators.
“Global economic growth is being harmed by the fallout from Russia’s invasion of Ukraine and the widening impact on food and fuel prices, as well as rising interest rates in the United States,” said Micky Watkins, CEO of World Mobile.
“Countries in Sub-Saharan Africa that import commodities are particularly hard hit, so it’s encouraging to see that venture capital and private equity investors on the ground believe the economic outlook is more optimistic than the IMF believes.”
“They are correct in emphasizing the importance of internet connectivity to economic development, and its importance will only grow in the future, especially in areas where delivering affordable and reliable connectivity remains a challenge.” The sharing economy-based World Mobile network sells affordable network nodes to local business owners, allowing them to connect themselves and others while sharing the rewards. This will allow more people to benefit from the opportunities that internet connectivity provides.”
World Mobile’s balloons will be the first to officially launch in Africa for commercial use, providing a more cost-effective way to connect people to the internet. This is the first step in the company’s mission to connect nearly four billion people to the internet by 2030, in accordance with the UN and World Bank’s SDGs.
World Mobile’s hybrid network is more sustainable than legacy mobile operators’ networks, providing innovative solutions to environmental, social, and governance concerns. The network reduces its environmental impact by utilizing solar-powered nodes, second-life batteries, and energy-efficient technology. World Mobile also promotes positive and sustainable societal growth through the use of its “sharing economy,” in which locals share in the network’s ownership and rewards.