How Africa’s Economic Ambitions Relate to 6G

July 20, 2022

Written by Alex Lawrence

At an event earlier this month Wamkele Mene, Secretary-General for the African Continental Free Trade Area (AfCFTA), underlined the opportunity for Africa in economic and trade development. He described the continent’s economy as being driven today mainly on a “colonial economic model” where raw materials were being exported for processing elsewhere.

Speaking at the Africa Investments Risk & Compliance Summit, Mene pointed to the example of the automotive sector, which draws on copper; leather for upholstery; rubber for tyres and gaskets; cobalt for batteries and much more from the continent. He suggested that economic development in the region should depend on the processing of such raw materials into parts and then exporting those, a view echoed by the CEOs of Ecobank and Zenith Bank as well as government figures from across the continent.

In the same event – the African Investment Risk and Compliance Forum – Zenith Bank CEO Ebenezer Onyeagwu also underlined the opportunities to be reaped by improving the physical infrastructure enabling trade between African countries.

“At the moment about 15% of Africa’s trade is within the continent, as opposed to over 60% in Europe and more than half in Asia,” he observed. “Even Africa doesn’t think of trading with Africa!”

How is this relevant to 6G? A few reasons.

6G in Africa

While Africa is set to launch its own industrial revolution, other parts of the world are in the grip of another one, making a digital transition built around “Industry 4.0” concepts. These, in turn, are supported by a considerable existing digital infrastructure but limited in implementation by the availability of the necessary skills.

Mene’s proposal works on a timeline that ties in with the development of 6G, aiming at creating significant improvements in Africa’s economies by the mid-2030s. By that time, it seems likely that we will see the implementation of some 6G capabilities at least, though where and how is unclear.

Moreover, as a key enabler for Africa’s Free Trade Area, Mene underlined the role of The Pan African Payments and Settlement System (PAPSS). This system enables cross-border commerce in a much simpler way than before.

In the past, a transaction in one currency would be converted to dollars, sent to the receiving bank, and converted back using the SWIFT international payment system. In 2021, Africa’s trade spent $5 billion on transaction costs for this.

By contrast, PAPSS is a real-time, bank-to-bank service making a direct exchange between currencies, reducing costs and friction. This aims to simplify cross-border trade, certainly. It also improves visibility into what trade is taking place and how much of it there is, something which can be obscured by routing through a third party. 

While PAPSS is exciting as an instrument of change, it relies on another one: digital infrastructure, and the physical infrastructure behind it. The ITU-D’s Facts & Figures 2021 makes striking reading in this regard.

While the developed world had 99% of its population covered by 4G or better in 2021, in Africa as a whole this figure falls to 49%, with 3G covering a further 33%. In Europe, broadband prices are typically 1-2% of monthly incomes, while in Africa they average over 18% of income. For this, they receive on average less than 1/3 the global average bandwidth. In other words, Africa’s digital infrastructure could do with an upgrade alongside its industry.

This is where the annual reports of Africa’s biggest operator groups make for encouraging reading. MTN, Airtel, Orange and Vodacom have all been aggressively building out mobile broadband coverage over the past couple of years.

Where reported, ARPU [Average Revenue Per User] for basic services has been falling, but the growth in subscribers and/or revenues in areas such as financial services has resulted in growing revenues even so – creating a win-win situation. Elements of 6G’s development should further feed into these trends.

  • While non-terrestrial networks are already being integrated into the standards for 5G and 5G Advanced, plans for 6G include integration with satellite and high-altitude platforms for truly ubiquitous coverage, with seamless handoffs to the best available access technology. In many of the more rural parts of Africa this will help support universal access in a way which was previously not possible.
  • Requirements for 6G will include backward compatibility with 5G, not least because operators (and their investors) are sceptical of the decade-long generational cycles of replacing networks with newer ones. As noted in May’s 6GSymposium, much research seems to be oriented around the need to create solutions which are relatively simple/ cost efficient/ cheap to implement. This means that investments into infrastructure and 5G in this decade will pay out in the longer term and help the continent close the divide as 6G comes into commercial operation.
  • While edge computing is a feature that can be brought into existing networks, 6G is likely to feature an architecture of distributed, intelligent computing, using COTS hardware where possible. While there is a cost to deploy this, it reduces the amount of data movement between core/cloud and the end device. This will slow growth in traffic further back in the network, giving fibre investments a longer lifetime before they need upgrading. Meanwhile, for prospective manufacturing facilities the edge processing can be managed on-campus, keeping data more securely within the company’s control.
  • India’s standards body TSDSI championed the adoption of some alternative standards for 5G, bringing 5Gi into the ITU’s fold. These have been developed with an eye on emerging markets that have different requirements and starting infrastructures from the heartlands of tech development. For 6G, the process of thinking about how to integrate such requirements is already in progress with the ITU.

People Power?

Arguably the greatest challenge for Africa’s industrial revolution will come from the availability of skills to accomplish the result. In much of the world there is already a shortage of digital skills in critical areas such as cybersecurity and data analytics, driven by the digitisation of many industries and phenomena such as industry 4.0 itself.

Ironically, this may be a situation where a virtuous circle might be possible. Online courses and education have been taking off in the past few years, and with improving access to these it opens up new opportunities to train a workforce without needing to build a full academic infrastructure in-country.

In addition, the process of setting up and managing new manufacturing companies may be getting easier, as information on the processes and materials involved becomes more accessible to non-specialists.

A similar evolution for data platforms and analytics still needs to happen – essentially hiding the surface complexity and making something more accessible for people without specific skills. This is not something unique to Africa by any means. However, these kinds of platforms are set to have outsized impacts in a region where entrepreneurs and smaller companies currently prevail.

To Ecobank CEO Ade Ayeyemi, one solution for the skills gap is to attract external investment into the region.

As he noted of physical trade infrastructure, “ownership doesn’t matter. What matters is the ability of our people to use it”. While this might mean investment and bringing in skilled workers from foreign countries, over the past decade there have been efforts to attract the African diaspora back, bringing with them their skills and ability to invest.

Here we come to one of the biggest challenges for the continent. While there are many reasons to be excited about Africa’s prospects, stability is a concern. Without that, investment and migration from outside – whether from the diaspora or others – is going to be limited due to concerns about the ability to recoup investments.

As the World Bank observed in a recent report, West Africa has some valuable lessons to teach about stabilisation even as it faces threats to order including population movement, extremism, and tribalism. While concerns about shocks driven by internal pressures are real, even in the face of strains from Covid and now the Russia-Ukraine conflict there are reasons for optimism about the underlying forces on the continent.

The African Continental Free Trade Area is a bold and long-term economic plan for Africa and a very welcome one. It will be exciting to see how digital infrastructure and development can combine with economic development over the coming decade or so.

Drop us a line

Interested in contributing to 6GWorld.com? Let's connect to learn more about your ideas.

Drop us a line

Interested in contributing to 6GWorld.com? Let's connect to learn more about your ideas.

Recent Posts

ITU Election 2022: Facts, Statistics, and Candidates

ITU Election 2022: Facts, Statistics, and Candidates

Every four-years, member states of the International Telecommunication Union (ITU) choose their new high-level representatives, whose perspectives and goals will set priorities in the telecommunications world. The same is set to take place this year: in September and...

Podcast – The 6G Roundup (Aug 12)

Podcast – The 6G Roundup (Aug 12)

Wondering what happened in the world of 6G this week but have no time to keep up with the news? 6GWorld brings a review of the most relevant ones. In this episode, we talk about a Memorandum of Understanding between the Next G Alliance and 6G-IA, India's efforts to...

Pin It on Pinterest

Share This