Pricey calls, high airfares and visa red tape: How can we open up Africa to Africans?

Passengers disembark at Moi International Airport in Mombasa, Kenya. Photo/FILE 

By DANIEL KALINAKI

In Summary

• Many economists say economies on the continent, particularly in sub-Saharan Africa, need to sustain double-digit growth over many years if they are to emulate the success stories of China, Brazil, India and other emerging economies.
• The telecoms and the airlines sectors offer insights into some of these barriers; they show where there has been progress as well as areas for regulators and policy makers to break down barriers and catalyse growth within the continent.

To telephone Kinshasa, the capital of the Democratic Republic of Congo, residents of Brazzaville, the capital of the Congo Republic, for many years had to pay international call rates.

 

The calls would be routed via satellite link to Paris, Brussels, and then back across the River Congo to either capital. In 2002, officials of MSI telephone company, which had operations in both countries, decided to shorten the route.

They installed a microwave link across the 7km stretch of the River Congo that separates the two capitals. Overnight, international calls became local calls. The cost of a telephone call dropped by 80 per cent. Two years later, the service was rolled out to pre-paid customers, too.

More than a century after the partition of Africa, the telephone company officials had succeeded in building a virtual bridge over the river.

After a century of endemic war, poverty and disease, things are finally looking up for Africa. According to the African Development Bank (AfDB), economic growth is expected to hold at just under five per cent over the next year, and many countries have recorded more than a decade of year-on-year growth albeit from low starting points.

Some 100 million African households are expected to have annual incomes of more than $3,000 by next year, according to research from Standard Bank. Foreign direct investment into the continent overtook aid in 2003, and has been growing since.

According to the AfDB, there are now 350 million Africans in the middle class (defined as earning between $2 to $20 per day), representing 34 per cent of the continent’s total population.

This is more than double the number from 1980, and four out of every 10 Africans are projected to be middle class by 2060.

However, many economists say economies on the continent, particularly in sub-Saharan Africa, need to sustain double-digit growth over many years if they are to emulate the success stories of China, Brazil, India and other emerging economies.

READ: Africa’s global market approach will see it become next trade frontier

While a lot of emphasis is put on Africa’s relations with the rest of the world, little attention is paid to the internal barriers to trade and growth within the continent.

There is much public debate about access to foreign markets by African firms and countries, but little discussion about access to African markets by Africans themselves.

Where such access exists, it is often mired in bureaucracy, incompetence, protectionism, or sheer lack of common sense.

The telecoms and the airlines sectors offer insights into some of these barriers; they show where there has been progress as well as areas for regulators and policy makers to break down barriers and catalyse growth within the continent.

After its breakthrough in the DRC and Congo Republic, MSI, which had then become Celtel and then Zain through changes in ownership (and is now Airtel), experimented with bringing down barriers on a larger scale.