Reducing Tax Barriers: Driving Progress in Mobile Internet Access, Sub-Saharan Africa

As the primary means of accessing the internet in Sub-Saharan Africa, mobile technology plays a crucial role in achieving digital inclusion ambitions outlined in the African Union Agenda 2063. It brings about significant economic benefits, reduces poverty, and transforms lives by providing people with access to a wide range of life-enhancing services, eventually, realizing the Africa We Want. By the end of 2021, approximately 40% of the adult population in Sub-Saharan Africa were connected to mobile internet services.

This is lower than the global average. From a consumer survey GSMA conducted in 2021 affordability stands out as the key barrier to broadband adoption in SSA. Therefore, affordable mobile internet access is essential for consumers and society as it has the power to modernize economies and bring about positive societal changes. By ensuring that mobile internet remains affordable, more people can experience these benefits, and existing users can consume more data. With advancements in data-intensive technologies, even greater advantages can be realized.

Given the transformative potential of mobile technology, it would be expected that there would be substantial support to ensure the continued growth of the mobile sector. However, mobile consumers and operators in Sub-Saharan Africa face a significant tax burden, which is one of the highest in the world. This taxation issue poses a considerable risk to the growth of mobile services and limits the social and economic benefits associated with mobile technology. It also widens the usage gap, making it harder for citizens to access these services due to cost. High costs of mobile ownership prevent many individuals from accessing devices, further exacerbating the issue.

World Bank reports that economic growth in Sub-Saharan Africa slowed to 3.6% in 2022, from 4.1% in 2021; and economic activity in the region is projected to further slowdown to 3.1% in 2023. The persistent sluggishness of the global economy, declining yet high inflation rates, and challenging global and domestic financial conditions amid high levels of debt explain the downgrade. Growth is estimated to pick up to 3.7% and 3.9% in 2024 and 2025, respectively – thus signalling that the slowdown in growth should be bottoming out this year.

Investment in mobile connectivity should be encouraged as a key enable for economic recovery to achieve this positive outlook and governments should focus on reducing consumer costs as it is associated with higher levels of mobile connectivity to attract and retain investment in the sector.
Mobile connectivity has the potential to accelerate Sub-Saharan Africa’s digital transformation and drive socio-economic advancements in various sectors, including healthcare, education, retail, and agriculture. Realising this potential requires policy measures that encourage network investments and enhance the affordability of digital services for consumers.

Overall, by addressing taxation issues and implementing supportive policies, Sub-Saharan Africa can harness the full potential of mobile technology to foster digital inclusion and drive progress in the region.

For more information:

Click to access The-Mobile-Economy-Sub-Saharan-Africa-2022.pdf

Click to access Rethinking-mobile-taxation-to-improve-connectivity_Feb19.pdf