Introduction
Africa is the world’s richest continent in terms of natural resources, but one resource that it is woefully lacking is data and information, the continent’s rarest and most valuable commodity. Organizations and investors operating in Africa have little to go on in terms of official statistics and data sets. Even in cases where these kinds of statistics are available, they are often misleading or offer little help to, say, a soft drink producer that is trying to obtain market entry statistics to drive its decision-making process or an aid organisation trying to determine how to maximise the impact of a project.
The pitfalls of relying on poor data and research were highlighted recently with the announcement by Nestlé that they were cutting 15 percent of their workforce across 21 African countries because they overestimated the rise of the middle class. According to a Financial Times story on the Nestlé decision, many factors likely played a role in the company’s faulty analysis and forecasting, but it is safe to assume that the lack of reliable, comprehensive “official” data sets of economic and social indicator statistics (e.g. national governments, the World Bank, U.N., African Development Bank, etc.) greatly complicated the analytical effort.
Here at Confidion, we were recently asked about the applicability of our unique research methodology to our African-focused projects. This topic comes up frequently and it often boils down to two fundamental questions:
- Are Confidion’s research methods applicable in an African context?
- If traditional data quality is poor in Africa, will there be much for Confidion to analyse?
We will share our thoughts on these interesting questions in a two-part post that looks, first, at the growth of Internet access throughout Africa today and, second, what that growth has meant to social media usage among Africans.
Internet Access
Confidion works with publicly accessible Internet data that are pulled from social media, news media, etc. Therefore, our applicability hinges on the level of Internet access across Africa and the extent to which Africans (both in-country and the diaspora) use the public Internet for discussing, sharing, debating and reporting issues of the day, news events, products and services. In this context, the dramatic growth of Internet access in Africa, and the related growth of social media usage, is a game changing development that can plug some of the gaps in the current patchwork of empirical datasets. When leveraged effectively, this new data source can provide remarkable insights into issues ranging from politics to social matters, and economic conditions to consumer preferences.
Internet Access and the African Context
While the majority of Africans are still “offline”, Internet penetration and usage in Africa have grown exponentially within the last five years. As a result, there are a myriad of statistics on African telecommunications. One of the most often-cited sources is the Africa Internet Usage and Population Statistics website (IWS), which estimates that currently:
- Africa’s Internet penetration to be at 26.5%; and,
- Africa has the highest Internet growth rates in the world over the past 15 years at 6,958.2%.
- Over the past five years, the average annual growth rate for Africans using the Internet has been 22.2%.
In terms of mobile phone use, which is the primary point of Internet access in Africa, Informa Telecoms and Media has analysed the African market and:
- Forecasts that by the end of 2018 there will be 412 million smartphone users on the continent.
- Calculates that in June 2013, Africa had 778 million mobile subscriptions and forecasts that this will reach 1 billion subscriptions by the end of 2015 and 1.2 billion at the end of 2018.
So what?
All these growth numbers point to an undeniable fact: we are at an exciting tipping point for developing world and emerging market insights. Taking this example of Africa, alone, the data volumes that are being generated will grow in direct proportion to the growth numbers outlined above. This means that those who are getting in on the ground floor now in terms of analysing public Internet data have a first-mover advantage.
Researcher: Ian Whytock (ian@confidion.com)
Principal: Mike MacKinnon (mike@confidion.com)