"Africa's mobile money industry's value is expected to top $14bn while estimated to reach 500 million accounts," by the end of 2020
Africa's digital economy has taken off exponentially in the last couple of years. The internet has opened doors to access information and technology, a key component of accelerating the digital economy's pace and connecting markets where digital connectivity stands at 40% of the population in 2019. Interconnection and interoperability have created a bigger market, which in turn attract investors in numerous sectors.
The iGaming industry is no exception, which has positioned the continent as the hot spot for entrepreneurs in the iGaming industry. A recent report released by Google and the International Finance Corporation (IFC) succinctly estimates that the African internet economy can reach 5.2% of the continent's GDP by 2025, contributing nearly $180 billion to its economy.
The report further projected that the potential contribution could reach $712 billion by 2050, with the proximate implications if most African countries consider investment in infrastructure, consumption of digital service, public and private investment, new government policies and regulations will play an essential role in supporting Africa's digital growth and would play a part in countries that will benefit from the estimated GDP windfall. Africa is experiencing rapid population growth and urbanisation.
The growing urban and mobile population has created tremendous potential for the economy, and the iGaming industry has benefited from this growth in recent years. By 2025 45 percent will be in cities, internet penetration is 40% today and a 10% increase in mobile of which the numbers of people with internet access has grown to 522.8 million and over the next decade, numbers of internet users in Africa will grow by 11% comprising 16% of the total global amount.
The ongoing investment in subsea and terrestrial infrastructure will enable increased access to more affordable and higher-speed internet, which is pivotal to the iGaming sector; digital infrastructure is the backbone of the internet economy around the globe, and Africa international internet bandwidth has increased by a factor of 10 over the past decade to reach 12 terabits per seconds (Tbsps). Private firms in the tech sector are continuing to improve African connectivity by expanding their undersea cable networks is another potential.
The projected is pilot by Google's new submarine cable, Equiano, is expected to be completed in 2022, connecting Portugal and South Africa and part of Lagos Nigeria. The line is expected to have 20x the last cable's capacity to serve the region, allowing for more latency-sensitive products to function and developed. This development will, of course, explode the Africa iGaming sphere.
In contrast, the mobile phone market is a typical dynamism of the iGaming industry in Africa. Mobile phone subscriptions have grown in Africa from 87 million in 2005 to 760 million in 2017, growing 20% per annum. This is the fastest-growing market globally and the one with the most potential and is expected to reach 871 million by 2025. Mobile network coverage ranges from 10 to 99% in Africa, with an average of 70%.
The influx of mobile phone subscriptions has been key to the iGaming industry's unprecedented growth in recent years. As it stands, iGaming represents 23% of total betting GGR for Africa, which is $1.15bn, according to the IGB report. Within that, mobile represents just over half of the real gambling GGR. The figures are 12% for online, with 40% of that via mobile. Africa's pioneering efforts in the FinTech space (mobile money) is the paradigm shift from the traditional banking sector, which has illustrated the impact of the technology propelling numerous sectors in Africa.
The iGaming industry is one of the benefits of these innovations. FinTech companies were solving those pain point issues for customers going through that stressful and expensive banking sector, making it the first choice for the middle-class population, which offers affordable banking service with just your mobile phone at the comfort of your home. Around half of the world's mobile money, providers operate in sub-Saharan Africa, whereas many as 80% of adults have a mobile money account.
By the end of 2020, Africa's mobile money industry's value is expected to top $14bn while estimated to reach 500 million accounts. Although with these potentials right before the region, it is inevitable that more investment opportunities would be available, and investors from different sectors will be poised to tap into this Africa potential digital economy the region is going through. The iGaming industry is one sector that is expected to experience such a boom by 2025, where expensive data, low internet access in rural and remote areas have hindered the abundance of potentials the continent possesses.
Written by, Adeleye Awakan (pictured above): An Author, iGaming and gambling industry, AI, Blockchain, Fintech, researcher, and consultant with over five years of experience in the Africa iGaming industry. Connect with him on LinkedIn: Adeleye Awakan: Skype: live:a2b5e96b401c7985: Email:firstname.lastname@example.org.
About SiGMA Europe:
SiGMA Europe will take place on February 16-18, 2021. Europe remains a leading market for gaming, making this the perfect opening gaming show for 2021. Join us for the 7th edition of SiGMA at the MFCC - Malta Fairs & Conventions Centre, and explore how you can benefit from being a delegate, a sponsor, an exhibitor or a keynote speaker.