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Moving forward in Zimbabwe Reducing poverty and promoting growth Table 9.3: Selected regional economies’ internet and broadband users and penetration. Country Internet users Internet penetration (Fixed) internet subscribers Broadband subscribers Zimbabwe 1,351,000 11.9 % 100000 15,200 Zambia 500,000 4.3 % 12,578 2,300 Malawi 139,500 1.0 % 85,029 1,600 Namibia 101,000 4.5 % 90,000 300 South Africa 4,590,000 10.5 % 4,279,200 378,000 Tanzania 400,000 1.0 % Uganda 750,000 2.4 % 15,500 1,900 Kenya 3,000,000 7.9 % 186,801 17,700 Sudan 3,500,000 8.7 % 42,500 Sources: Extracted from Internet World Stats for 31 March 2009; ITU African Telecom Indicators 2008 (fig. 2007). The number of personal computers per 100 people has risen from 1.5 per 100 in 2000 to 6.5 per 100 in 2007. This is higher than the average 1.8 per 100 for Sub-Saharan Africa. This may have a correlation with the higher levels of literacy in the country and may be a good sign of the adoption readiness, should other inhibiting conditions be attended to. The major impediment to internet usage in many developing countries, and in Zimbabwe, is cost. Because of the scarcity of broadband, most internet access is dial-up, and most countries charge for dial-up at conventional voice calling rates. A monthly usage of 20 hours of internet access costs almost US$50 in Africa, almost twice as much as the next highest region, the Americas. Internet pricing shows a very wide variation among African countries; but, more than one-third of the economies have monthly price baskets of more than 25 percent of per capita income. The price basket for internet per month in Zimbabwe was 24.6 in 2007 – much lower than the 29.2 average for the lower income countries , and even lower than the 43.1 for the Sub-Saharan countries (World Bank 2009 ICT at a Glance - http://devdata. worldbank.org/ict/zwe_ict.pdf) Figure 9.4: Difference in prices of ICTs between developing and developed countries, 2008. This sounds like a piece of good news, but not when seen within the broader context of the low income of the population. It should also be borne in mind that inflation eroded the value of the Zimbabwe dollar such that, when denominated in US dollars, every service looks cheap. Broadband When available, broadband in Africa is very expensive. The average price for an entry level broadband (256kbps) is US$100 per month, when the average for the OECD countries is US$45. Price variations are widest in the broadband market, ranging from US$18 per month in Morocco, to US$40 in Senegal (ITU, 2008) to as much as US$1,000 in Zimbabwe. There is no way that internet usage can become pervasive when the costs are so prohibitively high. When comparing the three technologies of fixed telephones, mobile telephones and broadband, it is clear that broadband in developing countries is much too expensive when compared to prices in the developed countries, as shown in Figure 9.4. There is no quick solution, and probably no other solution than to allow as many players into this market as possible and eliminate the current predatory pricing practices by the oligopolistic providers. Again, wireless comes to the rescue, as this now allows alternative ways of delivering broadband. It is hoped that planned undersea optical fibre projects in Africa, such as SEACOM’s undersea cable connecting south and east Africa, the East African Submarine Cable System (EASSY) and the East African Marine System (TEAMS), will lead to a lowering of broadband prices in Africa. Source: ITU, 2009b. 106
Moving forward in Zimbabwe Reducing poverty and promoting growth Table 9.4: Zimbabwe’s internet and broadband, 2000-2008. 2000 2001 2002 2003 2004 2005 2006 2007 2008 Internet subscribers (000s) Internet subscribers per 100 inhabitants Internet users (000s) Internet users per 100 inhabitants Broadband subscribers total (000s) Broadband subscribers per 100 inhabitants 30.0 35.0 40.0 83.0 90.0 96.0 97.0 99.5 99.5 0.24 0.28 0.32 0.66 0.72 0.77 0.78 0.80 0.80 50 100 500 800 820 1,000 1,220 1,351 1,421 0.40 0.80 3.99 6.39 6.56 8.02 9.79 10.85 11.40 … 0.8 2.8 6.4 9.0 10.2 10.2 15.2 15.2 … 0.01 0.02 0.05 0.07 0.08 0.08 0.12 0.12 Source: ITU ICT Eye, available at www.itu.int/ITU-D/ICTEYE/Default.aspx. 9.5 ICT growth, development and poverty alleviation: conceptual reflections and implications for poverty-focused reconstruction in Zimbabwe A key conclusion of the two World Summits on the Information Society (WSIS) in Geneva in 2003 and Tunis in 2005 was the recognition that ICTs are not only drivers for economic growth, but a key component in addressing development challenges (OECD, 2009). Although there are still contestations on whether growth in ICTs causes economic growth or economic growth leads to ICT growth, some available evidence suggests that GDP and telecommunications growth have causal effects in both directions (Hardy, 1980; Cronin, 1991; Norton, 1992; Alleman et al, 1994). Investment in telecommunications infrastructure, such as backbone infrastructure, is considered part of productive spending, as it has an effect on long-run aggregate supply. Such investments were found to have significant effects on growth (Röller and Waverman, 2001). The impact is twice as large for those economies that already have a substantial network infrastructure in place, and/or have achieved universal coverage. A study of OECD countries over the period 1985 to 1997 observed that a one per cent change in GDP corresponds to roughly an eight per cent change in investment, demonstrating large telecom investment sensitivity to the economic climate (OECD 2009). Indeed, the economic declines of 2000 in Europe saw severe declines in telecommunication investments. Work by Quiang and Rossotto (2009) shows that access to affordable, high quality broadband and mobile phone services promotes development across all levels of an economy. A ten per cent increase in high speed internet connections is shown to result in an increase of up to 1.3 per cent in overall economic growth. The evidence also shows that different ICT technologies have different impacts on growth, with fixed telephony having the lowest impact and broadband the highest impact (see Figure 9.5). Such evidence suggests that embracing new ICTs could enhance productivity growth and, depending on how the benefits of growth are distributed, could help reduce poverty. Mobile phone growth and economic performance With respect to mobile telephony, which has greater relevance for Africa, the available evidence suggests that a ten per cent difference in mobile penetration levels translates to a 0.6 per cent difference in economic growth rates (Waverman, 2005: 2). When the same (Waverman) model was specifically applied to developing countries, it was found that the impact was in fact double the average: a boost in economic growth of 1.2 per cent for every ten per cent rise in mobile users (GSMA, 2007). Recent studies have concluded that, in fact, the development impact of mobile phone technology is understated by as much as 75 per cent, because analyses have tended to focus only on the direct impact on GDP, and have ignored the indirect impact on downstream industries and consumer benefits (McKinsey, 2006). Considered together, the Figure 9.5: Growth effects of ICT. Sources: Qiang, 2009; World Bank, 2009b. Note: The y axis represents the percentage-point increase in economic growth per ten-percentage-point increase in telecommunications penetration. All results are statistically significant at the one per cent level, except for that of broadband in developing countries, which is at the ten per cent level. 107
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