Connecting rural communities, supporting social and economic progress

The recent G20 summit in London saw the world’s most powerful leaders reaffirm their historic commitment to halve poverty in Africa by 2015, announcing a US$100bn aid package for developing countries across the world. While debates rage about the best use of this sum, the percentage to be allocated to Africa and indeed whether leaders are honouring their commitments at all, the contribution of Africa’s leading businesses goes largely unnoticed. While aid and charity undoubtedly have their place, business has an absolutely vital role to play in ensuring Africa is able to fulfil its economic potential - not just in terms of providing investment and employment opportunities, but also in terms of acting as a force for positive socioeconomic change on the content.Since 2005, Zain alone has invested more than US$12bn in Africa (through purchases and spending on infrastructure), a significantly larger sum than the G8 economies have collectively delivered since Gleneagles.
The telecoms industry is a key example of how business can facilitate social and economic progress in underdeveloped countries. Independent research shows that, in developing countries, increasing access and provision of mobile phones increases GDP per capita growth by 0.6 per cent per annum. More broadly, mobile phones also promote entrepreneurship and economic activity by widening access to markets and compensating for poor or non-existent transport infrastructure, supporting social and economic progress. The contribution the telecoms industry is making in terms of employment is also significant. Zain employs more than 10,000 employees across Africa, and 98 per cent of them are African. However, many thousands more people are indirectly employed by Africa’s mobile providers, earning their living reselling prepaid airtime.
The role of business in facilitating social and economic progress isn’t limited to job and wealth creation; companies can play a significant role in driving technological advancement. Zain is renowned for its track record in innovation, none more so than for pioneering One Network - the world’s first cross-continental borderless network. This ground breaking service, which allows travellers - and crucially, traders - to move across borders without incurring roaming call surcharges, is available to 500mn people stretching from the west coast of Africa to the Middle East, covering an area larger than the United States of America.
One Network is available to over 400mn people in Africa (50 per cent of the continent’s population) and has conclusively demonstrated that Africa can lead the way when it comes to innovation, thereby helping to break down stereotypes of Africa as a place to do business. As well as keeping friends and families connected, One Network is a key enabler of economic growth - encouraging small and medium scale enterprises and individual traders to more easily expand into new markets.
Mobilising connectivity is an important part of Zain’s ongoing commitment to provide affordable and accessible mobile telecommunications. Zain has invested billions of dollars in Africa over the past three years building remote rural networks to improve access in areas previously unreachable by telephone and through the provision of Ultra Low Cost Handsets (ULCH) for low income earners. These handsets cost less than $20 and are sold with pre-loaded Zain SIM cards, considerably reducing the cost of entry into the telecoms market.
Our Ultra Low Cost Handsets have been an incredible success story - since February 2008, the company has sold more than two million low cost handsets in Africa, which is a significant part of the Group’s customer base in the region. Zain has also pioneered the use of public telephones allowing customers who do not own a handset to make calls by inserting their own SIM card into a payphone.
Zain is also committed to pioneering micro-financing initiatives and is working to push the boundaries of mobile banking on the continent. We recently launched our new mobile commerce platform, Zap, to more than 100mn people in East Africa - the most comprehensive and accessible mobile commerce service currently available on the continent. Zap allows Zain customers to effectively transform their phones into mobile wallets, allowing them to use their handset in much the same way as a debit card. The service is supported on all handsets including ULCHs and given that an estimated 80-90 per cent of the region are currently unbanked, is set to provide millions of people with access to banking for the very first time. Already customers in Kenya and Tanzania are using it to pay their electricity bills while businesses are using it to collect payment when supplies are delivered to remote areas.
Business also has an important role to play in terms of delivering corporate social responsibility programmes, partnering with governments and NGOs to drive through social improvement programmes and adding their private sector expertise and resources to help promote sustainable and timely change.
On Lake Victoria for example, Zain is working to reduce the 5,000 deaths caused each year by drowning by increasing mobile coverage to take in 90 per cent of the most populated fishing grounds. The Build Our Nation programme, which we began in 2005, has seen us partner with governments to help them meet the Millennium Development Goals through the provision of education initiatives, programmes and supplies.
Affordability and accessibility Zain is also involved in the Earth Institute’s Millennium Villages project; a science-based bottom-up approach to lifting rural villages out of poverty. Together with Ericsson, we have developed a comprehensive end-to-end telecommunication strategy in the villages to drive mobile phone connectivity and coverage in the communities.
Zain and Ericsson have built mobile networks for the communities and provided the 400,000 village inhabitants with internet access for the first time. Zain has also provided SIM cards and established emergency numbers to improve access to healthcare and emergency services.
Providing affordable and accessible mobile telecoms allows Zain to contribute significantly to the social and economic conditions of its customers. The simple act of ‘being connected’ has an enormous impact on every aspect of rural life - as I see frequently in my travels across our 15 Africa operations - allowing customers to stay in touch with loved ones, seek emergency medical attention and even compare the price of livestock in local markets.
Business is undoubtedly the way forward for Africa, with the mobile telecoms industry providing compelling evidence of the role leading private sector companies can and must continue to play if the Millennium Development Goals are to be successfully met by 2015. At Zain, despite the challenging global environment, we will continue to invest in expanding our network and providing affordable, accessible communications, recognising that facilitating social and economic progress is beneficial for business and civil society alike.

Chris Gabriel, Chief Executive Officer, Zain Africa

twn Are you sure that you want to switch to desktop version?