The Internet as an Engine of Growth and Development
04 September 2014 - A Workshop on in Istanbul,Turkey
This is the output of the real-time captioning taken during the IGF 2014 Istanbul, Turkey, meetings. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the session, but should not be treated as an authoritative record.
>> MACTAR SECK: Good morning, everybody. Now we can start our session for one hour and 30 minutes. My name is Mactar Seck. I'm working at UNECA and I’m in charge of new technology and innovation. Today our subject is to discuss how ICT can contribute to the economic growth. And we will focus more in Africa. But focus more in Africa means also we need to know what are the best practices in other countries.
If we read a study, there are several issues regarding how ICT can contribute to the economic growth. Now is the issue of broadband, you increase 10% broadband, you are going to win 1%, it is a subject to discuss. Maybe it is true in some country and other country it is not the same thing. We are also the issue of education. But ICT is not access. We need to know how to use these tools to improve the other sector. It is a wide subject we are going to discuss today. We know also over 720 million Africans are mobile. And the contribution of Internet user economic growth in Africa is very low, it’s 1.1%. It's low compared to as a country. What kind of policy we should implement in African country? What kind of facility the government should give to the business to the entrepreneur, to the sector private? What kind of curricula of education to involve all in the development of the sector?
Today I have a panel comprised by Mr. Andrew from AM Global Consulting. He is going to make a presentation to focus more in Africa. And I have also Mr. Pierre Dandjinou, Vice President ICANN Africa. He'll talk about policy and industry relating to the development of ICT in Africa. Mr. Jensen of Africa ICT. Also he has a company. He’s going to share some ideas with us on how ICT can make money for African people.
Also we don't talk about ICT development, economic, without to have a look on the infrastructure on the content. And Mr. Jensen of ACPC is going to give us some idea of the current situation of the infrastructure in Africa and where we can go to improve the access in Africa in order to make profit for all African people.
Later I think we are going to have another panelist again, also to talk about some issues. Now I'm going to give the floor to Mr. Andrew for ten minutes to make another presentation before I'm going the ask questions for the panelists.
>> ANDREW MACK: Mactar, thank you, very much very much. Can everyone hear me clearly? I know these microphones are a little tricky. Great. My name is Andrew Mack. I'm the principal of AM Global Consulting based in Washington. We work with companies and NGOs around the world to help them to do more and better work in emerging markets with the special focus on Africa amongst other people we work with and do work with are the dot Africa and dot NGO teams.
I think it's fair to say a fair amount of experience from people who are not from the continent. I think I've worked in 34 different nations of Africa so it's a great pleasure to be here, a great honour. My presentation is titled the Internet is the driver of economic growth in Africa, what do we need for the way forward. So I will be doing if you will the framing presentation. So when we look at this ‑‑ second slide please. Gentleman in the back, any luck? Beautiful, let's go to slide two, please. One more. Beautiful. Okay.
Okay. There we go, thank you. Wonderful technology. So if you think about it, when we are looking at technology and especially ICT as a focus, three things jump into my mind. The first is what we have already done in terms of economic growth. When you look at the cell phone revolution the idea that there's ICT in your pocket and we need the remember just how important this is, the amount of computing power that the most Africans have is extraordinary compared to what was available even three years ago and continues to grow in its power and its utility. Businesses can be runoff of a cell phone; the web can be searched off of a cell phone. There are a tremendous number of things you used to have an office for that you can now do. e‑gov and e‑services are also extremely important as ways to avoid time barriers that were in the past a very big constraint of trade.
But on the employment side, there still we main big questions. Where are all the jobs that we were expecting to see as a result of this ICT revolution? Right now we are still in the part of our economic cycle where we are largely focusing on training, focusing on future jobs. It isn't to say there isn’t money being made but in terms of our hopes we are clearly not where we need to be. I also wanted to mention that this revolution in your pocket it provides important new options for NGOs and for Civil Society. And those are also key to economic growth. If you think about it, the whole idea of crowd sourcing, the whole idea of being able to create business that use all the metadata that comes in, tremendously important but not nearly widely enough diffused around the continent.
There we go. Great. Okay. So what we have is really high expectations for ICT jobs and growth. And there are expectations across our societies. There are expectations on the part of government to grow in a decentralized way and to modernize. Decentralized really, really important because think of the number of countries you have to go to the capital in order launch a business. With ICT in theory you have other options for making money, for creating strong buses in other parts of the country.
Second of all, from the private sector looking to expand into new markets as growth rates in the global north stagnate. This is really, really important. Much of the growth we have seen economically happened in Africa in parts of the global South in the last 15 years. It's not been happening in Europe or the United States.
Third, for donors in the development world they see ICT and they see cell‑phone based and computer based technology as really skipping steps making the project so much more efficient, not just using ICT as a delivery method but also as a way that communities can check up on whether the money was well‑spent, whether the projects are doing the things they set out to do. It creates a kind of feedback mechanism that is tremendously important and very strong in terms of guaranteeing transparency.
Lastly, for youth, there's not a country that I've spoken to that doesn't have as part of their 2020 plan or 2030 plan that ICT and software will be a prime driver to both youth employment and also as a way of creating future revenues. But are these expectations realistic? So what will it take to unlock these? I've divided up in the five P's and there's a left side and right side. On the left side we have the pipe, power and personnel. What is the pipe? The pipe is access. The pipe is undersea cables, it's what is wireless connectivity that expands into broadband. Clearly we are not where we want to be but it's on the left side because that issue is being addressed in real time and being addressed relatively well. More and more infrastructures out there every day. Second thing is power. What I mean by power is real power like electricity, brownouts, blackouts. The ability to keep your infrastructure going without a generator.
Again, this is something that has historically been a major constraint but I see it as something being addressed. The last in terms of training and capacity, personnel. It is true that Africa does not have nearly enough people in the ICT sector based on what the need is and what the opportunity is but that is another one that is getting addressed. However, there are two that I'm going to focus on briefly and then that will be the end of my presentation and that's payments and policy. Payments and policy are important because those are the two issues where I think we probably need the most work. So payments, what do I mean by payments? Well, payments is about getting paid, right? And you notice the speed with which you're able to get ‑‑ pay for something often determines how well your economy is going. The quicker you take my money, the more advanced your society is in some ways. That's because it's a speed of trade.
What is one of the challenges is that much of the Internet business is credit card business. A lot of the ways that people make money on the web is credit card based. Certainly in the global North. That's a problem. Anybody have a sense of how many Kenyans have credit cards? When I was there in May I was told by a couple of people they believed it was less than five% and maybe less than 3%. If you think about your possibilities for E‑commerce, 3% probably not so great. Neither technological standards or legal standards. If I have a great thing that I want to sell, I have to be able to protect my IP and make the payments work. Second there's a lack of partnership with the financial sector.
Clearly we need to get the financial sector more deeply involved in this conversation around ICT and we need heightened security so all of these cross border transactions and inside the country transactions work more smoothly. How can I pay to you do work for me? If I've got a great idea and I want to work with one of my colleagues in Nigeria, how easy is it for me to hire you and pay you some big challenge.
Second is policy. Here I'm going to tell you some things I think should be pretty obvious but not always for governments. First less is more. Government by its nature is typically reacting to last year's problem or last year's issue given the speed of innovation. We need to figure out how to get them to see that they don't need to control everything; they just need to control the broad aspects of it. Second, IP protection. It's crucial to making money. Countries where IP is strong it's easy to get to profitability.
As we talk more about the desire to draw in international capital, that's going to be tremendously important. If you're in a position where I believe I can protect my IP, I'm more likely to invest in your country. Infrastructure, make the pipe work, tax the back end, don't tax the people who are trying to provide infrastructure. Fourth, make it easy to start companies and run them. Everyone who knows has started a company knows the easier it is to start it, the more likely you are to start it. I see a lot of nodding heads. And last one, make it easy to attract non‑traditional sources. Crowd funding, small investors, even tourists can be sources of investment funding for small projects. But we have got to make it easy for them, make it transparent for them and create the payment systems that allow to us take their money without any effort on their part.
One more question down here on the bottom, in orange it says can government really help create entrepreneur culture? And I ask this as an open question because I think it really is an open question. There's a tremendous interest in entrepreneurship and innovation. I think the jury is still out as to whether or not government really can play a role in that and whether government is any good at that and how we should work with government, not to say there's not good intent on the part of government but can government help entrepreneurs and entrepreneurship? I don't know. So going forward, collaboration between government and the private sector, clear. Need much more focus on getting paid, getting Africans paid, getting Africans paid by other Africans, paid by people outside. But there this dynamic tension of risk and destructive technologies that needs to be part of the global culture.
We need to create a culture where we tolerate constructive failure more. You've heard about the strength and success of Silicon Valley. It is a badge of honour in many parts of the tech world to say you started something that didn't work and we need to make it easier for that to happen. Last is to tap everyone's interests.
There are a lot of interested parties out there. If we look at the interests closely we will see they're pretty well‑aligned. So my last slide says the Internet is simply the world's greatest public private partnership. Let that sit in for a second because I think it's true. What has made a transform nation had the global South and whether what will make it in the rest of the world is the sense of partnership, the sense that we of a common interest and that working together we can create tremendous leverage. So thank you very much for listening. That's my presentation.
>> MACTAR SECK: Thank you, Andrew. I think it was a very interesting presentation. We are going to have more discussion about the subject. I'm going to focus on your five P in your presentation, power, infrastructure, personnel, payment, policy, and also pipe. I'm going to ask one question to Mr. Pierre Dandjinou. Do you have the power to develop this industry in Africa?
>> PIERRE DANDJINOU: Thank you, good morning, to all. Pierre Dandjinou, VP, ICANN Africa. And to your question if I understand quite well, questions about whether we do have a proper policy for promoting business in the ICT sector in Africa? Thank you very much. Well of course if I consider my background with the UN as ICT I mean advisor on ICT and development, where we actually were pushing countries to develop what we are calling E‑strategy at the time, and now as a VP of Africa and basically implementing what we call the Africa strategy of ICANN which is about promoting the business in Africa, of course I will say there have been some policies and many countries moving forward because they were able to as a proper strategy and one country is Rwanda, Rwanda went of the way of developing its own strategy and of course they were able to review the strategy accordingly and things are quite clear. Rwanda is one of the places they are really moving.
There are very few places in Africa where you can get your visa online and this doesn't take any time for you. 48 hours you are done. And if you enter now the country and you see the potential the use they are making of this ICT to transform agriculture, education, these things are really happening. It shows yes policy matters and it's quite good in the country, am I doing this? But I will say that the potential is there. And if you go for in the work he said, his five P's. For me the question is how we reality work around those five P's because we all know about the e‑strategies or whatever in Africa is about those P's, it's about policy, of course it's about personnel, staffing. But then in that regard I will like to cite this report, you might have learned about it.
It's a report that ICANN committee I think a year ago which really discussed something that certainly you will know but they were able to formalize it in a way that is interesting to know. It's what they are calling e‑friction. The report is available and if you go to the ICANN booth here they might have a copy of it. What the report did is quite interesting. The title is connected world, greasing the wheels of the Internet economy. They did this country by country, e‑friction analyzes. It's quite interesting but what I would like to say here because we don't have much time on it and I'm not going to introduce this report right now, they are concentrating on four areas. It's about four types of friction that any society, you know, is going through. So I would say any policy in Africa today should certainly begin by adopting this sort of four tracks of frictions.
Let me quickly cite those frictions where you may have friction. And friction of course prevents you from moving forward. Of course the first friction is what they are calling the infrastructure. And it was quite clear for the figure they are showing that countries that have I mean, less friction in terms of infrastructure, those countries were actually doing well. Number three is about industry. If the e‑friction in your industry is higher, of course, you are not making any progress.
And if you consider African countries today, let me give you an example. Today Africa is having close to 10 to 12 of these submarine cables around the continent. Connectivity is no longer an issue, if you see the figures, the capacity we have today. But still the friction there is. Because of those 12 kind of cable that have been up in Africa, how many of them were let down by African industry? How did the African industry profiting from this? How many ICANN private sector is part of, you know, the building of those cables? These are some things we should question. I think apart from South Africa and to I think government of Kenya that invested on those cable happening so how do you beep up your own industry in that regard?
This is second type of friction. The third type of friction is the individual. Individuals you should gauge how the individual is coping with these technologies, meaning are we having, you know, facility access? Access of course connectivity. But access to data, to information. How are we doing when it comes to that? And there again, in most places in Africa, yes we do of mobile telephone, wonderful. But how are people really assessing and what are they doing with this? What are the applications? But these are interesting but we still need to scale up those. How are we doing and to have more and more services and application for the individual. So we are having so many frictions.
And the final category of friction is the information itself. You know, we should also get into ‑‑ we should be in a position to better organise this data we are having in Africa. If you consider this report, for instance, the few African countries that have ‑‑ meaning where they were able to collect that information, where they are following South Africa, Kenya, Egypt, Nigeria, and the rest are non‑visible in the report. And when I poll the question why, they told me well we couldn't get information.
We sent requests everywhere but people never came back to us. So of course you cannot get it. And even places where we did have some information, Kenya. And I remember the minister of – sorry, of Nigeria, the minister of Nigeria when we were there and talking about the report he would say well I'm excited because although my country provided some information, you are putting my country in the back of the list. Well we do have the impression we are doing more than what you are saying here. And we said there you go. Certainly you need also to organise your own data at some point.
So I don't want to take much time but I believe that those frictions are there. We need to consider them when it comes to policy development. And definitely it's all about being inclusive. It's all about seizing the right opportunities. I don't have time to also talk about the DNS business which is something we should be doing. If you go through the figures today of cTLDs the way are being managed, the numbers we are having it's quite funny because you're not doing well, and we are doing nothing of cTLDs.
So business development component is missing there and I think we need to work out of those things. But of course I will stop here and be ready if you have any questions. Thank you, very much.
>> MACTAR SECK: Thank you, Pierre. (Applause) I'm going to have another view from the private sector Mr. Jimson about policy issue and market access.
>> JIMSON OLUFUYE: Thank you, very much. Good morning, everyone. My name is Jimson Olufuye. I'm the chair of the Africa city alliance. This is a private sector led organisation coordinates players especially in the business sector across Africa. That is part of my responsibility. My day job is I run an ICT company. In fact if the Internet collapses, God forbid, I'll be out of business. So as an SME before I delve into that question of policy and market, I would like to use the opportunity to say the notion that business is not interested in participating in discussion across spectrum of IG. It’s not true. Business very much interested.
In fact in 2012 Africa was set up to engage and we were ready to engage but we need to understand that such organisations need to be encouraged. During the time of Internet development USG give a lot of encouragement to order sectors to start and today they are quite developed with global business is able to participate but developing businesses are coming up so they need to be encouraged. Then on the main focus of the discussion, yes, of course Andrew talked about policies direction for anything in life.
So policy that to empower the people to improve their living standard is very key so appropriate policy was very important. And policy framework crafted in a multistakeholder, you know, model, or approach, will surely fill the market. So whenever policymakers are crafting policy they need to have the markets in mind. So example especially in Nigeria where you know the details ten years ago or a little more than ten years ago teledensity was 0.5%. 30% of Nigeria are now on the Internet and the figure is growing by the day.
More policy framework, helping to promote the use of the Internet like the policy of the central bank of Nigeria where Andrew talked about payment system, you can actually get paid right away. You can get paid right away. There's a new policy that started yesterday in Nigeria about if you write a check by tomorrow, there's a policy rule you give somebody a check by following this so this helps business, seriously. And I must commend the government of Nigeria for that.
The programme plan is also very good. The honorable minister has pursued it vigorously. In doing that we see how she is encouraging collaboration with the sector of governments, with the local governments, state governments, going to taxation, taxing everybody, all the players. She's driving the process of let's trim-line taxation, let's reduce on the investment. So they are listening which is really a good thing that we are seeing and that is driving affordability. The other issue is quality of service which also helps. We have a lot of work to do on that. You need to take that seriously.
And also the parliament, the parliament in Africa so to speak of not really giving attention to appropriate legislation to help governmentize Internet penetration and it's pushing to economy growth so I would like to use the opportunity to call on the parliaments in Africa, especially in Nigeria to focus more on this cybercrime is on the increase, it has to be mitigated. And also direct intervention of the development agency needs to continue. There is this universal service provision form that's being used to provide access into regions in the south areas. So this needs to be done with proper accountability and transparency. This is very important to ensure that there's value for money, return on investment meant. Proper return on investment.
Also security, as I said. Apart from the legislation we need to create the assurance that when we are using ‑‑ paying online, that there was a government official that I was talking to recently that said well you need to pay me. You can just do your transfer online. I said no, I have to write you a check. She said no, I'm not going to the Internet. So we have such pockets of resistance and it's when there's more assurance that it's secure that we can kind of increase participation. So basically we need to streamline our tax policies. The broadband policy needs to be vigorated. Countries invested a lot in satellite. We are not seeing much out of that so we need to focus on how to use that to reach on the south areas.
And then a policy is very important. Okay we don't want to reduce the amount of paper right now we still use a lot of paper. At least in sectors in Nigeria or Africa. So we can reduce it and that will help you a lot. Finally continuous engagement is very important as we are doing. I want to thank UNECA for this programme. We need to organise more. And I want to use the opportunity to invite to you another programme we are working on coming up in November 3rd to five where the private sector wants to engage also with the government. And of course Civil Society as part of our second summit that has been graciously hosted by the government of Egypt. And it's the ICT organisation for Egypt. So the theme is (?) Smart Africa. We need to en age all sectors come together and discuss the issue. Thank you.
>> MACTAR SECK: Thank you, Jimson. Mr. Andrew has to leave soon if you have of a question before he leaves. One person on my right. Okay. One person.
>> AUDIENCE: Thank you. Good morning. My name is Nnenna, I come from the Internet. I want to come back to your five P's, power, personnel, payments and policy and pipe. Where is the big P, the people? Where is the change in mentality? I had a meeting in which someone was telling me the people here we are analog; we have an analog mind set. So how do you hack a mindset? How do you migrate mindsets? I didn't see people there and that what's all of the five P's are driven by people. Where are they in your P's?
>> MACTAR SECK: Okay.
>> AUDIENCE: First of all I would like to thank all of the panelists for their interesting presentations. I have two questions. In what specific ways does Civil Society in Africa in general and in Europe, particular countries, promote the use of ICTs? And my second question you mention about universal service fund as a tool for remote areas but quite recently there have been lots of criticisms regarding universal service funds efficiency in this regard. So I wonder if those USF's were successful in basically reaching their goals. Thank you.
>> (Speaking foreign language).
>> MACTAR SECK: Okay, that's fine.
>> AUDIENCE: Okay, great.
>> ANDREW: Nnenna, great question and you're absolutely right. People is the P that underlies all of the other P's on some level. People are what is driving demand; people are our personnel, right? The P that is mentioned later in this presentation that I think is the crucial one is partnership. Because when you're talking about the movement from an analog mentality to a digital or quicker thinking mentality I couldn't agree with you more, it's a wonderful way of stating it.
Partnership is the only way we are going to get where we need to go in part because people are at different levels of their understanding and because so many people whether they be in Civil Society or the private sector are still relatively newer to the web. We are only going to have a safe web if we work together to make sure people know how to surf safely. We are only going to make money if we know how to sell to each other and are comfortable with that kind of thing. I think partnership is a huge piece of it and we do need to change our mentality, that's absolutely crucial.
To the question from the gentleman about the Civil Society promoting ICT, I've actually been very, very impressed by the number of programmes and the quality of many of the programmes across the continent looking specifically at Africa, the efforts that have been made. The challenge is scale, because when it comes down to it, UNDP, a number of these bilateral donors, they touch a number of small people at a time. If we want to reach a critical mass we need a much more sustainability of capacity building. 10 or 10 years back when I started to go in my travels to different countries and we can see places, use a computer, have printing and get your photo taken and all of the things you needed for administration of daily life which in the global North we may have in our own offices and many people don't. That kind of ‑‑ almost like a franchise.
Also the franchises you see around learning English or office skills, that needs to extend much more into the ICT world so that's a business that people get into. I think when we start to see that and people will pay for it. There's no question in my mind. But when we start to see that we will start to reach scale. The other thing that I think will be very, very important is as data becomes cheaper and as it becomes easier and easier to access what you will see is more self‑training on these devices.
So it may be things like can academy but more basically aimed at how do I use this new tool? If we are going to have the catalytic impact that I think we would like to have, I hope we will see more of a combination of face‑to‑face training which is expensive with a follow-up that was ‑‑ it's more self-driven. When you are standing in line, waiting for your bus to come, you can become smarter in technology using the technology that's already in your pocket. Great question. Thank you. And my apologies for having to leave.
>> AUDIENCE: I would like to remind ‑‑ and one more question, if I may. I wonder still it's not a surprise that lots of countries in the Africa continent are low to medium income countries. And I wonder what kind of incentives do your governments initiate in order to promote demand for high speed Internet for broadband? Thank you.
>> MACTAR SECK: We are going to ancillary. Now let me give the floor to Ayell (phonetic). We will continue in our policy now. I would like to highlight some issues about the ecosystem, the business ecosystem in Africa. And also some idea on to build the capacity. I think it's very important in the approach of ICT strategy to promote job creation, even to increase the growth in Africa.
>> AYELL: Thank you, very much. I would like to address this from a completely different perspective. As someone said economy doesn't lie. Right now Africa consumes more than 80% from outside. Meaning its import. It is not surprise that in the digital economy we are seeing the same pattern. So I think the reflection must start from them. But we have a unique opportunity with the digital era which is the mobile revolution. How do we use that opportunity to change locally? And I think that is the fundamental question. And for making that change, I think we need to ourselves in term of policy, in term of capacity building, think innovatively on how we build our business model locally.
How we engage policy makers so they really nurture a business ecosystem that really embrace Internet ICT generally. Generally there are many countries who have ICT strategies, for 10, 20, 15 years. But one of the things that lack from those strategies globally is the holistic approach to ICT and development. Usually those strategy are more focused on how do we develop access, how do we add connect rural area, et cetera. But it doesn't touch on all the different elements of economic development in a country. And the implementation as well usually does not involve all the stakeholders that are key for economic development. We are still a consumer of the Internet. We are not actor of the Internet.
We are still consuming the Internet. We cannot talk about the digital economy if we do not produce locally and encourage consumer locally to consume because business local business can only grow if they can sell, if they can have local consumer. But right now people are using mobile, they are connected to the Internet but what do they do? They do Twitter, they do FACEBOOK.
So how can we help local business to develop product? To develop services that are really relevant to our comment locally? So policy matter, policy matter. We need to be ready to have progressive and reasonable liberal policy. We have to not to be afraid of this new era because it is a norm for many of us. So being restrictive will not help because we need to explore and diversify. Capacity building is key as well because it is a new era again. I usually say if you look at many African countries going back to policy, regulation and all, also the people who were involved in regulation in Africa come from what you call telecom, telecommunications school. They have been trained to do that.
But when it comes from the Internet, where are they coming from? Where are we going to find them? How do we formalize the capacity building in the Internet area? It has to go beyond the workshop, it has to go beyond the one‑week workshop but it has to become a very formal capacity programme in a very broad scale. Because it is a new era, because it has several implications all over. Business has to not only be local but policy has to help businesses which are developing in Africa to extend beyond their border. And that is also very fundamental. The e‑economy, ecosystem has to be built and it has to be build taking into consideration, local opportunity which is model.
We have this unique where we have more than 100% penetration of model, hundred% of doing business with everyone that has a model phone. How do we think that through when we approach ICT technology? Internet is one thing, having a cable is one thing but how that is infrastructure reliable? How do we ensure resiliency, how do we optimize the path of the traffic in? How do we ensure what the traffic on the Internet is effectively secure? All those things contribute to make people confident doing business online and that has to be part of the strategy as well. I will stop there and make have other questions.
>> MACTAR SECK: Thank you.
As you know we can talk about economic growth, we can use ICT to develop Africa but the fundamental is to have the infrastructure. I would like to ask you some questions about infrastructure in Africa. Also access. But when you look at the access, the content for African continent is around 1% around the world compared to other countries. Also the access in broadband is very low. Could you tell us what kind of policy we should make in Africa to increase access and infrastructure in Africa?
>> MIKE JENSEN: Thanks, Mactar. My name is Mike Jensen. I'm an ICT consultant working with private sector governments and NGOs on a technical and policy level on the Internet projects mainly in Africa. Looking at the issues around Internet from a right's based perspective, not only in an access level but also in terms of the content and the use of the content and the access to the content ‑‑ I'm going to be focusing on the first two P's, mainly the Ps but also the power is a key component and it's realized that the two need to go hand in hand to ensure that we can get the most in terms of economic growth and development from the potential of the Internet. So just to give you have a rough background of the status right now we see about probably by the end of this year about 200 million people on the continent of Africa using the Internet. So we still have quite a long way to go ‑‑
Again, use or access to the Internet is not necessarily an either/or or an on/off concept. And that's one of the reasons why the association for progressive communications is a member of the alliance for affordable Internet because affordability is a key aspect. But just to give you an idea where the growth is going between 2002 and 2007 each of the major continents had about two terra bits. In general terms it gives us a broad guide to how well the Internet is being used. Since 2007 to 2012, the average international is grown to about 12 terra bits on every continent. We can see there's been a massive growth in use around the world. In fact Africa is the fastest growing region in terms of its use in the whole world, growing at about 50% a year. And this is predicted to reach about 17 terra bits by 2019. Now just to give you a perspective on that extent of use that 17 terra bits of international capacity is actually about the same amount of capacity that is in use in Canada or was predicted to be in use in Canada by 2019. So we have got a population probably about less than 10% of the population of Africa using the same amount of capacity so it gives you an indication of how far we to have go. So what are the constraints that have been causing this business disparity?
As I mentioned the cost of the service is a key factor there. Not only is the cost a particular issue in Africa because of the economies of scale, the low income levels and the general enabling environment is such that the competitive environment is not forced the prices down to the extent it has in other parts of the world where the Internet markets are more developed. We have also got limited coverage of networks which especially excludes the rural areas. And then we also have unreliable services. I think this is an important point because this stops people from trusting in the Internet day‑to‑day dependability and therefore they use it less for if most important functions.
We have also got inappropriate interfaces which increase barriers to entry pause we of interfaces in person language or with design guidelines that may not suit the average person living in rural Africa, for example. And of course lack of relevant content reduces demand. We also have services that are not designed for people with disabilities which then again exclude millions of people on the continent. Lack of ICT literacy and lack of facility which is a tool to augment access. And I think these factors all have very significant side effects. If we are seeing that the average cost of accessing broadband in Africa of about half the person's income, then of course you can see that very few people can actually afford to use the Internet in any extensive fashion.
And so the low speeds also make it infeasible to use or to take advantage of the potential for the Internet to provide immersive multimedia learning tools or to carry out certain types of high data research and for use in commerce and entertainment. When you combine a metered service with the Internet use there's long conservancies about the loss of use, especially among those with low incomes ‑‑
Another indirect factor that we should take into account that is slow networks steel people's most valuable resource; they're time, so they use the Internet less because it wastes too much time. Applications are not used because they are not developed because they cannot reach enough people to make it really worthwhile to invest in their development. Governments find it harder to justify developing e‑government service because they cannot reach a significant portion of the population and of course the private sector will focus only on the development of applications for urban areas where coverage is good.
There are a number of missing fiber optic links. We also have a number of monopoly international submarine cable landing stations. Again we need two or more independent submarine landing stations to drive prices down and ensure a liability of services. We don't see that much fiber being deployed on alternative infrastructure such as the roads, energy grids and water networks which are very key areas for reducing the cost of infrastructure deployment when you consider that 90% of the actual cost of deploying fiber is in the civil works. So if this is already done through these other sectorial networks this can make it much more economical to deploy into the rural areas and develop competitive networks.
We also see a lot of congested microwave links for mobile base stations as the demand for broad band goes and there's the limits ability of infrastructure to transport the traffic back to the central switches. We also see more Internet connection. Less than half of the countries in Africa have Internet exchange points which are a vital component to ensure that local traffic stays local which reduces the cost of transporting traffic over expensive international links and improve the latency of the conditions in the Internet infrastructure which is a very important component in rolling out local content services and we don't see very much interconnection between IP networks and the traditional voice networks so it's difficult to justify investing in areas where there is no coverage, where people can't use the voice services as easily as they can, the data services.
So in terms of the policy constraints we see market dominance by the incumbent telephone operators as well as the mobile networks which are still holding on to their franchise in terms of being the dominant players on the market now and resisting the introduction of new smaller players and new technologies. We see high cost of licensing for small operator appears few tiered licensing regimes which allow licenses for smaller areas in the country. Most licenses are focused at a national level when we could have municipal ‑‑ so many operators have to duplicate the infrastructure and that increases the cost of its use and the cost of deploying it and limits the ability to deploy networks. And as was mentioned by someone in the audience, limited effectiveness of universal service funds. This is improving of late. I think a number of lessons have been learned by the problems that have been faced in the past and there are some more effective funds emerging and Nigeria is one of the more notable ones. Additional policy constraint is the limited available of radio spectrum. Restrictive or expensive licensing fees or limited interest in using new technology such as TV wide space and cognitive radio.
We still see high taxes on access services and equipment. One of the fundamental features here also is many countries of good policies but they have limited capacity to enforce those regulations. High cost of right‑of‑way is an issue we heard yesterday how 70% of the cost of deploying networks in Nigeria in the past used to be the high cost of getting paying the states for being able to dig. And investment in electricity and infrastructure is key. And public access facilities we need to have alternative vehicles for those people who have high cost low Bandwidth mobile links to have a safe space to gain access to immersive multimedia materials. And the final fact of being better investment in human capacity building. We need ICT literacy levels from primary schools to secondary and tertiary levels. Thank you very much.
>> MACTAR SECK: Thank you, Mike. Now we are running out of the time. We have 20 minutes for discussion. I'm going to open now this discussion. You can ask your question in French or English as the panel can answer. They all speak both English and French. (Speaking French) Okay. Wait.
>> AUDIENCE: I have a very short question about universal access fund. What projects are going to pursue in Africa to utilize universal access fund, which type of projects?
>> MACTAR SECK: Jimson you can answer that.
>> JIMSON ALOUFI: Thank you very much for the question. Really the USP fund is supposed to be a development fund to intervene to insure that everybody of access to the Internet. But you're rightly correct in many spheres it's not been quite successful but in Nigeria, yes, we have some success stories. It's being deployed to creating tele centres in communities. There are many in Nigeria, about 700 local governments and so far at least in the local government headquarters the tele centres, Internet connectivity being installed up to about 300 headquarters. And but the question that we ask is we need to see more transparency, more accountability. And that is the next step of concern. And then with the broadband plan of the government, yes, there's also plan to use it to provide fiber link to underserved communities where the private sectors are not really willing to go to.
And also to provide an open network framework, open network where some provides can use that to provide service. Because right now investors they have their own pipes so they have the right to use their pipe. So that's by using USBS form to create a network infrastructure where any player can use, that will reduce costs and that will promote affordability. Then to your question about what is government doing to encourage the private sector as many are low income countries, yes, really, like the cashless policy talk about encouraging Internet access, encouraging demand size, and also incubation system like there's a programme the government of Nigeria started talk about you win, okay?
So creating the competition among youths, you have innovative product, bring it. Your entire product. There's competition. And the president himself comes to give award to those that have been selected by the government and give funds to start and it's been quite very good. Also e‑agriculture. They are also empowering the farmers to exchange information, know when fertilizers arrived. So this boosts productivity. Also a lot of people have been saved because people can now confirm that this particular medicine is authentic. Before a lot of fake drugs and people died because of fake drugs but that has nearly been eliminated because of government policy in that sector. So we need more such policy to promote the demand and the particular development funds knees to be used well. There has to be proper auditing and an accountability process and that will help enhance the USB fund but it's good.
>> MACTAR SECK: Thank you.
>> Just a couple of additional points to that very good explanation of the Nigerian fund. I think one of the particular lessons there is in contrast to some of the earlier funds which you've acted independently to do their own assessment of where there is needs, the Nigerian fund works very closely on trying to objectively analyze where there have been gaps and there's been a big effort to carry out a mapping process to identify where the public institutions are and where the population is to identify the priority areas and they have taken a cluster‑based approach. At the same time with the fund has done which is a fairly new effort is to focus on coordination with the project of the other line ministry sectors.
So for example as Jimson mentioned, in the agriculture sector they have looked at that programme for fertilizers that the agricultural ministries is rolling out and they have asked and work with them to determine how they can assist that particular programme. Similarly in the health sector with priority development of clinics they have focused on supporting those particular areas in terms of the rollout of the health system. Finally, an interesting lesson from Senegal where the assessment of the universal service fund there determined that electricity was actually a bigger constraint than any ICT infrastructure so the fund can actually be used to assist in terms of renewable energy deployments in these areas without any electricity. Thank you.
>> If you can add something on the new innovation. On the universal fund in Senegal. Mali.
>> AUDIENCE: (Speaking French).
>> MACTAR SECK: (Speaking French).
>> AUDIENCE: (Speaking French).
>> MACTAR SECK: You have something to add?
>> Thank you very much. I wanted to do something on this but also come back to the question about contribution of Civil Society because I think it was quite great. Yes, Nigeria, yes, I like the case because I actually met with administer of agriculture and what they are doing is quite wonderful in supporting the whole agricultural service and using ICT. But I also think that Senegal is good because the idea was to solve the issues of power. But how this was done I think we should revisit this actually, because there was not a decision that came from a vision. ‑‑
Now I want to share with you this thing in West Africa at least we know that this universal service fund is there, it's not being used actually. But it's not being used because of issue pertaining to governance. And so for lack of strategy project, the money is sitting there, and the companies have contributed actually. Now how do you govern ‑‑ how do you administer that fund? Just one word on the Civil Society. I like your question and the reason is that I think we need to figure out today which role Civil Society plays. I don't think it's just about preaching good practices to policy makers. Within you discuss with policy makers they are looking for solutions.
And in a few places I noticed in Africa the way cities are being managed, it is a headache. So where is Civil Society on that? This is an example that shows that Civil Societies should not just preach those things, tell exactly to policy makers how those things should be managed, how they should self‑organise. And the other thing I think is missing in Africa is the link between Civil Society and the business sector. So we should find a way which we talk.
We demonstrated it's important for them to be part of this and also important for them to do a few things. I think this is what we should be doing. I think we tend to be preaching too much on those things. People are looking for concrete solutions. And I will like to finish with that this is something we haven't touched on here. We have plenty of young generations that are developing in Africa. But what are we doing once they got one price here, another price here. What happens to them? How do they start business? So what strategy funding do you have there to assist them? These are the issues. Thank you.
>> AUDIENCE: Thank you so very much. I'm interested in the universal access funds. I was in Nigeria which is my original country. They said you cannot own a project; the US cannot be a project bearer. They can contribute to projects and all of that but it cannot own a project and implement it, which I found interesting and disappointing. Since we have ICANN Africa, I would like to recommend that we do a proper independent study of USF in Africa. What is the legal status? Who did they report to? They won't tell us how much comes in every year but let's get an idea. Nigeria is a big economy and I think they must be making the most money.
What is the vision? What is the plan? What are their working methods? How is it managed? One of ‑‑ no, let me not go too far. Somebody lost a job because he or she refused to give accent for universal access funds to be used for military purposes in an African country, is that correct? So I think we can produce a quality study between now and next year about how universal access funds and maybe make clear recommendations. I'm so saddened to here Pierre say that money is there and cannot be used. In the Africa I live in, seriously? Huh.
>> AUDIENCE: Thank you for the excellent introduction by the panelist. My name is Juan; I'm from China, industry and information technology. Here I would have specific question. My ministry is responsible for the combination or convergence of industrialization and information, maybe ICT. And China has also launched a can of national strategy that we just promote industrialization process by ICT technology. And so here I have ‑‑ and in China we are also interested on the final cooperation with Africa countries, ICT as well industrialization. So I have two questions. First, is the situation of Africa on the industrialization promotion for ICT technology? Just now there's no penalties to give specific introduction on these sectors. Question two is about the partnership development consideration of African on the ICT sectors. Just now some panelist mentioned this topic but I want to know more details. Thank you.
>> AUDIENCE: Hello, everyone, I'm from Intel. We are in Turkey. I will give an example from my country from Turkey for the universal service fund. Eight or approximately ten years ago Turkey started to use the universal service fund for education programmes, for and the Turkey connected all the schools, 40,000 schools with broadband by using the universal service funds. Ten years ago the broadband penetration in Turkey approximately ‑‑ it was lower than the 5%, now it reached to 35%. And the effective usage of universal service fund for the education programmes and played very important role to increase the broadband penetration and now Turkish government started to distribute it competitors, lap‑tops, to 16 million students free of charge. You can imagine how this will increase the broadband Internet rate in Turkey. Shortly it's very important to use the universal also affectively for the ICT in education programmes and there are two important factors for the success of in Turkey. The political support at the top level from the president prime minister and the coordination between different ministries is very important for this programme. Thank you.
>> AUDIENCE: Hello, thanks for the excellent panel. Switching from access to literacy and use, one of the panelists mentioned that one of the big problems in Africa is there are a lot of small businesses, businesses that have access to the Internet but don't know how to use it so I was wondering if panelists had any suggestions to increase small use of business in Africa by the Internet.
>> MACTAR SECK: I think they have just now five minutes okay. I'm going to give the floor to the panel.
>> AUDIENCE: Thank you very much. I think your question about the SMEs is policy one could put in place. And this report I was eluded to in my presentation really shows if you reduce these e‑frictions in terms of infrastructure, in terms of good policies, those who really benefit from it and especially from developing countries should be the SME's so this is quite clear. But I think in a few places what is happening they do have some incentives, you know, for those SME's so they are able to use those things. Also if government and back upon what we are calling this, e‑government, well definitely in the procurement becomes high, then government really is also creating ground for SME's to contribute. So when you do have strategic programme projects, this also really helps capacity to SME's. But also we are yet to find kind of innovative funds. I don't understand quite much how to assist those who are in the ICT sector.
For instance, in Africa today we do have 5 to 7 to eight registrars, accredited registrars, ICANN accredited. So they cannot even receive, you know, they cannot be covered by local insurance companies. So what they end up doing is just sending dollars outside Africa to be covered. So good policy will be to take care of those. So incentives and special financing mechanism could also help. Thank you.
>> AUDIENCE: I will just support what Pierre has just said. I would just add one critical element of using ICT for development in Africa. Right now in many developing countries public service are provided by government. E‑government project in many countries in Africa are very, very at the very innocent stage. Government can be able to understand the impact of policy and the impact of ICT if their own networks are really electronic. When governments start seeing Internet as a way of improving their service to their community, improving service to people in country, that's also helping to create an environment where governments are looking at very progressive policy in order to allow not only to use their service but also create and value business around this. So focusing on government self is also an important element in advancing ICT for development.
>> MIKE JENSEN: Just a couple of quick responses. I like the idea they want to learn what is worked and what not worked. I wonder might it be worth extending the scope, even though we are here from Africa, Africa could benefit from learning experiences in other part of the world. For example why has the universal service fund in a country like Brazil has been able to disburse the fund? There's been about $5 billion accumulated in that fund.
So yes we really need to know more about these funds and build this an awareness raising process once we have the lessons to that process to make sure all the policy makers in Africa know about what works and doesn't work. In response of the question what not do to increase small business capacity to use the Internet, well I still think they actually probably do know what to do with the Internet if they had affordable and high‑speed Internet. If you don't have affordable high‑speed Internet you can't really learn what to do what the potential is of the technology and you have such constraints in actually being able to build up local services into use the Internet to further your business goals. At the same time of course I think there could be more done to share knowledge of best practices or innovative strategies in one country in other countries not only within Africa between Africa and other developing regions. Thank you.
>> MACTAR SECK: Thank you, Mike.
I think we don't have enough time to raise all issue with the subject but it's a very interesting subject for African country and all other countries also. But let me try to summarize just to focus on key recommendation I get from the discussion and from the presentation. The first it is the government has an important role to play. The government shall encourage policy to drive affordable Internet access and service I think is very important to have affordability and access.
Also information sharing is very important. We should encourage access to information. But sometimes without information we can't define any strategy or any policy. Also the sector private sector has also an important role to play and the government should support them. Also in term of infrastructure, the contribution of the ICT to the economy in Africa is very low. The government and private sector should increase investment in infrastructure. Also there is another idea very important it is to develop a universal access fund from work for Africa. We are going to think about how we can support this initiative. The partnership also is very important collaboration between all ICT business sectors in Africa. Also we shall remove barrier to speedy establishment of business. I tried to summarize these several ideas we get and I think we are participants and I'm going to send you a draft of this report for your comment. For your information also we will continue our reflection on the subject and we are going to organise next two weeks 22nd, 23rd, September, meeting on the same subject for all African country. You are kindly invited to participate at this meeting much thank you. I would like to thank the panelists for their contribution, and also all participants for your contribution to make this session successful. Thank you.