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Africa to attract more ICT investment in 2014, IDC

Date:2018-01-18 11:49:26

December 23, 2013, 4:00 PM — Investments in ICT are expect to increase in 20144 in Africa as both public and private spending rises and local content businesses partner with larger operators and tech companies, according to IDC.

Adoption of data analytics and cloud services is expected to be a main driver of growth on the continent, IDC said in a year-end report.

"In the year ahead, business models based on mobility, internet and cloud will grow quickly but local constraints will cause this to be in fits and starts and regional pockets; the most important events in 2014 will continue to cluster around growth and innovation, built on mobile devices, cloud services, social technologies and Big Data analytics," IDC said.

Africa has had massive growth in mobile phone usage and IDC expects mobile technologies to catalyze investment, with mobile enterprise applications a leading priority.

Governments will also invest in fiber-optic cables, public services, content and governance and compliance oversight to ensure the security of transactions online.

Countries such as Kenya, Ghana, Rwanda, Tanzania, South Africa and Nigeria, in cooperation with international developmental agencies, academia and ICT vendors, have made considerable investments in ICT infrastructure and IDC expects this to benefit local startups that have had problems sustaining and running successful businesses.

One mega project is the $14 billion Konza City initiative in Kenya, expected to drive local and international ICT business in East Africa. There are other smaller projects in other countries including Rwanda, Botswana, Cameroon, Nigeria, and Ivory Coast, that IDC expects to gain traction in 2014.

In the last five years, countries have rolled out fiber optic infrastructure and IDC expects a shift in the focus from undersea cable to terrestrial fiber rollout in 2014. Telecom service providers are expected to expand their current fiber infrastructure to offer last mile, high-end connectivity to enterprises.

Companies such as Google and Liquid Telecom have undertaken extensive in-country fiber rollout across the continent, and IDC expects a surge in the supply of last mile fiber access in the region.

"IDC expects to see related ICT investments in Information Security consulting, datacenter build-out, stimulating infrastructure investments and early use cases of integrated systems, along with hosted services such as hosted infrastructure services and hosted application management," said the paper, which is based on research conducted during IDC's CIO Africa summit.

IDC also forecasts content-oriented online to grow, anchored by bandwidth affordability, competitive local hosting services and enhanced infrastructure security.

"The online subscription based video streaming service Wabona based in South Africa, and based in Kenya are two such examples; IDC expects more such business to emerge in 2014 giving a significant boost to the digital media industry in Africa," IDC said.

Telecom operators such as Vodacom, Safaricom and Liquid Telecom have invested in digital content services, and IDC expects the telecom operators to play a significant part in the content-creation drive in Africa. The will likely partner with other content companies in order to deliver competitive services.

The need for compliance with existing regulations as well as new regulations will require companies to invest in more advanced IT services, as governments seek compliance with laws governing banking for mobile money services, SIM registration and regulations established to counter money laundering.

IDC expects that in 2014, organizations will start taking advantage of advanced analytics capabilities to achieve regulatory compliance and better governance. Sixty-five percent of the CIOs who responded to the IDC Africa CIO Summit Survey agree that governance, regulation and compliance requirements, reporting, and a need for greater transparency are forcing investment in big data and analytics technologies.

Data protection is also becoming more important across Africa, with new data breach and related laws having been passed in South Africa and Ghana and under consideration in Kenya, Tanzania, Nigeria, Uganda and Botswana. Other countries are also considering data-protection legislation as more security challenges and avenues for criminal activity emerge.

Meanwhile, international tech companies are playing a role in the development of ICT in Africa by setting up regional offices and contributing to training and skills. IDC expects this trend to continue in 2014.