If you walk through Nairobi on a Tuesday afternoon, you’ll notice something that isn’t very interesting in a very interesting way. Street vendors looking at the prices of Androids with cracked screens. In Kampala, mothers are using a simple SMS app to send school fees to other mothers. A farmer in rural Nigeria who has a phone that costs less than a week’s worth of groceries and gets weather alerts on it. It doesn’t look like this is a revolution. That’s probably why so many people from outside Africa keep missing it.
The story of smartphones in Africa doesn’t start in a boardroom or on a tech campus. The price drops to start. GSMA data on Africa’s mobile economy shows that the average price of a smartphone across the continent dropped from about $230 in 2012 to about $160 by 2015. That change, which cost less than $70, let hundreds of millions of people in who had been priced out before. In just two years, the number of smartphone connections almost doubled, reaching 226 million. Those are more than just numbers. Each one stands for a person who did something they hadn’t been able to do before.
What’s really interesting about this, besides the size, is what people do when they’re connected. In 2015 alone, mobile data traffic on the continent rose by more than 50%. That growth happened despite real problems, like networks that didn’t work well, rising costs, and a lack of digital literacy in some areas. Kenya, Nigeria, Egypt, and South Africa are ahead of the curve, but Algeria, Cameroon, and the DRC are also making quick progress on their 3G networks, which shows that the adoption curve still has a long way to go. You can’t look at this and not feel like something big is changing.
The money side of all of this might be the clearest sign of where things are going. This year, almost 70% of all mobile money transactions happened in sub-Saharan Africa. That’s a huge share for a part of the world that the global financial system hasn’t always helped. Kenya’s M-Pesa, which has more than 60 million active users and handles $314 billion a year, is likely the most common example, and for good reason. It works. It works in places where there aren’t many banks, addresses that you can trust, or credit histories. Someone figured out how to build for the real conditions on the ground instead of bringing in a model that was made for somewhere else.
In 2022, MTN’s MoMo platform had more than 63 million active users and $272 billion worth of transactions. It worked in Ghana, Uganda, Cameroon, and other places. Nigeria’s Paga now has more than 21 million users and can handle both online and offline transactions for peer-to-peer transfers and bill payments. The networks of agents that run these platforms—M-Pesa alone has more than 600,000 agents all over Africa—do something that a smartphone app could never do: they build trust by being present in communities that have good reason to be wary of institutions from far away.
Investors around the world seem to have noticed, but the public still hasn’t fully caught on. Briter Bridges says that African fintechs raised more than $1.3 billion in 2022, making the area the second-fastest-growing place for fintech investments after Asia-Pacific. That’s money going into a market where more than 1.2 billion people still don’t have bank accounts or don’t have enough money in their accounts. This isn’t a charity case; it’s a huge business opportunity that you can’t find anywhere else right now.
It’s still not clear if all of this will directly lead to a long-term change in the economy or if the gaps in infrastructure (like power, connectivity, and device quality) will slow things down in ways that the optimistic predictions don’t fully take into account. Regulators all over the continent are also dealing with really tough trade-offs. They are using sandbox programs to encourage innovation without letting risks build up without being checked. The Central Bank of Nigeria and the Capital Markets Authority of Kenya are both trying out controlled testing environments for new fintech models. There are real efforts to make the policy better, which is a step forward in and of itself.
In just one year, mobile services brought in $17 billion in tax money for the government and added $150 billion to Africa’s GDP. The mobile industry has created more than 3.8 million jobs, both directly and indirectly. The infrastructure isn’t fully built yet. The story isn’t over yet. But it’s easy to see where to go. Not a single person in the next billion will be from Europe or North America. There are already people here who open apps, pay for things, and quietly build something that only a few people are starting to understand.
