The Dalberg Report

Ghana

Introduction

Infrastructure: A leader in channeling international bandwidth, Ghana claims the fastest connection speeds in Africa. Ghana’s approach to building an ecosystem for Internet growth has focused on establishing a networked infrastructure and promoting government as an early adopter.

Usage conditions: Ghana appears poised for success, although up until recently user penetration lagged behind expectations. It currently has the largest mobile broadband subscriber base in Africa, suggesting the opportunity for domestic software developers to create platforms for the local market that may be extended to countries with much higher broadband penetration.

Activity and impact across sectors: Ghana is home to agriculture and health innovations that are regional leaders. Esoko, an agriculture information management application, sells to clients in 16 countries. MoTech’s health information platform provides a model that the Gates Foundation is investing in, intending to scale the system to nine additional countries. mPedigree’s mobile, on-site verification of pharmaceutical products has also been adopted throughout the region. Each solution has involved both the private sector and public stakeholders.

Context

Ghana is one of the fastest growing economies in the world. It offers one of the most stable and attractive business environments in the region. In 2011 Ghana recorded GDP growth of 14.4%, which slowed to 7.5% in 2012.2 Ghana is endowed with gold and cocoa and is developing its national oil resources, which will produce 120 000 barrels per day.3 Just over one-third of the country’s 24.6 million people speak English, the official language, and two-thirds are literate.

While Ghana has relatively advanced infrastructure for a lower middle-income country, it has yet to reach the infrastructure levels of middle-income countries. Over the last year Ghana has seen significant improvements in macroeconomic stability and health and educational outcomes, part of its vision to join the group of middle-income countries by 2020.

Recent elections may help define national development priorities. More than half the labour force is still employed in agriculture, where access to credit is a primary challenge.5 To address this, the government created a pro-poor spending policy, extending microloans to farmers, decreasing collateral requirements for women and promoting contract farming.

ICT Sector Overview

Ghana’s approach to building an ecosystem for Internet growth has focused on establishing a networked infrastructure and promoting government as an early adopter. But this has not yet translated into a substantial increase in access for the broader population, with Internet penetration at 9.6% of the population in 2011.

  • Ghana was one of the first countries to connect to the SAT3 international fibre cable in 2002
  • ICT for Accelerated Development (ICT4AD) was established in 2003 to provide universal access to high quality ICT services which would transform Ghana into a knowledge-based, technology-driven economy
  • Price of wholesale bandwidth has fallen from US $2 500 per mbps per month to US $297 per mbps per month over the past 5 years
  • National Information Technology Agency is overseeing a number of initiatives including eServices, eParliament, eImmigration and ePolicing, which are expected to drive significant efficiencies and access

The National Information Technology Agency (NITA) was established in 2008 as the governing body supporting the national ICT for Accelerated Development (ICT4AD) Strategy and National Telecom Policy (NTP). ICT4AD proposed using Internet-enabled technologies to transform government administration, information dissemination and service delivery, and is currently being refreshed with UN support. The NTP defines how the government intends to extend high quality, affordable ICT access to every Ghanaian and move toward a knowledge-based economy.

The strategy involves increasing competition, broadening rural access and developing eLiteracy. By opening the market to more operators through additional licensing, it aims to make telecom services available to at least 25% of the population, with 10% or more penetration in rural areas. To date, the bulk of the development has been limited to Accra, Kumasi and Takoradi. Its eCare and CIC centers provide ICT access and eSkill development, funded by a 1% tax on telecom revenues, but currently only cover a minority of the country. The government also seeks to stimulate local competition with major operators by offering incentives to connect to the fibre backbone and submarine cables.

NITA implements IT policies while overseeing the National Data Centre, Government Enterprise Architecture, Government ICT Interoperability Standards, and public sector ICT training through the e-Ghana Project. The e-Ghana Project was launched in 2006 by the World Bank to build IT Enabled Services (ITES) and e-government applications, then supplemented two years later with a $30m loan from China to construct a nationwide eGovernment infrastructure extending fibre optic and WiMax coverage to 15 cities.

The government introduced the national Ghana Interbank Payment and Settlement System (GhIPSS) in an attempt to migrate the country from cash to electronic payments, which are more easily tracked and decrease the opportunities for corruption. Slow rollout of E-zwitch compliant ATMsand the lack of explicit mMoney or eCommerce regulation in the 2008 Branchless Banking Guidelines were obstacles to the hoped-for electronic payment growth.

Market Structure

With six major telecom companies in the country, including the recent entry of Glo, Ghana’s telecom market is competitive. MTN and Tigo collectively control three-quarters of the market, with Vodafone, Airtel and Expresso each holding very low market share. The government is trying to extend access beyond the current 77% mobile coverage rate by offering tax rebates to companies extending mobile telephone and Internet services to rural parts of the country.

It is unclear which companies are taking that offer and building out their infrastructure. Operators appear content making revenue from SMS and voice, not having extended significant resources to move their current customers onto the Internet. As one of the first countries to connect to the SAT3 international fibre cable in 2002, Ghana has made the core investment in infrastructure for connectivity. Implementing cost-based interconnection fees resulted in a dramatic drop in tariffs and significant growth in mobile access.

Case Studies

  • Binu’s app platform for feature and smart phones allowed Worldreader to attract 200 000 new active book readers
  • Rancard Solutions distributes subscription corporate content acrossforty mobile networks covering 250m people in Sub-Saharan Africa
  • Mi-Life drastically lowers the cost of offering life insurance, a product accessed by only 2% of people in SSA, by selling coverage via SMS