Group+3B



Africa, the hypothesized birth place of the human race, has a diverse and rich history. Native to about 1,013,779,050 people, it is hard to believe that most of its population has some of the lowest standards of living on the planet. Our group has come to learn that communication via media technology brings people together within the global environment, ultimately giving those with access a larger reach into economic advantages worldwide. We believe that through wireless telecommunications Africa is making advancements to improve the life quality of its inhabitants.

=African Economy: Much Needed Growth=

By Daniel Hernandez
The African economy is very diverse as it varies greatly from country to country. While there are few places in Africa whose economies are developed and stable, the majority of the continent lives in extreme poverty. To show the economic diversity throughout the continent, this report will separate it in to three regions: Northern, Central, and Southern and then list economic statistics of countries who best exemplify the dissimilarity.

The northern countries highlighted are Algeria and Libya. In 2009, Algeria experienced 2.2% economic growth due, down .2% from 2008, largely in part to the 17% boom in its agriculture sector. Algeria has projected economic growth of 7% through 2011 because of a projected increase in global gas demand, the country’s main export, and a new public works program. Libya is one of Africa’s richest countries as it has “the continent’s largest proven oil reserve.” However, a decrease in oil prices worldwide led to economic performance of only %2 in 2009 (African Economic Outlook, 2010).

[[image:file:///C:/Users/Owner/AppData/Local/Temp/msohtmlclip1/01/clip_image002.jpg width="1" height="1"]]Table 1: Libya Macroeconomic indicators

 * || **2008** || **2009** || **2010** || **2011** ||
 * **Real GDP growth** || 3.8 || 2.1 || 5.2 || 6.1 ||
 * **CPI inflation** || 10.4 || 2.5 || 5.3 || 5.6 ||
 * **Budget balance % GDP** || 26.9 || 10.6 || 14.8 || 21.6 ||
 * **Current account % GDP** || 40.7 || 16.8 || 32.6 || 37.3 ||

Central countries chosen are Chad and the Democratic Republic of Congo. According to a 2009 Economic Outlook report, Chad’s GDP growth has been steadily decreasing since 2004. In 2009, Chad experienced a GDP growth of -0.8% and an inflation average of 10.5%. The Democratic Republic of Congo has a decrease on economic growth of 3.7% and a yearly average of 44% inflation in 2009. In the same year, Congolese currency “lost 45.2% of its value against the US dollar” (African Economic Outlook,2010).

**Table 1: Chad Macroeconomic indicators**
 * || **2008** || **2009** || **2010** || **2011** ||
 * **Real GDP growth** || 0.3 || -0.8 || 2.1 || 4.4 ||
 * **CPI inflation** || 8.3 || 10.5 || 3.0 || 3.5 ||
 * **Budget balance % GDP** || 5.2 || -10.8 || -9.6 || -11.6 ||
 * **Current account % GDP** || -10.3 || -31.8 || -26.7 || -22.8 ||

In 2009 South Africa experienced major economic hardships as the GDP growth rate dropped to - 1.8%, and private sector investment fell to 2.6% from 11.1% in 2008. However, economic conditions are expected to increase through 2011 due to the country’s hosting of the 2010 FIFA World Cup (Tlelima, 2009). A large decrease in global diamond demand led to economic crisis in Botswana. 2009 GDP fell by about 4% from the previous year (African Economic Outlook, 2010).

**Table 1: South Africa Macroeconomic indicators**
 * || **2008** || **2009** || **2010** || **2011** ||
 * **Real GDP growth** || 3.7 || -1.8 || 2.4 || 3.3 ||
 * **CPI inflation** || 11.5 || 7.1 || 5.8 || 6.1 ||
 * **Budget balance % GDP** || -1.2 || -7.3 || -6.4 || -4.0 ||
 * **Current account % GDP** || -6.6 || -4.5 || -5.6 || -6.3 ||

**Cell Phone Availability and All It's Uses** by Christy Chierichetti

 The declining economic state of Africa has led many individuals and their families to live in a state extreme poverty. Researchers have reported that 300 million Africans live one less that $1 a day, and 120 million live on less than 50 cents a day. Many Africans are unable to own or use a cell phone, and in some countries, less that two percent of the population has access to a cell phone. A one-minute call can cost up to 38 cents a minute, which is 40% of a household’s daily income. The cost of the cheapest phone available equals the amount of millet it would take to feed a family of five for five days (Southern Methodist University, 2010). To keep costs down, villagers will keep conversations as short as possible, and prefer to communicate via text messaging. “Flashing” (calling, and hanging up after the first ring) is very popular. This is an adapted form of communication so less pre-paid minutes are unnecessarily used up. Some users will only buy a SIM card, and borrow a phone when they need to communicate with someone. They maintain their account by keeping just enough pre-paid minutes to keep it active and receive calls. Since electricity is scarce, people recharge their cell phones by using solar chargers (Ewing, 2007). media type="youtube" key="wvvLdIz08Q4?fs=1" height="294" width="369" align="right" Cell phones have improved the lives of many with all its capabilities. Farmers are able to compare market prices for their crop; fisherman are able to find customers for their daily catch, helping to reduce the amount of spoiled product; health officials are able to remind AIDS patients to take their medicine every day; families are able to communicate and transfer money to one another; people are learning to read and write in order to send messages; political elections can be monitored to prevent cheating; and new jobs are being created that range from the start of a business to a local store’s expansion to multiple villages (Southern Methodist University, 2010).

One Village at a Time: Changing the African Economy with Cellular Devices

By Don Townsend
Cell phones offer instant connection to other people, so it is no wonder that their use would aid business to help the economy grow. Connecting people with the aid of cell phones closes geographic barriers bringing people together distances between people, so this is especially useful on the second largest continent in the world. Cell phones mean that a person can contact someone in South Africa to buy one of Congo's biggest exports such as wood or coffee immediately to complete a sale. But what about the people in small villages, what about them? How can cell phones help these people that live on less than two dollars a day with business? One non profit company, Grameen Telecommunications, was able to take loans from a bank to offer low cost cellular service in rural areas. The benefit: creation of entrepreneurs (mostly woman) who allowed other villagers to pay per use to call. These new business woman were able to reap a tidy profit, while the villagers reaped the benefits of instant communication to find jobs, or for farmers to get prices in other markets before selling produce.

According to the Article "Cell Phones may help 'save' Africa" there are several business benefits at the village level.


 * Entrepreneurs who make money by selling phone services to villages on a per use basis.
 * Sellers of prepaid phone cards including poor urban youths and small business owners.
 * Users of phones who gain business and employment opportunities mentioned above.

The benefits, which start humble in their roots, affection small villages quickly grows to effect whole countries. " 2005 study by the Centre for Economic Policy Research and backed by the UK mobile phone giant Vodafone found higher rates of economic growth in developing countries with high mobile phone penetration. According to the study, a developing country which has an average of 10 more mobile phones per 100 population between 1996 and 2003 would have enjoyed per capita GDP growth that was 0.59 percent higher than an otherwise identical country"(Butler, 2005). Cell phones can even save businesses money and increase profits even though there is an associated cost with the product.




 * 62 percent of small businesses in South Africa and 59 percent in Egypt said they had increased their profits as a result of mobile phones, in spite of increased call costs
 * Over 85 percent of small businesses run by black individuals in South Africa rely solely on a mobile phone for telecommunications The results of this study suggest that growth in the African telecom market will continue to pay off African economies.

Because of these benefits, according to the London Business School, Africa has the largest growth in cellular phones than any other region of the world.



= **Globalization through digitalization – Cell phones vs. The Digital Divide ** = by Marius Volkmann Digital technology like computers, internet or cell phones is the main indicator for technological progress, development and globalization. Because access to such technology is always a matter of a good economy and a good infrastructure, for most of the time globalization was an exclusive club for developed countries. Today whoever is able to use technology and digital devices gets improved chances for a membership to this popular club of globalization winners.

Even though computer usage has increased significantly in many countries, it is growing relatively slowly, if at all, in parts of Asia, Africa and Latin America. So while computers still seem to be a priviledge for developed countries, publics aquired cell phones in the developing world at a staggering rate. According to The Pew Global Attitudes Project, a 47-nation survey, computer ownership in the African country Nigeria increased by 11 percentage points to 16% compared to 76% in the United States between 2002 and 2007. However in the same amount of time, cell phone ownership percentages in Nigeria rose by impressive 56 percentage points to 67% compared to 81% in the United States. In digits, the mobile cellur telephone subscriptions in Nigeria went from 1.6 million in 2002 to 63 million in 2007, reported by the United Nations Statistics Divison. Overall, in Africa an estimated 41% of the people will have mobile cellular subscriptions by the end of 2010.  Africa is catching up. And on a continent where in several nations "the radio is still the number one source for information" (Pew Global Attitudes Project), people may be able to catch up on what happens around their cities and villages or perhaps even around the world, but they still can't interact with them on a regular basis. So cell phones not only offer opportunity through voice services but improving technologies that bring Internet access to phones could make the costly need for a computer for connecting to the World Wide Web a thing of the past and allow Africans to gain access to the internet. Something in which Africa still will lack behind in 2010, considering the predictions of the International Telecommunication Union which say that only 6.9% of all Africans will have internet access. A relatively small number even compared to the developing country average of 21%. According to Richard Wike, senior researcher with the Pew Global Attitudes Project, "technology fills global communications gaps and helps integrate economies" - cellular telephones prove to be this technology.

Sources: African economic outlook. (2010, March 08). Retrieved from http://www.africaneconomicoutlook.org

"BuildAfrica.org » LED Lights and 12V Cell Phone Charging Mali." BuildAfrica.org. 28 Apr. 2009. Web. 22 Nov. 2010. .

Ewing, J. (2007). Upwardly mobile in Africa. Bloomberg Businessweek.Retrieved November 21, 2010, from http://www.businessweek.com/magazine/content/07_39/b4051054.htm

Southern Methodist University (2010, August 9). Africa cell phone boom beneficial -- but schools, roads, power, water remain critical needs. ScienceDaily. Retrieved November 21, 2010, from http://www.sciencedaily.com­ /releases/2010/08/100809161236.htm

Tlelima, T. (2009, February 15). Is south africa heading for a recession?. Retrieved from http: // www.suite101.com/content/is-south-africa-heading-for-a-recession-a96457 //

// "YouTube - Kenyans with Wheelchairs Make a Mobile Phone Business." YouTube - Broadcast Yourself. 09 Sept. 2006. Web. 22 Nov. 2010.  // Butler, Rhett. "Cell Phones May Help "save" Africa." //Conservation and Environmental Science News//. 18 July 2005. Web. 24 Nov. 2010. 

Cell Phone, The Ring Heard Around the World - Cellphones in Africa : Doc Zone : CBC-TV." //CBC.ca -Canada's National Public Broadcaster//. Web. 24 Nov. 2010. <http://www.cbc.ca/doczone/cellphones/africa.html>

//Information and Communication Technology (ICT) Statistics//. The International Telecommunication Union. Web. <http://www.itu.int>

//Pew Global Attitudes Project -- International Public Opinion Polls, Data and Commentaries//. Web. 24 Nov. 2010. <http://pewglobal.org/>