Technological advances can allow countries to skip building out traditional infrastructure
Africa provides one of the classic examples of technology trumping traditional infrastructure. The introduction of mobile phones has allowed millions of Africans to receive the social and economic benefits of telephone networks without the sunk cost of massive landline infrastructure. They have effectively “leapfrogged” an entire stage of development, going directly from little or no telephone service to the same, efficient technology used in developed countries. That’s changing lives around the world.
Since 2011, due largely to rapid adoption of mobile phones in developing countries, about 700 million people have become account holders at banks, other financial institutions or mobile money service providers, the World Bank reports. Mobile money, or using a phone to transfer money and make payments, has been perhaps the most powerful tool for bringing the unbanked into more formal financial activities. One of the most dramatic examples has occurred in sub-Saharan Africa.
While fewer than a quarter of Africans have bank accounts, 40% have a mobile phone. That’s made the continent attractive to mobile-payments businesses, such as M-Pesa, which handled $45 billion in transactions for the year ended March 31, 2015. M-Pesa is owned by Safaricom, the Kenyan subsidiary of Vodafone Group PLC, the global telecom company. Indeed, in sub-Saharan Africa, there are about 25,000 mobile financial accounts per 100,000 adults, about six times the global average.