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World Bank shifts focus to West African telecom

22 May 2009

Michael Malakata

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The World Bank has turned its focus toward telecommunications in eastern and southern Africa to West Africa, agreeing to set aside US$50 million for ICT infrastructure development, connectivity, skills development and capacity building for Nigeria.

The funds come less than seven months after the bank gave $424 million for the development of the eastern and southern Africa communication infrastructure.

"The key intervention in Nigeria includes connectivity, infrastructure development and the outsourcing sector," according to Ismail Radwan, a senior economist with the African Finance and Private Sector Development agency.

The World Bank is confident that a wider application of ICT as well as the popularization of business process outsourcing could lead to a significant transformation in the region's societies.

Nigeria is recognized as the largest ICT market in Africa.

With the World Bank funding, however, Nigeria will further consolidate its position as the hub of ICT development and the largest ICT market in Africa, which would attract investment by international telecom companies.

Nigeria's continued growth over the next five years is expected to trigger more competition among a growing number of networks in the West African region.

Last year, the Nigerian telecom market grew by 23 percent, generating $8.4 billion in overall telecom service revenue. Nigeria is the most populous country in Africa, with more than 140 million people.

Since the liberalization of the market in 2003, Nigeria's telecom market has experienced an exceptional growth rate that is attracting new operators more than any other country in the region.

However, the World Bank wants all the African economies to be transformed through the development of ICT and increased investment in the telecom sector.

The Rwandan government is using World Bank funds to develop a national capacity to provide broadband services with the hope of reducing the high cost of bandwidth and communication. The financing is also expected to increase the volume of international bandwidth in the region.

The World Bank announced the program to fund African ICT infrastructure development in 2007. More than $164 million was allocated to Kenya, Burundi and Madagascar as part of the first phase of the program. Other eligible countries in the region will join future phases of the program on a "readiness basis."

The program was created after calls by various governments in the region requesting funding from the bank for telecom infrastructure development.

The fact that the region only accounts for less than 1 percent of the world international bandwidth is something that needs to be changed, according to the bank.

By the end of the project, the bank said major cities across the region would be linked to competitively priced high-bandwidth connectivity. The lower prices of international connectivity is expected to decrease the cost of doing business and increase private sector investment opportunities in the region.

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