SMU economist Isaac Mbiti has seen in his native Kenya how cell phone use in Africa is booming. Some say it will transform the continent. However, Mbiti’s latest research reveals that cell phones alone can’t drive development. Still critical is a regulatory environment to foster use, plus roads, water, electricity and education.
The fast-growing use of cell phones in Africa, where many people lack the basic human necessities, has made headlines worldwide the past few years. The surprising boom has led to widespread speculation – and hope – that cell phones could potentially transform the impoverished continent.
But new research by Mbiti and Tufts University economist Jenny C. Aker finds that cell phones, while a useful and powerful tool for many people in Africa, cannot drive economic development on their own.
Mbiti and Aker say that while there is evidence of positive micro-economic impacts, so far there’s limited evidence that mobile phones have led to macro-economic improvements in African countries.
Cell phones can do only so much, say the researchers. Many Africans still struggle in poverty and still lack reliable electricity, clean drinking water, education or access to roads.
“It’s really great for a farmer to find out the price of beans in the market,” says Mbiti. “But if a farmer can’t get the beans to market because there is no road, the information doesn’t really help. Cell phones can’t replace things you need from development, like roads and running water.”
Mbiti and Aker will publish their findings in the article “Mobile Phones and Economic Development in Africa” in the Journal of Economic Perspectives. The Washington, D.C.-based Center for Global Development, an independent nonprofit policy research organization, has published a working version of the paper online.
To really have an impact, say Mbiti and Aker, the cell phone boom requires complementary access to public infrastructure, such as reliable electricity. “Also needed are appropriate policies and regulations that can promote the development of innovative mobile phone-based applications such as mobile banking services that have the potential to positively impact the economic livelihood of Africans,” Mbiti says.
The researchers also cite areas where more research is needed, such as the number of direct and indirect jobs created by the cell phone industry; whether mobile phones actually drive increases in gross domestic product; accurate mobile phone penetration rates; and whether cell phones are driving consumer surpluses due to increased market competition.
Written by Margaret Allen
Above, a neighborhood in Addis Ababa, Ethiopia.