Infrastructure is intrinsic to development. It is the foundation upon which social and economic development is built, the critical support network for enabling innovation, developing new markets and delivering services key to improved quality of life.
As one of the UN’s seventeen Sustainable Development Goals, goal nine (known as SDG 9) highlights the role of infrastructure in providing the basic systems essential to the operation of societies and businesses, enabling industrialization and innovation to drive productivity and economic growth, job opportunities and engagement in the knowledge economy.
In today’s fast-moving world, all infrastructure depends on information and communication technologies (ICTs). Global, national and local infrastructure is controlled, managed and optimized by ICTs, whether power networks, water supplies, transportation systems or communications networks. Broadband ICT networks are increasingly critical as they represent the superstructure supporting all other infrastructures, industrial processes, socio-economic advancement and human development that follow.
Broadband networks, whether fixed, mobile or hybrid, kick-start development with a positive direct impact on economies, improving efficiency, communication and the circulation of goods and services, as well as the creation of new business, markets and innovations directly linked to access to online resources and the information economy – especially important as a catalyst for the growth of small to medium size enterprises.
So if we are serious about achieving SDG 9 we need to look to expanding and extending broadband as the first principle of infrastructure development. Far from being a luxury for the industrialized world, it can be the very backbone of successful development for emerging economies.
Nowhere does this hold truer than in Africa, home to a significant portion of the world’s four billion unconnected. In many parts of the continent, agricultural and traditional sectors remain dominant. The growth of industries, economies and societies through sustainable development is limited by an enormous infrastructure gap – a gap which can only be closed by targeted, extensive investment in broadband networks.
Yet precisely here, where it is most needed, investment is scarce. Outside of densely-populated urban areas, topography and demography often defeat market viability. Even within cities, low incomes, lack of consumer demand or education, and complex government regulations often inhibit private sector investment. Human capacity lies untapped for want of investment; and the gap between the poorest in many African nations and the wealthy of the so-called developed world threatens to deepen into an unbridgeable divide.
“Government is the single most decisive stakeholder in pushing infrastructure build-out and broadband deployment throughout Africa.” – Houlin Zhao
The central challenge to deploying fast, reliable, broadband networks is investment. Beyond this lie the complex demand-side issues of providing affordable devices, capacity and training; driving adoption through the creation of relevant content and services in local languages; and ensuring adequate sustainable power supplies.
Government is the single most decisive stakeholder in pushing infrastructure build-out and broadband deployment throughout Africa. Where the market cannot or will not go, government policy must take the lead – whether directly, through the use of fiscal, regulatory or policy measures, or through creative partnerships between public, private and civic sectors.
The critical conundrum for government lies in the balance between taxation and fiscal incentives; between benefiting from predictable, easy tax revenue and fostering large-scale investment in infrastructure; between the enormous positive impact of ICT and the wider needs of society as a whole.
In parts of Africa, in particular where tax bases are narrow and collection mechanisms not always efficient, up to 25% of government income may be drawn from taxing the ICT sector. ICT is a stable, regulated and structured industry than can easily be tapped to balance public sector budgets. But there is a very real risk in the knock-on effect of higher taxes, increasing the price of using ICT services, decreasing investment in next-generation networks, and severely limiting the positive contribution to society and the digital economy.
A more nuanced approach to fiscal policy is needed for the ICT sector to encourage investment in and deployment of critical infrastructure. Policy and regulation initiatives could include new forms of Universal Service Funds, agreements on local and national rights of way, site sharing, and license fees. Sharing or partnering with ICT infrastructure could allow deployment of other government infrastructure such as public buildings, electricity or roads. Viewing ICT as an essential part of an entire ecosystem, rather than an individual industry or isolated source of revenue, would enable taxation and business models to be combined to mutual benefit.
For this to happen we need new forms of collaboration and dialogue, both within government (between finance and ICT ministries, for example) and across sectors. Entities such as the UN Broadband Commission for Sustainable Development promote innovative collaboration within the ICT industry, as well as new public private partnership models to accelerate broadband deployment and the sustainable development it brings. The continent-wide Smart Africa Alliance puts ICT at the heart of development, working to create policy and regulatory environments to encourage partnership, entrepreneurship and knowledge-sharing.
Such initiatives are key to creating the investment environment necessary for broadband infrastructure in Africa, and to the socio-economic advancement and human development opportunities it enables.
[The 2017 G20 Summit was held last week on 7th and 8th of July in Hamburg, where more than twenty Heads of State or Government and representatives of international organizations gathered to discuss a wide range of issues of global significance.]
This article originally appeared in G20 Magazine – Hamburg 2017.