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Bridging Africa's digital divide: The transformative power of refurbished smartphones (report)

Friday, 05 April 2024 14:34
Bridging Africa's digital divide: The transformative power of refurbished smartphones (report)

(Ecofin Agency) - The high cost of smartphones poses a significant barrier to digital inclusion in Africa, despite various strategies being explored to make these devices affordable for the continent's lower-income populations. These strategies include local assembly and tax exemptions, but reconditioning second-hand phones may present a more effective solution. This approach has already shown success in similar markets and offers significant potential for growth.

Access to mobile internet is now recognized by the United Nations as a fundamental service, akin to access to clean water and electricity. However, the GSMA's 2023 report on the state of mobile connectivity reveals that only 25% of Sub-Saharan Africa's population, which comprises the majority of the continent, uses mobile internet. Among the key barriers to equitable access, the cost of smartphones stands out prominently.

To purchase the most affordable entry-level models, people have to spend between $99 and $116, depending on quality and brand, according to an Ecofin Pro report entitled "Refurbished Smartphones: A more viable option for digital inclusion in Africa".

Local smartphone assembly has failed to meet expectations, as evidenced by numerous failures observed in various African countries over the past two decades. On the other hand, the reconditioning of second-hand phones has demonstrated a positive impact on digital inclusion in other international markets. These devices, after being cleaned, repaired, and reset by professionals, are resold.

Market Research Future estimates the global market for refurbished smartphones at $53.6 billion in 2022, $60.3 billion in 2023, and projects it will reach $154.7 billion by 2032, with a compound annual growth rate (CAGR) of 12.50% during the forecast period of 2023-2032. The growth of this market in India and Latin America even exceeded 18% in 2022.

As of now, Africa has scarcely tapped into this burgeoning market for refurbished phones, presenting a compelling opportunity for the continent's entrepreneurs and investors. Refurbishing used smartphones can act as an economic catalyst, creating jobs in collection, refurbishing, and sales sectors while reducing the importation of new devices. This approach also helps to lower the environmental footprint of the telecommunications sector: Africa alone produces 2.9 million tons of electronic waste each year, but only 1% is officially collected or recycled, according to the International Telecommunication Union.

In this context, support from African governments for used smartphone refurbishment initiatives seems logical, involving the reduction of import taxes on components necessary for refurbishment and the granting of tax benefits to companies in the sector.

Nevertheless, for Africa to fully benefit from this opportunity and develop a sustainable refurbishment industry, overcoming several challenges will be crucial, an Ecofin Pro report noted. Governments on the continent should establish an appropriate regulatory framework, develop recycling infrastructures, and train qualified personnel. Close collaboration between governments, businesses, and international organizations will be essential to overcome these obstacles.



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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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