Fiber-Optic Cables Connect Africa to the Digital Economy

August 27, 2019

By Devon Maylie, IFC Communications

What’s the most efficient way to connect 40,000 university students to the largest source of information in the world? A reliable fiber optic network.

“Access to the Internet is like oxygen for us. It’s critical,” says Lucas Chigabatia, chief information technology officer at the University of Ghana.

So when those students needed better access to the Internet for their research, coursework, and communication, Chigabatia launched a search for a company that promised speed and reliability. The university signed with an Internet service provider that uses an open-access network from CSquared, a technology company laying fiber cables across Africa to meet the growing demand for broadband on the continent. The installation of about 20 kilometers of cable on the University of Ghana campus has given students the speedy, dependable Internet connection they require, while reducing the university’s connectivity costs by 30 percent.

Catching up to the Rest of the World

Private investors can play an important role to help countries bridge the digital divide, especially in Africa, which is home to 21 of the 25 least-connected countries in the world. While Africa is catching up—it currently has the fastest growing proportion of Internet users—it still has the lowest levels of Internet access globally. Of the 25 percent of the population now online, the majority connect via their mobile phones and do not have access to broadband connections.

Available and affordable Internet is a prerequisite for the continent to participate in the digital economy. Such improved connectivity boosts GDP growth as it facilitates access of individuals and businesses to markets. Digitalization creates ways to scale access to services such as health and education. It also allows a digitally savvy workforce to build robust digital economies and competitive markets.

Image: Street view in Accra, the capital and largest city of Ghana.

Fiber-optic cables have the potential to revolutionize Internet connectivity on a continent where three-quarters of the population remains offline. But the technology is expensive. Just one kilometer of installed cable can cost between $15,000 and $30,000—and Africa needs at least half a million more kilometers to connect the continent.

Since governments can’t undertake a project of this scale alone, private investors such as CSquared step in to meet the demand. The company offers a cost-effective solution by deploying wholesale, carrier-neutral, open-access fiber optic networks across the region, linking end-users to mobile network operators and Internet service providers.

Since CSquared was founded in 2013, it has laid 3,000 kilometers of fiber and connected more than 40 Internet service providers and mobile network operators in seven metro areas in Ghana, Liberia, and Uganda. In 2017, IFC, Google Inc., Convergence Partners, and Mitsui & Co announced an investment of up to $100 million to support the company. The Liberia CSquared network was built in partnership with the United States Agency for International Development (USAID) and the Government of Liberia.

Africa’s Participation in the Digital Economy

The benefits of improved Internet connections filter through the economy. At the University of Ghana, 19-year-old Owusu Michael says fast and reliable Internet service everywhere on campus has been critical as he studies to be a computer programmer.

“Having access to the Internet helps you bring out your abilities,” says Michael, as he watches a coding video in the University of Ghana’s 90-seat computer lab. “It’s freedom to learn.”

Better Internet access also enables small and medium businesses to grow. For Gregory Kankoh, chief executive officer and designer at Ghanaian fashion label Nallem Clothing, CSquared’s fiber connectivity helps the company expand its global reach and connect with new buyers.

Nallem has 11 shops in Accra, Ghana’s capital, and the company employs 300 people. It ships locally produced designs to other parts of Africa as well as to Australia, Europe, and the United States. Supported by CSquared’s fiber infrastructure, Kankoh can track shipping logistics and showcase his designs on Nallem’s website.

“For Nallem to transform into a global brand, having fast Internet is key,” says Kankoh. “It lets us all work together.”

“Patient Capital” Plus Partnerships

CSquared’s partners have been key to its success as they have contributed the depth and breadth of their experience in the information and communication technology sectors. “To do fiber and broadband infrastructure on the continent requires patient capital. Without the investment of IFC, Google Inc., Convergence Partners, and Mitsui & Co. we could not deploy at the speed and quality that service providers require,” says CSquared Chief Executive Officer Lanre Kolade.

The company is now working on plans to expand its fiber infrastructure to more countries in West and Central Africa. “Our vision is to connect the entire continent. To ‘FibeRize’ Africa,” says Kolade.

CSquared’s successful efforts to help people and businesses in sub-Saharan Africa make the most of Internet-based business opportunities were highlighted at the Seventh Tokyo International Conference on African Development (TICAD). The event took place on Aug. 28-30 in Yokohama.

Japanese capital and expertise have played an important role in fueling Africa’s development. IFC works with Japanese partners in the private and public sector to create investment opportunities. The growth of CSquared illustrates how IFC’s partnership with Japanese company Mitsui & Co. has bridged technology infrastructure gaps in Africa.

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Published in August 2019