Germany Helps Africa Tap Into Globalisation

KfW, Germany’s development bank, has financed internet access and improved international telecommunication for 250 million people in eastern and southern Africa. The 10,000 kilometre-long undersea cable that was co-financed with KfW and the resultant connectivity should serve as a growth impulse for the African economy.

Africa's population is never too young to go on-line! (© Fraunhofer Institute/FOKUS)

The East Africa Submarine Cable System (EASSy), which KfW Entwicklungsbank co-financed with 13.2 million US dollars of its own funds, has “gone live”. The approximately 10,000 kilometres-long submarine fibre glass cable runs along the east African coast from South Africa to Sudan with land stations in Madagascar, Mozambique, Tanzania, Kenya, Somalia, Djibouti and the Comoros.

The cable connects 21 African states with each other and the rest of the world. It provides the users of these countries with high-quality internet and other international communication services (telephony). The cable ensures the sustainable improvement of the telecommunications environment in Africa as it provides around 250 million African citizens with internet access.

“The financing share provided by KfW is a contribution to closing the digital divide that excludes large parts of Africa from the opportunities provided by modern information technology. The network is an engine for growth and development of the African economies”, said Dr. Norbert Kloppenburg, Member of the Board of Managing Directors of KfW Bankengruppe.

EASSy is operated by a consortium of 16 African (92%) and international (8%) members. It offers any licence holder in the markets it serves open access at affordable prices. This levels the playing field across the entire region. Small, medium and large operators now compete with each other on more equal terms. The resulting higher availability of internet and communication services for commercial and private users is accompanied by declining costs and a larger variety of services.

The network opens up completely new opportunities for products and growth for a region (and its inhabitants) previously cut off from the worldwide explosion in information sharing and globalisation of markets.

The possibilities are limitless: take, as examples, a call centre in Nairobi; a well-informed farmers’ initiative in Ethiopia that can discuss the world market prices for coffee; the mother in Uganda who can call her son abroad at a moderate cost; the student in a provincial town in Madagascar who has access via the internet to libraries around the world, or a programmer in Tanzania who can offer his services on the world market.

The financing package amounting to 70.7 million US dollars was put together in conjunction with the International Finance Corporation (IFC), the African Development Bank, the European Investment Bank (EIB) and the Agence Française de Développement (AFD).

The investment costs totalled 235 million US dollars. Along with the long-term loans from the development banks (70.7 million US dollars), the costs were borne by a consortium of 25 telecommunication enterprises.