Telecom operators have pledged $76 billion toward African network infrastructure through 2030 but industry leaders warn that capital alone will not solve the continent’s connectivity gap unless systemic investment risks are addressed.
Writing on the economic landscape of African telecommunications, Caroline Mbugua, Senior Director of Public Policy and Communications at GSMA Africa emphasized that mobile technology added $240 billion to the continent’s economy last year representing 7.8 percent of GDP with contributions projected to reach $290 billion by the end of the decade.
However, nearly one billion Africans currently live within reach of a mobile signal yet remain offline, leaving expensive network infrastructure underutilized and forcing investors to price the remaining usage gap as high financial risk when evaluating future funding rounds.
Mbugua identifies four key structural areas where investment friction occurs: finance ministries, telecommunications regulators, commercial operators and lending institutions. She argues that addressing these bottlenecks requires straightforward, low-cost policy adjustments rather than massive funding injections.
A primary obstacle remains heavy taxation on mobile devices which accounts for up to 80 percent of monthly income for the poorest households. Out of $45 billion generated by the telecom sector for African governments last year, $20 billion came directly from value-added tax (VAT) and import duties on mobile phones.
Mbugua highlights South Africa’s decision in April 2025 to eliminate a 9 percent excise duty on entry-level smartphones as a successful model; within eleven months, smartphone sales surged 80 percent while feature phone sales dropped 87 percent adding approximately 1.1 million new smartphone users to pre-existing networks at zero net loss to public treasuries.
Spectrum and infrastructure deployment costs present another major hurdle. When adjusted for average income levels, developing markets pay up to three times more for spectrum licenses than developed nations, creating a gap that directly shrinks network coverage maps by up to 16 percentage points. In contrast, policy interventions like Nigeria’s initiative waiving fiber right-of-way fees across eleven states and capping them in seventeen others unlocked over $1 billion in new private rollout commitments.
Additionally, financial lenders contribute to slow infrastructure scaling by offering short-term, high-interest tech-sector loans for tower estates despite physical tower assets outlasting many traditional commercial roads that qualify for 20-year infrastructure loans.
Mbugua also stresses that tax cuts alone cannot help low-income households that cannot afford upfront hardware payments, calling for better deployment of Universal Service Funds millions in operator-levied fees that frequently sit unused in government accounts instead of financing device subsidies and rural expansion.
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According to GSMA leadership, the true measure of a country’s telecommunications progress is not the size of its initial headline investment pledge, but whether initial investors return three years later to fund harder-to-reach rural districts.
Mbugua concludes that achieving long-term network sustainability and bringing populations online are the same objective, dependent entirely on aligned decisions across taxation, spectrum pricing and development lending. Lowering regulatory and structural risks ensures that private capital continues to flow back into expanding coverage for underserved communities across Africa.
