World Bank Funds Telecoms Improvements in Eastern Africa

The World Bank has approved a financing package of US$164.5 million for Kenya, Burundi and Madagascar as the first tranche of the US$424 million Regional Communications Infrastructure Program (RCIP) for high-speed telecoms connectivity in East and Southern Africa.

The World Bank says that the region is being held back by the prohibitive costs of international connectivity. Businesses are unable to compete in the global economy; university students suffer because they cannot access the Internet; and Government agencies cannot communicate effectively with each other and their citizens because they are not connected.

East and Southern Africa is the only region in the world that is not connected to the global broadband infrastructure and accounts for less than one percent of the world's international bandwidth capacity. As a result of this 'missing link', the region relies on satellite connectivity, with costs amongst the highest in the world.

One Kenyan call-center entrepreneur told the World Bank Board of Directors the region simply cannot compete. "To put 25 agents on the phone, it will cost us close to US$17,000 a month. Elsewhere, it will only cost US$600-900 a month," said Nicholas Nesbitt, CEO of KenCall. "It is absolutely imperative that something be done right now to make bandwidth affordable. Otherwise, we're going to miss a huge opportunity and people are simply going to say that Africa is not ready for these kinds of jobs, is not ready for business."

The US$164.5 million first tranche of funding consists of IDA credits in the amount of US$114.4 million to Kenya and US$30 million to Madagascar, and an IDA grant in the amount of US$20.1 million to Burundi.

"Improving broadband connectivity will add tremendous public value for Africa. Low cost, high quality communications is essential for economic competitiveness," said Paul Wolfowitz, President of the World Bank Group. "Africa is becoming more plugged in - this is very encouraging for the continent. Our partner countries are sending a strong signal to the world that they are open for business and ready to leap into the information age."

Posted to the site on 4th April 2007