Bringing down the barriers

If we are serious about economic development in Africa, we need to do as much as we can to boost intra-African trade. Look at the trade data for almost any African country, and I bet you'll find that their major trading partner is either in north America, or Europe. Trade with other African countries usually comes way down the list.

But if we want to see our economies really take off, we need to start trading with one another. And in order for that to happen, there are two things we really need to get right: communications and transport.

It's crazy. It's often way, way cheaper to fly from Africa to Europe than it is to fly within Africa. And the same with communications. The costs of telephone calls, let alone Internet use, are generally way higher than in the developed world, and when it comes to country-to-country telephone calls, the charges are generally outrageous. Then there are often big barriers to transporting goods, not to mention the costs and hassles of visas.

And I'm afraid my country, South Africa, is one of the biggest culprits here. Often nationals of other African countries have to jump through all sorts of hoops to get a visa for South Africa. And the cellphone companies drive me mad. For example, even though Lesotho and Swaziland are members of the Southern Africans Customs Union, with currencies linked to the Rand, and even though Lesotho is completely surrounded by South Africa, if I want to use my cellphone while visiting these countries, I either have to get expensive international roaming enabled on my Vodacom account, or I have to buy a local prepaid SIM card. And then it costs me something like R5 a minute, to call home. It's outrageous. This is so even if I use Vodacom Lesotho. I mean, it's all part of the same big company.

So I was very interested recently to hear about two advantages that people in some other African countries enjoy. The first is the East African passport, which was introduced a few years ago, and enables citizens of Uganda, Kenya and Tanzania to travel freely between these countries (though I believe it's not so easy these days to get hold of one of these documents).

The second is the borderless mobile network introduced by cell company Celtel in 6 countries in September 2006, and expanded to a further 6 countries in November 2007. This means that Celtel customers in Burkina Faso, Chad, Malawi, Niger, Nigeria, Sudan, the Republic of Congo, the DRC, Gabon, Kenya, Tanzania and Uganda, can make and receive calls in or between any of these countries, at the cost of a local call.

I am stunned. That means a market of 400-million people have access to calls at local rates across 12 countries, covering an area twice the size of the European Union.

What is wrong with our telephone companies in South Africa? Clearly they make loads of money from the current system. For example, thousands of Basotho work in South Africa, or have family and friends there, and have to keep 2 different sim cards (1 for South Africa, 1 for Lesotho), and pay heavy costs to keep in touch with their loved ones. But how short-sighted this is! How much bigger would the long-term benefits be, not only for them, but for our economies in general, if they went the Celtel route?