The Digital Divide in Developing Nations: Policy Impact on the Internet in Sub-Saharan Africa

The distribution of internet penetration varies widely in sub-Saharan countries. Countries such as Seychelles and South Africa have an internet penetration level of over 50 percent, while others are below two percent. In “Crossing the Digital Desert in Sub-Saharan Africa: Does Policy Matter?” Robert Wentrub and colleagues analyze the policies that affect the distribution of internet access in sub-Saharan countries, arguing that increased internet penetration allows for greater participation of developing countries with the digitally interconnected economies of the world. Lack of internet or uneven distribution of internet access creates “black holes of information capitalism” that can further the marginalization of minority groups. Their paper assesses several policy variables that impact a country’s access the internet including: the free flow of information, market concentration, Universal Service Fund activity level, and the total tax on computer equipment.  

Based on the available data, the researchers determined the level of internet penetration  to be independent of the free flow of information, as well as the government’s efforts to censor web content such as news and social media. These results contradict countries like China, which have high internet penetration but low levels of information flow. From a development perspective, combinations of high internet penetration, low education levels, and high levels of poverty can facilitate an environment where people are manipulated by propaganda. Countries that lack a free flow of information can also, in the long run, experience a lack of digital entrepreneurship thereby impacting their ability to be included in other digital economies.

Developing economies with non-monopolistic markets (two or more internet providers) should have increased levels of internet penetration. However, the data suggests that market concentration does not play a significant role in the level of internet penetration, although the results were ambiguous enough to require further study at the granular level to understand the exact relationship. Specifically, the ambiguity could be due to varying maturity levels and other factors reflecting the development progress of sub-Saharan economies.

A key issue with measuring internet penetration in any country is the lack of a universal “internet inclusion policy.” Universal Service policies ensure the availability, affordability, and accessibility of telecommunications services.  Such policies are widespread in Africa, with 31 of the 48 sub-Saharan countries having such policies, and the remaining 17 implementing alternative programs. Countries such as Botswana (internet penetration of approximately 15 percent) use direct government subsidies; Seychelles (internet penetration of 50.4 percent) lets its operators bear the funding as Universal Service obligations; and Liberia (internet penetration of 4.6 percent) provides no financial support for Universal Services. Wentrub et al. found that Universal Service Fund activity level was a significant factor in influencing the level of internet penetration, stating that on average, countries with high USFs also have high levels of internet penetration.

Based on existing research, import tariffs alone were also determined not to be a significant influencer on internet penetration. In order to truly understand the impact of taxes on internet penetration, local value added taxes (VAT) should also be considered. Their research showed that the combination of import tariffs and VATs significantly influence the level of internet penetration in the sub-Saharan countries.

This research furthers understanding of how various policies affect internet penetration in sub-Saharan countries. Universal Service Fund programs and lower taxes affect penetration levels most significantly, while free flow of information and market concentration do not. Ultimately, further study is needed to understand the relationship between internet policy and internet penetration, in order to assist developing countries in joining the world’s digital economies.

Article source: Wentrup, Robert, Xiangxuan Xu, H. Richard Nakamura, and Patrik Ström. “Crossing the Digital Desert in Sub-Saharan Africa: Does Policy Matter?” Policy & Internet 8.3 (2016): 248-69.

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