Africa's digital future may be constrained by regulatory uncertainty, political instability, and unpredictable policies, threatening to slow billions of dollars in planned telecommunications investment. The Global System for Mobile Communications Association (GSMA) reports that mobile operators have pledged $76 billion for network infrastructure across Africa between 2025 and 2030. However, without greater certainty, the investment could be delayed, diverted, or reduced. In 2025, the mobile sector contributed $240 billion to Africa's Gross Domestic Product (GDP), supported 13 million jobs, and generated $45 billion in taxes and fees.
The issue is not the availability of capital, but whether the investment environment is sufficiently predictable to sustain successive rounds of capital expenditure. According to GSMA's Caroline Mbugua, investors can price measurable risks, but uncertainty increases the cost of capital and can discourage further investment. Mbugua identified four critical areas where risk can be reduced: finance ministries, regulators, operators, and financiers. She noted that telecommunications investment decisions are often influenced more by finance ministries than ICT ministries, particularly through taxation of devices.
The impact of device taxation is significant, with an entry-level internet-enabled phone costing an average of 24% of monthly income in low- and middle-income countries, rising to as much as 80% for the poorest consumers. Mbugua argued that the handset, rather than the network, is increasingly the key determinant of whether people can afford connectivity. South Africa's 2025 reform, which removed a 9% excise duty on entry-level smartphones, demonstrated the impact of reducing device taxation, with entry-level smartphone sales increasing by 80% within 11 months.
Currency risk is another major constraint, as telecommunications operators earn primarily in local currencies while much of their equipment is purchased in dollars. Without reliable access to foreign exchange, operators may struggle to reinvest profits in network expansion. Mbugua suggested designating telecommunications as critical national infrastructure, with the same forex priority and legal protection as power and water, to remove this uncertainty at zero fiscal cost.
Spectrum pricing and licensing terms are another pressure point, with final spectrum prices in developing markets being three times higher than those in developed markets after adjusting for income. Mbugua recommended licence terms of more than 20 years to align payback periods with investment cycles, technology-neutral authorisations, published spectrum roadmaps, and fees denominated in local currency to reduce exposure to currency depreciation.
Nigeria provides a case study of how regulatory reforms can influence investment, with 11 states waiving right-of-way fees for fibre deployment and 17 capping the charges by October 2025. The Nigerian Communications Commission linked the reforms to $1 billion in additional broadband rollout commitments. Operators must also match long-term licences with long-term investment commitments, sharing towers and fibre infrastructure rather than duplicating facilities.
Mbugua called for longer-term financing for telecommunications infrastructure, noting that development banks, commercial banks, and African pension funds routinely provide infrastructure financing for roads, ports, and power projects over periods of 20 years or more. She also identified device financing as another missing component, suggesting that banks and development partners must structure credit with operators to support households that cannot afford a phone outright.
Key points
- Regulatory uncertainty and investment environment concerns threaten Africa's $76 billion digital investment.
- Device taxation and currency risk are significant constraints to digital growth in Africa.
- Longer-term financing and device financing schemes are needed to support telecommunications infrastructure and digital growth.
