East Africa - telecommunications

World Bank Approves US$164.5 Million for Connectivity to Make Kenya, Burundi and Madagascar More Competitive

Up to 25 countries in East and Southern Africa could benefit from the broader US$424 million Regional Communications Infrastructure Program (RCIP)

Press Release No:2007/309/AFR

WASHINGTON, D.C., April 2, 2007 — The World Bank Board of Directors approved on March 29, an International Development Association (IDA) 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 connectivity in East and Southern Africa.

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 Board of Directors responded to the appeal and Governments’ requests for assistance by unanimously endorsing RCIP, which will bring affordable high speed connectivity to as many as 25 countries* in East and Southern Africa. 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.

RCIP is an innovative example of the emphasis on regional integration, which accounts for more than 10% of total World Bank support to Africa.

“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.”

RCIP financing of terrestrial networks will be a catalyst to attract and maximize private sector investment in telecommunications infrastructure. RCIP complements regional undersea cable initiatives, such as the Eastern Africa Submarine Cable System (EASSy) developed by telecommunications operators with support from the International Finance Corporation (IFC) and other development partners.

By the end of the Program, it is expected that all capitals and major cities in East and Southern Africa would be linked to competitively priced high-bandwidth connectivity. This will equip Africa to trade on a level playing field, extend education beyond the classrooms, and accelerate good governance.

see also http://www.worldbank.org/rcip and project web site