Thread by @andyRoidO

This week, at work, I had to make many calls to Francophone Weat Africa, mainly Senegal.
My airtime was doing fiam fiam in a say that doesn't happen when I call the US, for example.
So I checked my provider's rates for Senegal vs USA. Up to 50 times higher. This got me thinking.

Why are calls from an African country to USA or Western Europe *generally* cheaper than calls from one African country to another?

Like with many African problems, the answer is: infrastructure.

Calls from Nigeria to Seattle are routed across the Atlantic by undersea cable. Undersea fiber-optic cable.
The number & capacity of these cables have been increasing over the years.
I'm a bit of an infrastructure geek, so I'm always gawking at submarinecablemap.com/#/

That site shows you all the undersea cables in operation. Notice there is a LOT of capacity crossing between North America & Europe, and a bit less from Europe to Africa, and South America to Africa.
That's why my calls to Seattle are getting cheaper.

From Nigeria, we have undersea cables like SAT3, Main One, and Glo1, giving our phone companies access to the transatlantic cables, who are locked in a fierce battle for customers. Supply and demand brings down prices. Telcos pass savings to me, in their own price war.

The problem with my call to Dakar is that there is no similar surplus of connection infrastructure between African countries. In fact, there is a distinct shortage of connectivity.

When I compare Africa to North America & Europe, the only other continents in which I've lived, the far lower amount of physical infrastructure per area causes dismay. As in transport, so in telecoms.

Europe, like Africa, lacks the American advantage of very few, large nations. It was as fragmented as Africa, meaning multiple regulatory & economic frameworks. Yet it managed to roll out a continental telecoms infrastructure that dropped prices. How?

Simply put, Europe (and the USA) did many things Africa has not. Here are some, in no particular order.

1. Europe saw its need to be a single market long before it actually became one. This informed the thinking of 2 generations of postwar European leaders, whose goal was "let's find ways for our businesses to grow into other European countries".

When you see your neighbours as your market, rail, road, and phone links to them become a priority.
The amount of money European Govts have pumped into "linkage infrastructure" dwarfs African counterparts both in absolute and percentage terms.

2. We can't deny that another reason is that European markets are richer than African, and are therefore more attractive to private investment in telecoms infrastructure.

But I have a question about this. Is there an attractive value proposition in investing in telecoms infrastructure to run between undersea-cable-adjacent African nations (Nigeria, Ghana, SA) and landlocked ones? @aadetugbo @afalli @tundeleye @docolumide

Infrastructure and markets seem to have a chicken and egg relationship: markets make investment in infrastructure more attractive, but infrastructure makes markets more likely.

Independent Africa's 40/50-year delay to embrace free markets delayed the resolution of this dilemma.

So we are STILL where we were pre-independence where the transportation & communication links between an African nation and foreign "master" economies are healthier than Intra-African links.

But it's not just *physical* links that are more outward than inward.
It is easier for me to get US Dollars, Euro, or Yuan in Nigeria than any African currency.

To change Naira to Uganda Shillings, you intermediate with Dollar.

Same way my package goes to Dakar via Frankfurt.

One of the many reasons I am happy about AfCFTA is that a unified tariff regime for Africa makes every nation a market for every business.
Increased intra-African business will incentivize increased intra-African telecoms investment
So maybe my calls to Dakar will get cheaper 😊