How Mobile Phones and IT Promote Economic Development in Africa and Even Increase Literacy

Some excerpts from an excellent Boston Reivew article "Africa Calling: Can mobile phones make a miracle?" by economsits Jenny Aker and Isaac Mbiti:

"There are some good reasons to believe that mobile phones could be the gateway to better lives and livelihoods for poor people. While some of the most fundamental ideas in economics about the virtues of markets assume that information is costless and equally available to all, low-income countries in sub-Saharan Africa are very far from that idealization. Prior to the introduction of mobile phones, farmers, traders, and consumers had to travel long distances to markets, often over very poor roads, simply to obtain price (and other) information. Such travel imposed significant costs in time and money.

Mobile phones, by contrast, reduce the cost of information. When mobile phones were introduced in Niger, search costs fell by half. Farmers, consumers, and firms can now obtain more and in many cases “better” information—in other words, information that meets their needs. People can then use this information to take advantage of arbitrage opportunities by selling in different markets at different times of year, migrating to new areas, or offering new products. This should, in theory, lead to more efficient markets and improve welfare.

An emerging body of research suggests that perhaps theory is meeting reality. In many cases, these economic gains from information have occurred without donor investments or interventions from non-governmental organizations. Rather, they are the result of a positive externality from the information technology (IT) sector.

African governments, donors, mobile phone companies, and NGOs recognize the potential of mobile phones in many arenas of economic development. An emerging trend is the development of mobile phone-based services and products—applications or “apps”—that go beyond basic voice calls. In wealthy countries apps have mainly been sources of entertainment, but in poorer countries, they provide opportunities for disseminating market information, monitoring health care, and transferring airtime and money. In most cases these apps are developed by the private sector and then adopted (and adapted) by the development community. Projects in agriculture, health, education, and governance increasingly rely on the services uniquely available via mobile phones.

Simple and affordable mobile phones are also being used as a means to promote adult literacy in Africa. In addition to a regular literacy curriculum, adults in the Nigerien village of Falenko learn where to find letters and numbers on a mobile phone and how to send and receive SMS messages. Within four months, students are able to practice their newly acquired literacy skills by sending SMS messages to their friends and family. In a country without vernacular newspapers and village libraries, SMS makes literacy functional. Early results suggest that students who use a mobile phone as a learning device make faster progress and achieve greater literacy than those relying solely on traditional classes. Similar mobile-literacy projects are starting in Senegal, and others in India are using smart phones and mobile games as teaching tools for children."