Basic service infrastructure is considered a bedrock for sustainable development. Despite consistent efforts to build up such infrastructure, large gaps persist in low and lower-middle income countries. For example, in sub-Saharan Africa, 600 million people, or 43% of the total population, currently lack access to electricity (IEA, 2022).
However, this infrastructure gap does not exist for telecommunication and mobile services. A whopping 93% of people living in sub-Saharan Africa have access to cell phones and cell phone service (AfroBarometer, 2016). More recently, the expansion of mobile internet access has rapidly outpaced growth of other types of infrastructure (World Bank, 2018).
This difference in penetration rate constitutes a puzzle, as the two industries – telecommunications and electricity – at first glance share a lot of similarities. On the supply side, they both require large capital investments to build necessary infrastructure, such as cellphone towers or electricity distribution grids. On the demand side, both types of services are selected by individuals and individual households and are arguably necessary for everyday life.
Nevertheless, the “business case”, which is a function of internal business logic and external conditions, for providing mobile network services in sub-Saharan Africa is seemingly more attractive than that for electricity. That appeal to investors results in more efficient financing and resource mobilization, thus leading to its implementation first, over electricity and even other types of infrastructure, such as clean water or sanitation (World Bank, 2018; IEA, 2023).
To solve this puzzle, SEI’s Finance for Sustainable Development (FSD) program hosted four students pursuing their master’s degrees at the Cambridge Judge Business School, to analyse and contrast the differing progress in the development of the telecommunication and electricity industries in sub-Saharan Africa and the implications for economic development. This is the third year in a row that SEI Headquarters (HQ) was chosen to host the Cambridge Global Consulting Project (GCP), which allows MBA students to apply their acquired academic knowledge and skills through practical consultancy work.
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