ADB gives $50m loan for Africa's telecom sector

The Board of Directors of the African Development Bank (ADB) in Tunis recently approved a US $50-million senior loan under its private sector window in support of a Regional African Satellite Communications Organization Members (RASCOM) Telecommunications Project.

According to the company's Chief Executive Officer/Director General Dr. Jones Killimbe the project would involve the construction and launch of an earth-orbiting satellite system to provide point to multi-point telecommunications services throughout Africa.

The project will provide a full range of telecommunications services to end-users; provide complete coverage of Africa (urban and rural), including remote locations.

It would also provide international telephone calls and internet connections at low cost, create direct links among all African countries and allow inter-urban communications within each country.

Others include permitting radio, television, and multimedia broadcast reception in each country as well as the exchange of TV and radio programs between African countries and support limited intercontinental connectivity.

"Development impacts that are likely to accrue from this project include provision of telephony," he said in a statement issued recently.

Services to the various remote rural areas throughout Africa which previously had no direct interconnectivity will improve and this would translate into a substantial economic value, said RASCOM Vice-President Engineering and Technology Eliman Cham.

Rural end-users will benefit from an estimated consumer surplus of $1.2 billion in present value which is an equivalent of about $210 million per annum.

RASCOM will permit lower-cost pan-African interconnectivity for African telecom operators, compared to charges levied by existing service providers, bandwidth lease services, service subscribers, such as TV broadcasters, internet service providers and big corporations are expected to benefit from an estimated consumer surplus.

This project demonstrates a very strong rural focus as a socio-economic impact. Even though the RASCOM project is geared to cover the entire continent, the most noticeable impact will be witnessed in rural areas.

The full impact will be achieved once the Ground Traffic Segment (GTS) investments are implemented by telecoms in regional member Countries.

Farmers will have better access to market information, weather forecasts as well as new technologies. This will increase production and boost livelihoods and contribute in the fight against rural poverty.

With internet connectivity and TV services, people in rural areas, particularly women and children, will have access to new sources of information and education. This will help to break the barriers of social and geographical isolation experienced in many rural areas.

The RASCOM project is strongly aligned with the Bank Group's core development policies and strategies as well as the Bank's NEPAD objectives. RASCOM provides a model for public-private partnerships and will help create an enabling environment for private sector development in Africa.

The long-term objectives of the project is to help to narrow or bridge the digital divide.

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