(3 Minutes Read)
Kenya’s telecommunications industry is currently grappling with a significant financing gap—a challenge that reflects broader issues faced across Africa’s digital landscape. According to Ian Paterson, Chief Executive Officer of CSquared, this shortfall presents not only a potential risk to digital progress but also a substantial opportunity for private investors to play a pivotal role in driving inclusive digital transformation.
In an interview with Capital Business, Paterson emphasized that Africa’s ambitious digital agenda cannot be sustained by government funding or donor contributions alone. Instead, he highlighted the crucial need for private sector participation, particularly in infrastructure development, to ensure long-term, scalable growth. “Africa’s telecom sector stands at an inflection point,” Paterson remarked. “The existing financing gaps are not just problems—they’re indicators of where the most impactful investment opportunities lie.”
Three strategic investment areas with the potential to transform Africa’s digital connectivity:
- Deployment of shared, open-access infrastructure that reduces duplication and cuts costs for operators.
- Expanding network coverage beyond major cities, especially into rural and underserved regions where millions remain offline.
- Utilizing innovative financing models, such as blended finance structures and public-private partnerships (PPPs), to unlock capital and share investment risk.
Paterson pointed to CSquared’s successful initiative in West Africa—the construction of a cross-border open-access fiber backbone—as a case study. This project, financed by a mix of institutional investors and development finance institutions, has become a critical piece of regional digital infrastructure. He suggested a similar model could be replicated in East Africa, connecting key cities such as Nairobi, Kampala, and Kigali. Such a network, he argued, would enhance cross-border trade and reinforce Kenya’s position as a leading digital hub in the region.
In the Kenyan context, Paterson noted that the rollout of open-access fiber networks has already had a significant impact on small and medium enterprises (SMEs), startups, and digital service providers. These businesses have benefited from improved access to cloud-based tools, reduced operational costs, and expanded market reach.
Supporting his point, he referenced independent economic studies tied to Togo’s Equiano subsea cable landing. The research projects over $200 million (approximately KSh26.3 billion) in GDP growth and the creation of nearly 37,000 new jobs by 2025. Additionally, internet prices in the region are expected to decline by 14%, demonstrating the direct economic benefits of infrastructure investments.
Looking ahead, Paterson stressed that Africa’s digital connectivity will depend on a hybrid infrastructure approach. This includes a combination of fiber optic networks, satellite connectivity, and wireless backhaul solutions. He also highlighted the need to strengthen interconnections between Nairobi’s rapidly growing data center ecosystem and global internet networks to ensure fast, reliable, and scalable digital services.
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Paterson reiterated that while public funding remains important, the future of Africa’s digital economy will largely hinge on strategic private investments—especially those that prioritize shared infrastructure, reach underserved populations, and employ creative financing mechanisms to close the funding gap.