by The Economist

Some would, for instance, forgo meat at meal time, in the hope of making a call or sending an SMS that would enable them to put more food on the table later.

Africa’s “mobile decade”, when telephones at last reached most corners of the continent, has meant a huge improvement in the lives of the poor. But quantifying it is hard. How useful can a mobile phone be to someone living on less than $2.50 a day, the World Bank’s standard benchmark of poverty? Researchers in Kenya have given a partial answer. They find that people will skip a meal or choose to walk instead of paying for a bus fare so that they can keep their phone in credit.

The weekly value of these sacrifices averages just over 72 Kenyan shillings (84 American cents)—not a trivial amount, seeing that the daily wage of a Kenyan labourer can be as little as a dollar. The report by iHub, an incubator for Kenyan tech start-ups, suggests that discretionary spending by the poor is now influenced greatly by their expenditure on mobile phones. Interviews conducted at half a dozen spots around the country showed how fine are the margins in the decisions made by the poor. Some would, for instance, forgo meat at meal time, in the hope of making a call or sending an SMS that would enable them to put more food on the table later.

Almost half of those surveyed were using internet-enabled smart or “feature” phones. The scratch cards that many Kenyans use to charge their mobiles have recently begun to advertise their value in terms of data rather than talk time. Meanwhile, mobile-phone operators have been giving free access to sites such as Wikipedia to entice customers.

Still, only 16% of respondents said they were using their phones to browse the internet. The real breakthrough in the Kenyan market has been in people’s ability to send and receive money, with more than two-thirds doing so by phone. East Africa’s biggest success has been M-Pesa, a mobile-based money-transfer system pioneered by Safaricom, a leading Kenyan operator. Its simple interface, which works on any phone, has brought financial services to Kenya’s poor majority, enabling the movement of some $8.6 billion in the first half of this year.

But M-Pesa’s success has not escaped the notice of a government struggling to meet its financial commitments. The finance ministry plans to slap a tax of 10% on the fees charged by operators of mobile-money transfers. This cost will inevitably be passed on to customers, including the very poor, thus—according to the GSMA, a global lobby of mobile-phone operators—stifling an important source of development. But if Kenya’s president, Mwai Kibaki, who is due to retire next year, is mindful of his legacy, he may refuse to let the bill pass.

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