Meta predicts the metaverse could add $40 billion to Africa’s economy — Quartz Africa

Meta predicts the metaverse could add  billion to Africa’s economy — Quartz Africa

Metaverse—a word that until last year only existed in science fiction—is now the mainstay terminology when world economies look into the future.

Though yet to gain ground in Africa, metaverse growth projections released on May 16 by Analysis Group, a research company contracted by Meta, indicate that the metaverse will pump an additional $40 billion into sub-Saharan Africa’s gross domestic product (GDP) in a decade’s time.

There is one major caveat though according to the report: the need for metaverse growth and adoption to be similar to that of mobile technology. The report says, “If the metaverse were to be adopted and grow in a similar way as mobile technology, then we would expect it to be associated with a 2.8% contribution to global GDP after 10 years.”

There are major hurdles that are still throttling Africa’s progress in the global digital economy such as the high cost of mobile data compared to the rest of the world, low smartphone penetration, and high cost plus limited availability of Virtual Reality headsets that power the metaverse.

Meta’s billion dollar projections for Africa’s adoption of the metaverse faces hurdles

According to the GSMA, in sub-Saharan Africa, despite vast improvements, only 28% of the population was connected to the internet by the end of 2020.

It is also a continent with occasional internet and social media shutdowns, which have resulted in the loss of billions of dollars in e-commerce revenue. It remains blurry how the metaverse will benefit Africa’s rural dwellers who still rely on 2G and 3G internet.

5G network connectivity, one of the most potential innovations expected to actualize the metaverse is yet to gain traction in Africa, though a number of countries have installed 5G base stations for piloting.

According to the World Bank’s 2020 report, Africa’s GDP is $1.7 trillion but when adjusted to 2021’s inflation rates, Meta’s metaverse projection mean the continent is set to a 1.8% rise in GDP in 10 years’ time, just from the advent of the metaverse.

It also estimates that if the metaverse adoption began now, it would have a contribution of $3 trillion to global GDP in 2031.

“This estimate lies within the range of existing industry projections, which include estimates ranging from $800 billion to $2 trillion over the next few years, which tend to focus on near-term impacts on gaming, social media, ecommerce, and live entertainment, for example, to long- term estimates ranging from approximately $3 trillion to over $80 trillion,” the report says.

The survey also says that Augmented reality (AR), virtual reality (VR), mixed reality (MR), extended reality (XR), blockchain, and non-fungible tokens (NFTs ) are the fledgling technologies that are expected to be the backbone of the metaverse for social and economic activity.

Though very promising, Africa could be the last continent to fully plug into the metaverse

Global research firm Omdia reports that 12.5 million VR headsets were sold in 2021 globally, and anticipated the market to grow to 70 million units sold by 2026. But the best-selling Oculus Quest 2 retails for $299, placing it far beyond the reach of many African internet users.

However, Derya Matras, Meta’s vice president for Africa, the Middle East and Turkey finds huge opportunities in a continent full of art and passion for tech whose average population age is 19 years.

We know there is huge talent here on the continent, and nowhere is it more exciting to witness than in the creative and tech space.

A vibrant startup ecosystem and a growing government commitment to technology projects is also a boost for companies that want to conduct their metaverse experiments in Africa.

“We know there is huge talent here on the continent, and nowhere is it more exciting to witness than in the creative and tech space. I believe the metaverse has a big role to play here,” Matras told African Business.

However, Meta has in recent months, struggled to create a better metaverse environment for its potential users.

What is the metaverse?

Tech experts have for the longest time failed to agree on the communal definition of the metaverse, but it can be thought of as an expansive network of digital spaces, including immersive 3D or 4D experiences in augmented, virtual, and mixed reality.

American novelist Neal Stephenson famously originated the term ‘metaverse’ in his 1992 science fiction book Snow Crash, where he says it is a three-dimensional virtual world inhabited by avatars of real people.

Meta CEO Mark Zuckerberg sees it as the next wave of internet norm, which will move the consumption of internet content from smartphones to modern devices such as VR headsets.

“A lot of people think that the metaverse is about a place, but one definition of this is it’s about a time when basically immersive digital worlds become the primary way that we live our lives and spend our time,” Zuckerberg told tech podcaster Lex Fridman on Feb. 26.

In the metaverse a user would be empowered to consume digital goods and services seamlessly.

Time Magazine’s Andrew Chow says that instead of having separate Facebook and Twitter accounts in which everything you post is owned by those corporations, “you will be able to own your digital personhood and all of your ideas and digital belongings wherever you go.”

How is Africa responding to the metaverse wave?

South African firm Mann Made developed Africarare last October, a 3D virtual reality immersive hub dubbed Ubuntuland. It houses a metaverse marketplace that showcases African art, and provides a platform for businesses and artists to display their offerings.

“Africarare will connect Africa to this booming arena of the global economy, stimulate growth and create multiple new jobs—such as digital designers, creators and architects—and more branded villages will be announced soon,” Mic Mann, co-founder and CEO of Africarare told IT Web.

Organizations and artists can purchase virtual land in the hub as non-fungible tokens. Africarare says it has 204, 642 plots of land available on the platform.

On Feb. 28 this year, MTN and South African company M&C Saatchi Abel bought plots of virtual land in Ubuntuland. MTN bought 144 plots of digital space for an undisclosed amount.

Metaverse is still in early stages and huge challenges lie ahead

The survey by Analysis Group notes that the metaverse is still in an early stage and many contributors from around the world are starting to help to plan for its inclusive design and construction.

“The extent to which the economic potential of the metaverse is realized depends on how effectively the necessary infrastructure and technology are developed and deployed,” it says.

It identifies three major hurdles—infrastructure of supporting technologies, the adoption of standards and protocols, and the on-ramp experience—as the initial bottlenecks for nations attempting to plug into the metaverse.

One company or a handful of companies will not own or be the metaverse but  individual companies’ products will be destinations in the metaverse or support the metaverse, the report highlights.

“Achieving this level of interoperability will require collaboration on a massive scale, including consolidation and uniformity of the existing protocols and standards.”

For a real global impact, the on-ramp experience will require critical-mass adoption of the metaverse by creators where sellers and buyers are not going to rush to the mall unless there are advantages and attractions for all of them.

“So, unless the metaverse has something exciting to offer both creators and users, it may be challenging to achieve widespread adoption of the metaverse,” the study says.

Metaverse adoption may also face country- or regional-specific challenges in the form of governing bodies’ policy or regulatory objectives as cyber security experts keep warning that African companies should beware of cyber threats that may have far-reaching ramifications in the real world.

But once Africa’s infrastructure is in place and adoption is underway, the researchers believe that will open the door for a metaverse ecosystem that allows the development of endless endeavors built by creators, developers and businesses, as has been the case with the internet and mobile technology.

Steve Liem

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