Cape Town — Senegal and Kenya are the African countries where the internet is having the biggest economic impact, according to a new report.

The report, by the management consulting firm McKinsey, says in a ranking of the contribution which the internet makes to gross domestic product that in Senegal it is 3.3 percent of GDP.

Internationally, Senegal ranks just behind the United States, where internet activity makes up 3.8 percent of GDP, and ahead of France, where the figure is 3.1 percent. The world leader is Sweden, where it makes up 6.3 percent of GDP.

Among other African countries, the internet's contribution to the economy in Kenya comprises 2.9 percent of GDP, while in Morocco the figure is 2.3 percent, in Mozambique 1.6 percent and in South Africa 1.4 percent.

The report estimates that the internet's contribution to GDP - which it calls iGDP - totals U.S. $18 billion a year across Africa. At 1.1 percent of total GDP, this is low compared to the figure in other emerging economies, but the report says the potential for growth is huge.

Taking mobile phones as an example of what might be achieved, the report says revenue from this source is equivalent to 3.7 percent of Africa's GDP - more than triple the level found in developed economies.

"The Internet's effects could be similarly magnified in Africa," the report says. "Despite the fact that Africa's iGDP is currently lower than that of other regions, our analysis suggests that the Internet will take hold on a much larger scale in the coming decade--and as it does, it could provide new solutions to some of Africa's major social challenges.

"In a baseline scenario, Africa's iGDP could grow to at least 5 to 6 percent of GDP, matching that of leading economies such as Taiwan, the United Kingdom, and Sweden. However, if the Internet achieves impact on the same scale as mobile telephony in Africa, iGDP could account for as much as 10 percent of total GDP by 2025 - or some $300 billion."

Read the full report >>