Table 4 Examples of active and inactive...

Table 4

Examples of active and inactive USF across Africa

	Active USF (Group 1)	Active USF (Group 2)	Inactive USF	Others
Countries	Egypt, Ghana, Lesotho, Morocco, Nigeria, Rwanda, Tanzania, Uganda	Cameroon, Chad, Cote d’Ivoire, Guinea, Madagascar, Mozambique, South Africa, Sudan, Togo, Zambia, Zimbabwe	Burkina Faso, DR Congo, Gabon, Kenya, Mali, Mauritania, Mauritius, Swaziland	Algeria, Benin Republic, Niger, Senegal, Sierra Leone, Tunisia
USF regulatory framework	One of the key drivers of the relative success of USF in these countries is the existence of clear USF regulatory framework. For example, group 1 countries tend to have a better UAS framework that signposts a clear direction and flexible targets for USF. For instance, the USF mandate in Egypt and Ghana does not only outline the specificity of technology and location targets, but it also allows for flexibility to enable USF to deploy new services (e.g. improving digital skills) and technologies (e.g. broadband). Such flexibility has allowed group 1 countries to establish a robust USF regulatory framework that paves the way for the execution of dynamic projects	A common institutional void associated with group 2 countries is the lack of a robust USF framework. For example, a country like Cameroon is still using USF to deploy fixed services like telecentres. Operating with such USF framework is counterproductive not only because mobile telephony is preferable across Africa, but telecentres are also unsustainable due to the lack of electricity to power computers. Citizens in some communities also find it stressful to walk several kilometres just to have limited Internet access. Accordingly, underlying UAS frameworks and USF mandates in group 2 countries should be amended to enable USF to deploy emerging services and technologies that are relevant to people	Apart from Kenya and Gabon where USF was established relatively recently in 2015 and 2017 respectively, other countries in this category have long-established USF, yet there is little or no public data about their operations	While the UAS frameworks in these countries point to the establishment of USF and percentage of levy collected, access to public information on how much has been collected and project executed is lacking
Governance	Another enabling institutional arrangement that underpins the success of USF in group 1 countries is the transparency surrounding USF governance This is accentuated with the case of Uganda where there is public availability of financial records (income and expenditure) and USF projects on their websites. We found that USF in Uganda generated around $38 million between 2002 and 2015 while disbursing about $37.5 million in the same period to execute over 7,000 projects. These include the deployment of over 2,400 public payphones, 880 GSM sites, 622 broadband sites, and 1,800 school connectivity across the country. Access to such information is not only useful to hold the regulator accountable, but it also allows the public to verify what projects have been executed. Such transparency further strengthens the trust between public institutions and citizens. Furthermore, USF regulators in group 1 countries, for example, Rwanda and Tanzania, have more independence when it comes to the administration and management of the funds. This helps to strengthen USF governance and curtail the opportunistic behaviour of politicians who tend to unduly influence USF in group 2 countries	When it comes to the lack of transparency in USF governance, South Africa is an interesting case not only as the first USF in Africa, but one that despite the execution of a series projects, its USF operation is constantly disrupted by institutional weaknesses linked to corruption and undue political interference. For example, the entire Board of Universal Service and Access Agency of South Africa (USAASA) was suspended in 2011 while a long-serving senior official was suspended in 2014 following corruption allegations. Further, there have been instances where former USAASA managers have alleged that the termination of their appointment is linked to their refusal to award USF contracts proposed by politicians. Such practices do not only destabilise the smooth running of USF, but it also undermines the independence of the regulator		The lack of access to public information in these countries raises concern about institutional transparency because if such information is not available in the public space, it is impossible to assess USF performance on the one hand and hold public authorities accountable on the other hand
USF personnel			A common practice among countries with inactive USF is that while funds are disbursed at the early stages, disbursement tend to stop as time progresses without discontinuing the collection of USF levy. For example, haven disbursed $6 million to MTN in 2009, there is no public record to suggest Swaziland has continued USF disbursement. This is indicative of the characteristic of inactive USF, which has resulted in a growing amount of idle funds. Section 2 highlighted that over $400 million, including over $20 million in Burkina Faso and $5 million in Mali, have been accumulated across USF in Africa. Insights from our analysis suggest that the growing amount of idle funds in Africa is partly linked to the organisational constraint of a lack of regulatory skills to quickly design projects and deploy funds. For example, while skills and competencies such as technical, economic, and legal are critical to the organisation of USF, regulatory bodies are typically faced with a lack of relevant skills. The lack of regulatory skills may not necessarily be down to the shortages of talent but due to political interference that favours the recruitment personnel with political ties with the wrong skillsets. Further organisational constraints that propagate idle funds are time lag between the collection of levy and disbursement, and government bureaucracies, which delay decision making and implementation
Industry incentives	Robust USF regulatory framework and transparent USF governance have created the necessary institutional building blocks for USF to succeed in group 1 countries. This, in turn, has created an enabling institutional environment for industry actors like mobile network operators to support the digital inclusion agenda of group 1 countries. For example, a transparent USF governance will incentivise mobile network operators to continue paying USF levy, knowing that funds would be disbursed when they put in their bids to execute projects on disadvantaged communities		Conversely, in countries with inactive funds where a series of institutional voids such as corruption, lack of transparency, and undue political interference could disincentivise mobile network operators. For example, operators in countries like Mauritius have discontinued the remittance of USF levy due to non-utilisation and mismanagement of funds. If the refusal of operators to pay USF levy becomes widespread, this could limit the financial resources of African countries and their ability to strengthen their institutional capacity (skills and financial resources) in closing digital divide. Accordingly, the digital inclusion agenda in such countries would lack the support of market participation and citizens engagement
Contextualising and implementing USF	⁃ USF across Africa are typically established at a national level either through an act of parliament (e.g. the Electronic Commutations Act of 2005 established USF in South Africa) or decree (e.g. USF in Algeria was established by Decree No. 03-232 and amended by Law 55–01 of 2004) ⁃ USF are largely funded through levies on the annual revenues of mobile network operators with a range of 1% in Mauritius to 5% in Tunisia ⁃ USF are administered independently by a separate entity (e.g. the Ghana Investment Fund for Electronic Communications) or dependently by a unit within the designated ministry (e.g. the Universal Telecommunications Services Management Committee in Morocco) ⁃ Project identification mainly follows a top-down approach where USF administrators decide target locations ⁃ USF are then disbursed on a competitive basis via least subsidy tender where projects are awarded to operators with the minimum subsidy request

	Active USF (Group 1)	Active USF (Group 2)	Inactive USF	Others
Countries	Egypt, Ghana, Lesotho, Morocco, Nigeria, Rwanda, Tanzania, Uganda	Cameroon, Chad, Cote d’Ivoire, Guinea, Madagascar, Mozambique, South Africa, Sudan, Togo, Zambia, Zimbabwe	Burkina Faso, DR Congo, Gabon, Kenya, Mali, Mauritania, Mauritius, Swaziland	Algeria, Benin Republic, Niger, Senegal, Sierra Leone, Tunisia
USF regulatory framework	One of the key drivers of the relative success of USF in these countries is the existence of clear USF regulatory framework. For example, group 1 countries tend to have a better UAS framework that signposts a clear direction and flexible targets for USF. For instance, the USF mandate in Egypt and Ghana does not only outline the specificity of technology and location targets, but it also allows for flexibility to enable USF to deploy new services (e.g. improving digital skills) and technologies (e.g. broadband). Such flexibility has allowed group 1 countries to establish a robust USF regulatory framework that paves the way for the execution of dynamic projects	A common institutional void associated with group 2 countries is the lack of a robust USF framework. For example, a country like Cameroon is still using USF to deploy fixed services like telecentres. Operating with such USF framework is counterproductive not only because mobile telephony is preferable across Africa, but telecentres are also unsustainable due to the lack of electricity to power computers. Citizens in some communities also find it stressful to walk several kilometres just to have limited Internet access. Accordingly, underlying UAS frameworks and USF mandates in group 2 countries should be amended to enable USF to deploy emerging services and technologies that are relevant to people	Apart from Kenya and Gabon where USF was established relatively recently in 2015 and 2017 respectively, other countries in this category have long-established USF, yet there is little or no public data about their operations	While the UAS frameworks in these countries point to the establishment of USF and percentage of levy collected, access to public information on how much has been collected and project executed is lacking
Governance	Another enabling institutional arrangement that underpins the success of USF in group 1 countries is the transparency surrounding USF governanceThis is accentuated with the case of Uganda where there is public availability of financial records (income and expenditure) and USF projects on their websites. We found that USF in Uganda generated around $38 million between 2002 and 2015 while disbursing about $37.5 million in the same period to execute over 7,000 projects. These include the deployment of over 2,400 public payphones, 880 GSM sites, 622 broadband sites, and 1,800 school connectivity across the country. Access to such information is not only useful to hold the regulator accountable, but it also allows the public to verify what projects have been executed. Such transparency further strengthens the trust between public institutions and citizens. Furthermore, USF regulators in group 1 countries, for example, Rwanda and Tanzania, have more independence when it comes to the administration and management of the funds. This helps to strengthen USF governance and curtail the opportunistic behaviour of politicians who tend to unduly influence USF in group 2 countries	When it comes to the lack of transparency in USF governance, South Africa is an interesting case not only as the first USF in Africa, but one that despite the execution of a series projects, its USF operation is constantly disrupted by institutional weaknesses linked to corruption and undue political interference. For example, the entire Board of Universal Service and Access Agency of South Africa (USAASA) was suspended in 2011 while a long-serving senior official was suspended in 2014 following corruption allegations. Further, there have been instances where former USAASA managers have alleged that the termination of their appointment is linked to their refusal to award USF contracts proposed by politicians. Such practices do not only destabilise the smooth running of USF, but it also undermines the independence of the regulator		The lack of access to public information in these countries raises concern about institutional transparency because if such information is not available in the public space, it is impossible to assess USF performance on the one hand and hold public authorities accountable on the other hand
USF personnel			A common practice among countries with inactive USF is that while funds are disbursed at the early stages, disbursement tend to stop as time progresses without discontinuing the collection of USF levy. For example, haven disbursed $6 million to MTN in 2009, there is no public record to suggest Swaziland has continued USF disbursement. This is indicative of the characteristic of inactive USF, which has resulted in a growing amount of idle funds. Section 2 highlighted that over $400 million, including over $20 million in Burkina Faso and $5 million in Mali, have been accumulated across USF in Africa. Insights from our analysis suggest that the growing amount of idle funds in Africa is partly linked to the organisational constraint of a lack of regulatory skills to quickly design projects and deploy funds. For example, while skills and competencies such as technical, economic, and legal are critical to the organisation of USF, regulatory bodies are typically faced with a lack of relevant skills. The lack of regulatory skills may not necessarily be down to the shortages of talent but due to political interference that favours the recruitment personnel with political ties with the wrong skillsets. Further organisational constraints that propagate idle funds are time lag between the collection of levy and disbursement, and government bureaucracies, which delay decision making and implementation
Industry incentives	Robust USF regulatory framework and transparent USF governance have created the necessary institutional building blocks for USF to succeed in group 1 countries. This, in turn, has created an enabling institutional environment for industry actors like mobile network operators to support the digital inclusion agenda of group 1 countries. For example, a transparent USF governance will incentivise mobile network operators to continue paying USF levy, knowing that funds would be disbursed when they put in their bids to execute projects on disadvantaged communities		Conversely, in countries with inactive funds where a series of institutional voids such as corruption, lack of transparency, and undue political interference could disincentivise mobile network operators. For example, operators in countries like Mauritius have discontinued the remittance of USF levy due to non-utilisation and mismanagement of funds. If the refusal of operators to pay USF levy becomes widespread, this could limit the financial resources of African countries and their ability to strengthen their institutional capacity (skills and financial resources) in closing digital divide. Accordingly, the digital inclusion agenda in such countries would lack the support of market participation and citizens engagement
Contextualising and implementing USF	⁃ USF across Africa are typically established at a national level either through an act of parliament (e.g. the Electronic Commutations Act of 2005 established USF in South Africa) or decree (e.g. USF in Algeria was established by Decree No. 03-232 and amended by Law 55–01 of 2004) ⁃ USF are largely funded through levies on the annual revenues of mobile network operators with a range of 1% in Mauritius to 5% in Tunisia ⁃ USF are administered independently by a separate entity (e.g. the Ghana Investment Fund for Electronic Communications) or dependently by a unit within the designated ministry (e.g. the Universal Telecommunications Services Management Committee in Morocco) ⁃ Project identification mainly follows a top-down approach where USF administrators decide target locations ⁃ USF are then disbursed on a competitive basis via least subsidy tender where projects are awarded to operators with the minimum subsidy request

Note(s): Compiled by authors from a variety of sources including Arakpogun et al. (2017), Arakpogun (2018), Arakpogun et al. (2018), Regulatory websites, GSMA Intelligence, and International Telecommunication Union

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