Evaluating the Growth and Potential of the Domain Name Industry in Africa | Blog Two

This blog is the second in a series focused on the 2023 Africa Domain Name Industry Study. The blogs contextualize and expand upon data and information gathered during the study.

 

The 2023 Africa Domain Name Industry Study provides a comprehensive overview of the growth, challenges, and future potential of the domain name industry across the continent. It was commissioned by ICANN and conducted by PowerSoft Africa, in collaboration with the Coalition for Digital Africa. The study builds upon the baseline established in 2016, providing updated insights into the current state of Africa's domain name industry.

 

The domain name industry in Africa is showing significant promise for future growth. This blog, the second in the series, explores the findings of the 2023 study, highlighting the growth potential of domain name sales in Africa, focusing on both country code top-level domains (ccTLDs) and generic top-level domains (gTLDs).

Current Growth Trends in ccTLDs

According to the study, ccTLD registrations in Africa grew 203 percent to 4.33 million since 2016, with South Africa, Nigeria, Kenya, and Egypt leading the way. An increase in local registrars and the development of local hosting services drove this expansion.

 

Rise of gTLDs in Africa

Complementing the ccTLD growth, gTLD registrations by African entities have also increased, with around 1.4 million registrations reported. The bulk of these (~1.2 million) are .com domains, highlighting the increasing awareness and adoption of global domains by African businesses and individuals.

 

The African continent’s Domain Name System (DNS) address space includes four geographic gTLDs: .africa, .capetown, .durban, and .joburg. The .africa gTLD had 62,716 registered domains on record as of November 2023. This is approximately a 57 percent decrease from the initial 135,000 registrations in 2017.

 

Top-level domain .capetown had a decrease in domain registrations of 7.3 percent since 2016, and .durban had a 2.4 percent decrease. The .joburg gTLD had a 7.4 percent decline in registrations since 2016.

 

Factors Driving the Growth

Several factors contribute to the robust growth of the domain name industry in Africa. Economic advancements across the continent have spurred investments in digital infrastructure, leading to improved Internet access and higher demand for domain names. Key drivers include:

 

• Economic Factors: The growing digital economy and increasing entrepreneurial activities are spurring demand for domain names.
• Technological Advancements: Improvements in Internet infrastructure, such as the expansion of broadband networks and mobile Internet access, have facilitated this growth. For instance, by mid-2022, over 1.1 million kilometers of terrestrial fiber cables had been installed.
• Government Policies: Supportive regulations and policies aimed at enhancing digital literacy, protecting online privacy, and ensuring affordable Internet access are crucial drivers of this growth. Initiatives like the African Union’s Digital Transformation Strategy for Africa (2020–2030) emphasize promoting ccTLDs as critical national resources.
• Increase in Internet Exchange Points (IXPs): From 36 IXPs in 26 countries in 2016 to 63 IXPs in 38 countries by 2023, the number of fully operational IXPs in Africa has grown significantly. This expansion has greatly enhanced local Internet performance and boosted domain name registrations.

 

Prospects for the Domain Name Market

Given the current growth drivers, the future of the domain name market in Africa looks promising, with expectations of continued growth in both ccTLD and gTLD registrations. Predictions indicate that ccTLD registrations will keep increasing as more African countries enhance their digital infrastructure and awareness of the importance of local domain names spreads. The annual growth rate across the continent is projected at 12.4 percent.

 

For gTLDs, the trend is also expected to continue upwards, driven by the increasing globalization of African businesses and the desire for a more prominent online presence.

 

Impact on Local Digital Economies

The growth of domain name registrations is poised to significantly impact local digital economies across Africa. Increased domain name registrations contribute to the development of local businesses and communities by facilitating online visibility and accessibility. For instance, case studies from Kenya and Nigeria demonstrate how robust DNS infrastructure supports e-commerce, enhances digital services, and promotes economic development.

 

Case studies:

• Kenya: E-Government Services

Kenya's integration of e-government services has driven demand for domain names. Online submission of tax returns, visa applications, and access to various governmental services have increased the need for local domain names. This digitalization enhances efficiency and encourages businesses to establish an online presence, stimulating the local digital economy.

 

• Nigeria: Empowering SMEs

In Nigeria, the focus on digitalizing small and medium-sized enterprises (SMEs) has significantly impacted the domain name industry. With 96 percent of businesses classified as SMEs, initiatives to simplify business registration and promote e-commerce have led to a rise in domain name registrations. As more SMEs go online, demand for domain names increases, supporting broader economic growth.

 

In Summary

As the domain name industry continues to grow, ongoing investment in digital transformation on the continent, continued investment in digital infrastructure, and supportive policies will be crucial to sustaining this momentum. By addressing challenges such as high Internet costs and limited digital literacy, stakeholders can ensure the domain name industry continues to flourish, fostering a more connected and prosperous Africa.

 

For more detailed insights, please refer to the full 2023 Africa Domain Name Industry Study.

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