Executive Assessment

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Digital connectivity has become a decisive determinant of power across East Africa and the Middle East. Penetration rates continue to climb, but the gap between leaders and laggards remains wide. The United Arab Emirates, Qatar, and Israel now operate at near-universal connectivity, supported by some of the highest purchasing power in the world. Eritrea, South Sudan, Yemen, and Syria remain largely offline due to conflict, sanctions, or fragile infrastructure. Hybrid economies such as Kenya and Rwanda are punching above their weight, turning moderate resources into outsized digital gains through targeted policy and investment.

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The Gulf has consolidated its role as the hub for hyperscale cloud and artificial intelligence, while Kenya has emerged as East Africa’s digital anchor. Cyber operations—from Iran’s campaigns against Israel to ransomware attacks on African banks—have become a constant feature of the operating environment. At the foundation of all this lies a fragile network of undersea cables—2Africa, DARE1, SEACOM, EASSy, and SEA-ME-WE—whose resilience is now as strategically important as oil routes and shipping lanes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital Access and Purchasing Power Rankings

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In East Africa, Kenya leads the region by translating its purchasing power (PPP per capita of $4,000–6,000) into internet penetration above 40 percent. Safaricom’s dominance and Microsoft–G42’s geothermal-powered data centers have positioned the country as a continental hub. Rwanda follows with similar efficiency, leveraging clear digital ID frameworks and targeted pilot projects. Djibouti ranks third, its penetration boosted by hosting multiple subsea cables and foreign bases despite its small population.

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The second tier includes Tanzania and Uganda, where roughly one-third of citizens are online. Ethiopia, despite its scale and economic weight, lags far behind, constrained by limited liberalization and weak last-mile connectivity.

The bottom tier consists of states weakened by conflict or fragility. Sudan has seen access collapse under war conditions. Somalia, Somaliland, and Burundi operate with uneven coverage and poor affordability. South Sudan and Eritrea anchor the bottom: less than 15 percent of their populations are online, with reliance almost entirely on terrestrial backhaul or satellite.

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Across MENA, the Gulf states and Israel dominate. The UAE and Qatar combine immense purchasing power with near-universal access, supported by sovereign cloud and AI strategies. Israel matches this with a unique dual-use AI ecosystem and localized hyperscale regions. Bahrain and Kuwait perform strongly, aligning penetration with wealth. Saudi Arabia, already close to universal access, is investing heavily through SDAIA to convert capacity into digital leadership. Oman trails slightly but remains solidly above mid-tier.

Mid-tier performers include Jordan, Morocco, Tunisia, Algeria, Lebanon, Iran, and Egypt. They have reasonable access but are hampered by economic instability, affordability issues, and uneven policy.

The lowest tier comprises Iraq, Libya, Palestine, Yemen, and Syria. Political turmoil, conflict, and sanctions have left large segments of these populations offline regardless of infrastructure.

 

 

 

 

 

 

 

 

 

 

 

 

 

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Infrastructure and Connectivity: The Undersea Backbone

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The region’s digital economy depends on subsea infrastructure as much as pipelines or shipping routes. In East Africa, SEACOM and EASSy have long been the anchor systems for Kenya and Tanzania, but dual outages in 2024 exposed how fragile and under-redundant these routes remain. DARE1, connecting Djibouti, Berbera, Bosaso, Mogadishu, and Mombasa, has given the Somali coast its first credible subsea link, while Berbera is rising as a strategic landing point. The rollout of 2Africa—backed by Meta, stc, Vodafone, Orange, and others—will transform bandwidth and pricing with new landings across Berbera, Tanzania, Kenya, and Egypt.

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In the Middle East, the Red Sea and Mediterranean are chokepoints of global consequence. The SEA-ME-WE systems carry the bulk of Eurasian traffic. Outages in September 2025 proved how vulnerable these arteries are. Egypt remains the indispensable hub, while Port Sudan is geographically critical but underused. Djibouti has emerged as both lifeline and geopolitical prize, hosting SEA-ME-WE, AAE-1, and DARE1. Landlocked states—Uganda, Rwanda, Ethiopia, and South Sudan—are entirely dependent on fiber routes to the Kenyan and Tanzanian coasts. Eritrea, uniquely, still has no subsea landing and relies on cross-border and satellite links.

 

AI and Cloud Development

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The Middle East leads the world in AI adoption and hyperscale development. The UAE was first to appoint a minister of AI and has tied its 2031 strategy directly to GDP targets. AWS, Azure, and Oracle operate multiple regions in-country, supported by sovereign cloud mandates. Saudi Arabia has launched SDAIA-driven initiatives, a Google Cloud region, and plans for a major AWS rollout by 2026. Qatar has drawn in Azure and Google, embedding AI in government and energy. Israel, with localized regions from AWS, Azure, and Oracle, maintains dominance in dual-use and defense AI.

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East Africa is following a different path. Kenya is establishing itself as the first AI hub, thanks to the $1 billion Microsoft–G42 geothermal program, which promises carbon-neutral compute and local training. Rwanda is policy-led, positioning itself as a test-bed for digital ID and health AI applications. Ethiopia, Tanzania, and Uganda are experimenting with frameworks but lack the infrastructure and talent to scale. Somalia and Somaliland are still connectivity-constrained, but Berbera and Mogadishu landings may open future potential.

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Cyber and Regulation

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Cyber operations are now embedded in the region’s security landscape. In the Middle East, Iran and Israel engage in constant low-intensity cyber war, using wipers, denial-of-service campaigns, and OT probing. These campaigns rarely surprise strategically but sustain pressure and resource drain. Saudi Arabia and the UAE have responded with tougher regulations, most notably Saudi’s ECC-2 standards, which set higher baselines for compliance across energy, finance, and government.

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East Africa presents a more uneven picture. Kenya, Ethiopia, and Uganda are increasingly targeted by ransomware and financial malware as their banking systems digitize. In Sudan and Somalia, conflict creates dark space for cyber actors. Eritrea and South Sudan, while less connected, remain vulnerable to unpatched systems and spillover attacks. For both regions, cyber risk now includes persistent friction, cable outages, and rising compliance obligations in advanced markets such as Saudi Arabia, the UAE, and Israel.

 

Scenarios (12–24 Months)

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The base case is convergence and growth. Kenya and Rwanda will expand as regional AI and cloud leaders, while Uganda and Tanzania gradually close affordability gaps. In MENA, Saudi Arabia and the UAE will sustain dominance in sovereign cloud and AI, while Israel continues to innovate in dual-use applications.

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A fragmentation scenario is also possible. Ethiopia could stall in reform, leaving its citizens under-connected, while South Sudan and Eritrea remain isolated. Somalia’s instability could compromise fragile new investments. In MENA, Lebanon, Syria, and Yemen risk further digital decline, and Iran–Israel cyber escalation could threaten Gulf telecommunications.

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The least likely but most damaging scenario is systemic shock: a coordinated cyberattack on cable landing stations combined with military escalation in the Red Sea, severing multiple subsea systems. This would force rerouting around the Cape of Good Hope, increasing latency and degrading AI and financial services for months.

 

Recommendations

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Governments should now focus on bridging the usage gap through affordability, device access, and skills development rather than pure coverage. Handset financing, rural fiber, and spectrum management are immediate priorities. Cable resilience must be strengthened via regional maintenance consortia and redundancy across terrestrial, subsea, and satellite systems. Cyber frameworks modeled on Saudi Arabia’s ECC-2 should be localized to African conditions.

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Enterprises must assume cable interruptions as a baseline risk and design for multi-region failover, with satellite or LEO backups as tertiary layers. Compliance with sovereign cloud mandates in Saudi Arabia, the UAE, Israel, and Egypt must be planned in advance. Companies relying on Red Sea transit should actively stress-test their supply chains for latency and downtime scenarios.

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Investors should prioritize Kenya and Rwanda in East Africa, where digital growth exceeds income levels, and sovereign cloud and AI projects in Saudi Arabia, the UAE, and Israel. Infrastructure funds should diversify by supporting multiple cable systems—especially 2Africa and SEA-ME-WE—to mitigate exposure to chokepoints.

 

Sources and References

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This assessment draws on multilateral datasets (ITU, GSMA, World Bank, IMF WEO 2024–25), industry mapping (TeleGeography Submarine Cable Map 2025), and independent analysis from Reuters, AP, IISS, Freedom House, and the Atlantic Council on AI, cyber operations, and Red Sea outages.