Charting Africa’s digital future

According to McKinsey and Company, the COVID-19 crisis “contains the seeds of a large-scale reimagination of Africa’s economic structure, service delivery systems and social contract. The crisis is accelerating trends such as digitisation, market consolidation and regional cooperation, and is creating important new opportunities – for example, the promotion of local industry, the formalization of small businesses and the upgrading of urban infrastructure.”

Embrace digital technologies

The COVID-19 pandemic hit an Africa that was already structurally fragile and vulnerable. Because of the informal nature of the continent’s economies, lockdown measures had a harsh impact.

The outbreak of the pandemic has underscored the necessity for nations to rethink existing economic models. Across the African continent COVID-19 has laid bare the weaknesses of the political establishments and their economic policies.

Moving forward responding and recovering is not going to be enough. To adapt, grow and thrive in a post-COVID-19 world, it is vital that any pandemic proof strategy must include swift digital transformation at its core.

Africa faces a myriad of challenges from healthcare, food security, education and energy. There is also a digital divide across the continent. The only way to address these challenges and to recover from the covid-19 pandemic is for policy makers to embrace and harness innovation and the potential brought by digital technologies.

Since the onset of covid-19 a year ago digital technologies has been at the forefront of fighting health crisis by tracking the virus, such as the use of contact tracing apps, the use of video conferencing tools such as Zoom ensured continuity in education, business and keeping family and friends connected. Unfortunately, because of the digital divide in Africa the continent has not fully benefited from this opportunity.

Africa is not changing as fast as the rest of the world, and the gap is widening

According to a report by the GSMA titled “Mobile Economy Sub-Saharan Africa 2019” up to 483 million people in sub-Saharan Africa, representing nearly 40% of the population, will have mobile internet subscriptions by 2025.

Internet penetration is likely to grow at a faster rate than elsewhere in the world, and the fact that there are already more than half a billion internet users in Africa raises the possibility of a greater number of profound social, political, and economic changes. It is estimated that by 2030 three quarters of Africans are projected to become internet users. The economic potential is enormous.

Is this a sign that the African giant is awakening?

Besides internet connectivity, regulatory frameworks are still lacking across African nations, resulting in most of the population’s inability to use the available digital solutions.

This pandemic has accentuated prevailing inequalities beyond the digital divide. Due to a combination of high deployment costs, regulatory barriers and poor returns on capital, millions of African’s are still unable to connect to the internet, especially countries inland, such as Niger, Chad, etc. Many more lack access to electricity, water, education and health services, among other basic needs.  These millions, particularly in the rural and remote interior of each of these countries, will be left behind unless governments adopt technology investment strategies as part of its socio-economic inclusion tool.

Only by innovating can we address disruptions caused by the pandemic, and people have done just that across the world, working to return to a better normality. Digital technology is a prerequisite for Africa to address its main development challenges, be it poverty, access to health services, food insecurity, and good governance. Adopting digital technology also enhances productivity, competitiveness and economic diversification.

The prospects brought by the COVID-19 crisis for Africa must be seized. This crisis presents so many opportunities as it has triggered disruptions in such a rapid manner that in a normal situation and routine could have taken years to happen.

Across the continent many countries have poor systems infrastructure in place, making them less digitally ready. Digital technologies do exist in Africa, but they haven’t diffused yet as a result of infrastructure, skills set etc.  UNCTAD in a 2019 study found that low digital skills and demand were the biggest barriers to digital entrepreneurship in developing countries.

The greatest obstacle to digitizing Africa is financial. The UN Broadband Commission for Sustainable Development estimates that an additional $109 billion in investment is required to achieve universal, affordable, and good quality broadband internet access by 2030.

In some parts of the continent young Africans have risen to the challenge during this crisis, turning it into an opportunity to find innovative digital solutions to the issues posed by the pandemic. One such innovations is mSafari, a mobility company that has introduced a contact-tracing application for travellers, created by FabLab, an Information and Communication Technology (ICT) hub in Kenya. Technological solutions have also been devised to solve agricultural challenges. Plantheus, an agriculture app developed in Nigeria, uses artificial intelligence and image recognition to help farmers diagnose crop diseases and recommends best practices for almost all kinds of crop diseases on their farms. According to a study by the World Health Organization, 13% of all new or modified technology developed to respond to Covid-19 is African.

Across sub-Saharan Africa digital savvy consumers are fuelling consumer growth and driving the adoption of new mobile services needed to empower lives and transform businesses on the continent.

Despite many good examples, to generate transformative growth in Africa, digitalization needs to be scaled up fast.

Over the last few years, a wave of change has emerged across Africa. Some key changes include the African Continental Free Trade Area (AfCFTA) with the objective of creating a single market should generate a combined GDP of more than US$3.4 trillion and benefit more than one billion people; the South African government’s creation of a new Centre for the Fourth Industrial Revolution (C4IR) of the World Economic Forum (WEF), for dialogue and cooperation on the challenges and opportunities presented by advanced technologies; and the launch of the Africa Growth Platform, an initiative by the WEF that aims to help companies to grow and compete internationally, leveraging the fact that in Africa, entrepreneurial activity in its initial stage is 13% higher than the global average. 

When, with some countries ‘if”, successfully implemented these initiatives will be game changers that galvanize the results of the digital revolution in Africa. However, this can only be done with calibrated regulatory framework, investment in infrastructure, financial support, and investment in digital skills education.

Africa will not move forward until policy makers prioritise the needs and aspirations of the continents young people. The young are the drivers of digitization. Investment in human capital is an important policy consideration to improve the growth effects of ICT.

“Africa with its abundance of resources and unique demographic structure and population dividend should model its own growth path. Our growth path should be based on our people. If we prioritise our people, we will see massive development on the continent” – Tony Elumelu

To achieve full digital transformation, including reliable and affordable connectivity, policy makers should prioritize ICT, treat skills development and innovation as a matter of urgency. Governments should improve both the usage of digital technology and technical capacity through essential science, technology, and innovation policies.

In Rwanda, the government has set a target to achieve digital literacy for all youths aged 16 to 30 by 2024 as it considers technology as an important part of the nation’s development.

According to the World Bank, for digital technologies to benefit everyone everywhere, it requires closing the digital divide, especially in internet access.

Thus, the challenge for Africa is internet connectivity, as more than three-quarters of the population remain offline. Technology is set to be a game changer for Africa’s development and reducing the income inequality gap on the continent. 

Often the world needs a crisis to turn challenges into opportunities. No doubt a crisis like Covid-19 is dangerous and costly on many fronts but history has proven that crisis can be useful for directing individuals, countries, and the world to a solution,

While some aspects of Africa’s digital revolution are still lagging, the continent nonetheless must set her sights on a digital future. Whilst the global economic outlook is dire, Covid-19 has presented Africa with new and unique opportunities, only if traditional approaches and paradigms are questioned and challenged.

The prospects are great. Africa’s economic renaissance is closer than we think.

Shaun Jayaratnam

Shaun Jayaratnam is an alum of Stanford Graduate School of Business with over 25 years of sales, business development and operations management experience across various industries in Russia, East Europe, Africa and APAC.

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