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Turning a digital divide into dividends will require efforts
From Africa Renewal: December 2017 – March 2018

Internet penetration is creeping up in Africa, bringing the prospect of digital dividends to a continent long marked by digital divides.

“Africa has reached a penetration which has broken the barrier of 15 %, and that’s important,” says Nii Quaynor, a scientist who has played a key role in the introduction and development of the internet throughout Africa. He is known as the “father of the Internet” on the continent.

However, Africans have not developed the ability to produce enough software, applications and tools to give economies the dividends they sorely need.

The shift to low-cost submarine connections from satellite connections is less than a decade old. The new undersea fibres have led to a remarkable increase in data transmission capacity that drastically reduces transmission time and cost.

Today 16 submarine cables connect Africa to America, Europe and Asia, and international connectivity no longer presents a significant problem, reports Steve Song, founder of Village Telco, an initiative to build low-cost telephone network hardware and software. This has allowed countries to share information, both within the continent and worldwide, more directly. It has created more space for innovation, research and education.

“Networks have ended the isolation of African scientists and researchers. You now have access to information from the more developed countries, and this is changing the way people think,” says Meoli Kashorda, director of the Kenya Education Network.

Internet penetration on the continent has not kept pace with mobile phone diffusion. In 2016 only 22% of the continent’s population used the Internet, compared to a global average of 44%, according to the International Telecommunication Union (ITU), the UN agency that deals with issues concerning information and communication technologies. And only 11% of Africans could access 3G internet, which allows mobile operators to offer a high data-processing speed.

Access to technology

The ITU notes that the people most likely to have access to digital technology in Africa are males living in urban areas or coastal cities where undersea fibres are available.

McKinsey & Company, a global management consulting firm, estimates that if Internet access reaches the same level of penetration as mobile phones, Africa’s GDP could get a boost of up to $300 billion. Other experts concur that better access to technology could be a game changer for development and the closing of the income inequality gap in Africa.

In sub-Saharan Africa, the richest 60% are almost three times more likely to have internet access than the bottom 40%, and those in urban areas are more than twice as likely to have access as those in rural areas, according to the World Bank’s World Development Report 2016.

The World Bank’s development report of 2016 notes that digital dividends, which it describes as “broader development benefits from using these technologies” have not been evenly distributed. “For digital technologies to benefit everyone everywhere requires closing the remaining digital divide, especially in internet access,” maintains the Bank.

Businesses that incorporate digital technologies into their practices will create jobs and boost earnings, according to the African Development Bank (AfDB). The bank reported in 2016 that two million jobs will be created in the ICT sector in Africa by 2021. Analyst programmers, computer network professionals, and database and system administrators will find jobs in the sector.

Although the World Bank paints a less rosy picture for digital dividends in Africa, the potential for millions of jobs in the sector is encouraging news for the continent’s youths, who make up 60% of Africa’s unemployed and are jobless at a rate double that of adults. Youths can easily take advantage of the jobs that digital revolution brings, says Bitange Ndemo, a former permanent secretary in Kenya’s ministry of information and Communication.

Technology can also help bridge inequalities caused by the education gap. According to the UN UN Educational, Scientific and Cultural Organization, over one-fifth of children between the ages of six and about 11 are out of school, along with one-third of youth between the ages of about 12 and about 14. Almost 60% of youth between the ages of about 15 and about 17 are not in school.

On the bright side, as mobile Internet access expands, so will the Internet’s potential to narrow the continent’s education gap. E-learning continues to grow due to its affordability and accessibility. In fact, IMARC Group, a market research company with offices in India, the UK and the US, reported earlier in 2017 that the e-learning market in Africa will be worth $1.4 billion by 2022. It will improve the education level of Africa’s workforce that will contribute positively to the continent’s economies.

Eneza Education, for example, a Kenya-based learning platform, surpassed one million users in 2016. The platform allows users to access learning materials using various devices. They can access courses and quizzes via text messages for only 10 Kenyan shillings ($.10) per week. Eneza caters to students and teachers in rural areas where opportunities are limited.

Also, Samsung’s Smart Schools initiative equips schools around the world with tablets, PCs and other devices, and builds solar-powered schools in rural areas. Currently 78 Smart Schools are operating in 10 African nations, including Ethiopia, Ghana, Kenya and Uganda. The company’s strategy is to encourage underprivileged students to use digital devices.

With women 50% less likely to use the internet than men, some organisations are now making efforts to attract women to the digital world. Digital technologies can provide opportunities for women in the informal job market by connecting them to employment opportunities.

Analogue complements

High digital penetration is good, but good governance, a healthy business climate, education and health, also known as “analogue complements,” will ensure a solid foundation for adopting digital technologies and more effectively addressing inequalities, advises the World Bank. Even with increased digital adoption, the Bank says, countries neglecting analogue complements will not experience a boost in productivity or a reduction in inequality.

“Not making the necessary reforms means falling farther behind those that do, while investing in both technology and its complements is the key to digital transformation,” notes Bouthenia Guermazi, ICT practice manager at the World Bank.

Yet digital migration is receiving pushback from obsolete analogue operators who are concerned about the risks of digitizing. Automation poses a threat to those whose jobs can be done by cheaper and more efficient machines, a phenomenon that primarily affects already disadvantaged groups. For example, many banks and insurance companies have automated customer services.

The United Nations has set the goal of connecting all the world’s inhabitants with affordable, high-speed internet by 2020. Likewise, the African Union launched a 10-year mission in 2014 to encourage countries to transition to innovation-led, knowledge-based economies. This mission is part of its ambitious Agenda 2063, aimed at transforming the continent’s socioeconomic and political fortunes.

Rwanda is leading the charge via its Vision 2020 programme, which aims at developing the country into a knowledge-based middle-income country by 2020. Earlier this year, Rwanda rolled out its Digital Ambassadors Programme, which will hire and train about 5,000  youths to teach digital skills to five million people in the rural areas.

Unfortunately, digitization ranks low on the priority lists of many developing countries. And according to a recent report by the UN Conference on Trade and Development (UNCTAD), productivity gains from digitalization may accrue mainly to those already wealthy and skilled, which is typical in internet platform-based economies, where network effects (additional value for service as more people use it) benefit first movers and standard setters.

In the Organisation for Economic Co-operation and Development countries, an intergovernmental economic organization of 35 countries, where the digital economy has evolved the most, growing use of ICT has been accompanied by an increasing income gap between rich and poor.

The UNCTAD report also states that developing the right ICT policies depends on countries’ readiness to engage in and benefit from the digital economy, but the least-developed countries are the least prepared. To ensure that more people and enterprises in developing countries have the capacity to participate effectively, the international community will need to expand its support.

Ms. Guermazi urges leaders to develop a comprehensive approach to transforming their countries rather than rely on ad hoc initiatives.

“Digital dividends are within reach,” Ms. Guermazi insists. “The outlook for the future is bright.”

Source

WCO

It forms the basis for Customs tariffs and statistical nomenclatures around the world and is used for around 98% of world trade.

he Harmonized System (HS) allows a world of many languages to speak with one. A multipurpose nomenclature for trade, the HS is one of the most successful instruments developed by the World Customs Organization. Its Convention has 156 Contracting Parties and the HS is used by more than 200 countries, territories and Customs or Economic Unions. It forms the basis for Customs tariffs and statistical nomenclatures around the world, and is used for around 98% of world trade. The year 2018 marks the 30thAnniversary of the HS which came into effect on 1stJanuary, 1988.

As an international standard with global application, the HS plays a key role in facilitating world trade. The HS is used as the basis for:

  • Customs tariffs;
  • Trade policies and quota controls;
  • Collection of international trade statistics and data exchange;
  • Rules of origin;
  • Trade negotiations such as the WTO Information Technology Agreement and Free Trade Agreements;
  • Monitoring of controlled goods, for example, chemical weapons precursors, hazardous wastes and persistent organic pollutants, ozone-depleting substances and endangered species;
  • Many Customs controls and procedures, including risk assessments and profiling, electronic data input and matching and compliance activities; and Economic research and analysis..

To read more

WCO

The Harmonized System (HS) allows a world of many languages to speak with one. A multipurpose nomenclature for trade, the HS is one of the most successful instruments developed by the World Customs Organization. Its Convention has 156 Contracting Parties and the HS is used by more than 200 countries, territories and Customs or Economic Unions. It forms the basis for Customs tariffs and statistical nomenclatures around the world, and is used for around 98% of world trade. The year 2018 marks the 30thAnniversary of the HS which came into effect on 1stJanuary, 1988.

As an international standard with global application, the HS plays a key role in facilitating world trade. The HS is used as the basis for:

  • Customs tariffs;
  • Trade policies and quota controls;
  • Collection of international trade statistics and data exchange;
  • Rules of origin;
  • Trade negotiations such as the WTO Information Technology Agreement and Free Trade Agreements;
  • Monitoring of controlled goods, for example, chemical weapons precursors, hazardous wastes and persistent organic pollutants, ozone depleting substances and endangered species;
  • Many Customs controls and procedures, including risk assessments and profiling, electronic data input and matching and compliance activities; and Economic research and analysis..

The HS is crucial to the development of global trade. It is also fundamental to achieving fair, efficient, and effective revenue collection, a primary Strategic Goal of the WCO. In addition, as it provides an essential tool for the simplification and harmonization of customs procedures and provides the basis of knowing what trade goods are crossing borders, it contributes to other major strategic goals of Customs administrations and of the WCO.

The HS is a living language. We are now in the 6th edition of the HS and in the process of preparing the Seventh Edition of the HS (HS 2022). During the life of the HS, there have been 60 meetings of the Harmonized System Committee (HSC) where 4,144 agenda items were discussed, 10 Recommendations were produced concerning the application of the HS Convention, 2280 classification decisions made and 871 Classification Opinions adopted to ensure the harmonization of classification. On 1st of January 2018, Members can be congratulated on having worked through the 60 HSC meetings, 53 meetings of the Review Sub-Committee (RSC) and 32 meetings of the Scientific Sub-Committee (SSC) to maintain and update the HS to keep it responsive and relevant to current needs.

On the occasion of this anniversary, we call for the international Customs community, in partnership with the international trade community, to continue to be proactive and pursue its efforts to develop and maintain the HS, especially in terms of the application and uniform interpretation of the HS, so as to safeguard and further grow the benefits of this success.

We also invite all of you to celebrate with us, either in your own countries or here in Brussels.

Source

UNECE

Have you ever asked yourself, ‘what does a trader try to achieve when trading globally beyond making a profit?’ To put it simply, traders want to supply goods that meet their customers’ needs, including their deadlines, as quickly as possible and with minimum cost. However, supplying the goods in time with a minimum cost is not as simple as it sounds. In a global trade transaction, there are national and international regulations or formalities that must be followed. These formalities include significant paperwork and cumbersome processes, which are often referred to as, ‘red tape’. Most of these formalities are carried out behind the border (domestically) or at the border. They include, for example, customs declarations, customs clearance, trading permits, certificates of origin, quality or inspection certifications, and so on. All these formalities require significant paperwork, many days to complete (not including transportation) and they come with a lot of ‘hidden’ costs. The OECD has estimated that simplifying these formalities could save between 2 to 15 percent of the value of goods traded.

What if all these formalities could be done in a few clicks and the lengthy formalities for export and import could be abandoned? Yes, this is a reality in some countries and could be a reality everywhere due to something called an Electronic Single Window system which is based on UNECE Recommendation No. 33. Globally, more than 70 country economies are using Single Window systems, as reported by the World Bank. Through this system, when completely implemented, all the information related to an export or import can be submitted in a single entry point. This means traders no longer need to go to multiple offices, obtain various paper permits and wait uncertainly to clear their goods. All these steps can be finished, at one time, through the Single Window and within a matter of hours (or, in some cases, minutes).

That is just one example of the type of “product” that UNECE offers to facilitate global trade. UNECE has been working to facilitate trade for more than four decades by bringing together a wide range of experts from countries around the globe in order to develop:

  • Recommendations and best case scenarios for cutting ‘red tape’ and simplifying trade rules
  • A common language (i.e. standards) for transactions and the exchange of trade data between countries
  • Guidelines to implement the recommendations and the standards.

To know more about these tools and instruments and how to use them, information free of charge is available at www.tfig.unece.org.

Source

WEF

At the age of 20, I aspired to be president; and at the age of 30, I was appointed to work in the office of the presidency of my country. A decade on, I developed a healthy respect and deep sense of humility about what it takes to successfully lead and fulfill expectations of all citizens in a poor developing African state. With 70% of Africans under the age of 30 – mostly poor unemployed and unemployable – I believe there is a dire need for a heightened sense of urgency in the face of growing global and regional political uncertainty.

Centuries ago, Africans were caught off guard by the advent of the First Industrial Revolution, which manifested itself in superior fighting and transport technology. Centuries later past the Scramble for Africa, wars of independence from colonialism, and half a century of struggle to attain economic independence, the continent is confronted with the rising challenge of the Fourth Industrial Revolution. While the first revolution was dominated by land ownership and stretched over hundreds of years, the fourth revolution is primarily about knowledge ownership and is moving at the speed of light. This new challenge comes at a time when leaders are grappling with the reality of the failure of past growth to create jobs and reduce poverty and inequality.

Leaders around the continent are facing myriad challenges, ranging from investment downgrades and droughts exacerbated by climate change, to illegal migration and civil protests. More worryingly, the 2016 Ibrahim Index of African Governance highlighted that, among others, the rule of law has declined in over 30 countries since 2006.

The path to inclusive growth

In this context, the theme of the forthcoming World Economic Forum on Africa in Durban, South Africa, in May 2017 is Achieving Inclusive Growth through Responsive and Responsible Leadership. Building on global-oriented conversations at our Annual Meeting in Davos this year on Responsive and Responsible Leadership, we hope to expand the conversation on identifying new mechanisms to deliver inclusive growth and development with the regional and global leaders gathered in Durban.

In addition, there is a sense of urgency as more and more young people are turning to violence to express their frustration about lack of progress. Countries like Estonia have shown that it is possible to craft a national digital social order that delivers for all. Call to action: How are you leading change for the 70% under 30 years of age? Please join the #ShapingAfrica conversation and put your issue on the agenda in Durban.

Accordingly, below are three areas in which the continent’s leaders in Durban will explore how to grapple with these new challenges while addressing the inclusivity challenge by embracing the Fourth Industrial Revolution.

1. Mobility-related technology is connecting the continent in unparalleled ways under land, overland and above land. Over 70% of Africans now have unprecedented access to mobile technology. This digital infrastructure offers new opportunities for the majority of poor Africans in rural and informal economies.

After Zipline’s successful launch of drone-delivered blood and medical supplies in Rwanda last year, it is increasingly evident that drones are revolutionizing the small cargo delivery supply chain.

And, with the launch of the Ethiopia-Djibouti train last October, Africa’s high-speed railway network is becoming a reality. Transnet is also leading the way with the first locally “designed, engineered and manufactured” train – the Trans African Locomotive – launching in April 2017.

This year, Africa is expected to launch the Continental Free Trade Area (CFTA). The key objectives of the CFTA are to boost intra-African trade and investment by easing the movement of goods and people on the continent and to improve Africa’s competitiveness and economic growth by reducing the cost of doing business. Intra-African trade stands at about 15% of total volume, compared to 60% of intercontinental trade in the European Union, 53% in East Asia, 41% in North America and 20% in Latin America and the Caribbean. Achieving this milestone will start to make regional integration a reality. The next step will be to make it easier for Africans to travel within Africa without a visa.


Image: Rexparry sydney, CC BY-SA 3.0

2. Disruptions to manufacturing technology such as the internet of things and 3D printing are liberalizing access to technology and decentralizing production. At Gearbox in Kenya, makers from the informal industry, including jua kali artisans without formal engineering skills, are using 3D printing to manufacture quality products faster and cheaper. Elsewhere, technologists like David Sengeh, inspired by the plight of amputees in Sierra Leone, are harnessing artificial intelligence and machine learning to develop the next generation of prosthetic devices.

These developments notwithstanding, Africa still lags significantly behind the rest of the world in terms of manufacturing. According to the African Development Bank, the continent’s manufacturing exports doubled between 2005 and 2014 to more than $100 billion, with the share of intra-African trade rising from 20% to 34% over the same period. However, Africa’s share of global manufacturing exports remains less than 1%, compared with over 16% for East Asia.

3. Emerging African inventors are re-imagining solutions suited to the African context. It is estimated that, by 2050, over 700 million new housing units will be needed. This implies a radical rethink of what kinds of shelter to construct. Elijah Djan from South Africa is ahead of the curve with his invention of bricks made out of paper, essentially creating a sharing economy by finding a new use for waste. In order for African innovators to thrive, though, policy-makers need to provide a conducive intellectual property regime and make it easier to do business competitively.

For the continent to fully leverage opportunities presented by the Fourth Industrial Revolution, dramatic investments need to be made to ensure that Africans are equipped with the right skills for the future of jobs. For example, the overall shortage of engineers is estimated at 1 million. In addition, more efforts are required to reverse the widening gender digital divide.

When all is said and done, successful implementation will depend on Africans’ shared values and identity. True integration is a bottom-up cultural process, not a top-down political or technical process. Moreover, we cannot assume that we can work together if we do not deliberately build bridges across languages and borders, as well as actively prepare for intergenerational transitions between leaders. In Durban, home to the largest tribe in South Africa and largest diaspora of Indians outside of India, we will discuss how to build a shared understanding and nurture collective responsibility to navigate the transition from Africa 1.0 to Africa 4.0 while strengthening our united socio-cultural heritage.

As we look back to see forward, it is equally important to stop bad traditional practices. Madam Graça Machel and Archbishop Desmond Tutu have been long-term advocates for Girls Not Brides, a global initiative to end child marriage. Recently, Global Shaper Rebeca Gyumi made history in Tanzania by managing to pass a landmark court ruling against child marriage. Leading change under 30 is possible.

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WBG

How to sum up 2017?

The global economy improved but there were plenty of unsettling and upsetting events and trends. Catastrophic storms and flooding wrecked homes and livelihoods from South Asia to the Caribbean. Education quality in many countries fell short even as much of the world raced into the digital age. Yet extreme poverty continues to decline. Innovation and technology are enhancing the quality of life. And human capital is now the biggest driver of wealth in the world today.

© World Bank
© World Bank

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UNCTAD

Egypt launched its new e-commerce strategy in the presence of President Abdel Fattah el-Sisi this month during Cairo ICT 2017 – a trade fair for information and communications technology (ICT) organized in North Africa’s most populous city.

The Egyptian government expects the strategy – designed in close collaboration with UNCTAD during the past two years – to double by 2020 the number of businesses in the country selling products and services online. Less than 18% of big companies and just 3% of small businesses currently do so.

“Egypt aspires to harness the power of e-commerce to help catalyze innovation, growth and social prosperity in the digital economy; support and enhance trade; enable the development of new businesses and services; and increase people’s welfare,” Minister of Communications and Information Technology Yasser ElKady said.

“The strategy is a solid foundation for stimulating e-commerce growth in Egypt throughout the coming years,” Minister ElKady said. “I wish to express my appreciation for all the efforts and dedication by UNCTAD.”

The ancient nation has the potential to be one of the Arab-speaking world’s biggest e-commerce markets. Some 60% of the population is aged under 30 and increasingly tech savvy. And more than one-third of the country’s 90 million inhabitants is connected to the Internet.

Yet online commerce has struggled to take root on the banks of the Nile, where less than 3% of those connected to the web use it for shopping.

Part of the reluctance to do business over the Internet comes from entrenched social and cultural preferences for cash payments.

Along with strengthening Egyptians’ trust in online payments, which will require more effective e-commerce laws and regulations, UNCTAD’s analysis highlighted the need to roll out higher-speed broadband through the country.

Without a fast and reliable connection, businesses and customers will struggle to connect to e-commerce platforms and e-marketplaces, and companies will find it difficult to deliver digital services, such as data analytics and digital marketing.

And e-commerce won’t be able to take off unless Egypt strengthens logistics in the sector, especially in rural and remote areas. Even if more goods are purchased online, they still need to be delivered quickly and safely to people’s homes and businesses.

So the strategy aims to:

  • Improve the supply of high-speed broadband, especially in rural areas
  • Modernize Egypt’s postal authority
  • Bolster the legal and regulatory framework for e-commerce
  • Build trust in online payments
  • Strengthen training and apprenticeships in areas like online store management, digital marketing and data analytics
  • Encourage government employees to use e-procurement for low-value goods such as office supplies

While devising the strategy, UNCTAD and the Ministry of Communications and Information Technology worked with the World Bank and other United Nations agencies, as well as Chinese e-commerce giant Alibaba. Funding was provided by US multinational financial services corporation Mastercard.

As the UN focal point for the development aspects of science, technology and innovation, UNCTAD gives top priority to helping developing countries use ICTs to participate more effectively in the global economy, and ultimately improve the lives of their people.

In addition to national e-commerce strategies, UNCTAD helps developing countries to measure their readiness to take part in the digital economy and to assess the effectiveness of their ICT policies.

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