Regional digital transformation can help power development in Africa

From selling clothes through an app in Senegal to offering cellphone repair services in Liberia to academic research at a university in Ghana, digital technologies can unlock economic and social benefits. In 2021, mobile technologies and services generated $4.5 trillion of economic value added, or 5 percent of GDP, globally. This figure could grow to nearly $5 trillion by 2025 as countries increasingly benefit from the improvements in productivity and efficiency through greater uptake of mobile services. For Africa, the time to invest in those gains is now. The digital economy could offer new avenues for growth and innovation, create jobs for a growing population, and give millions of people access to more opportunities.

The Perennial Challenge

But for many in Africa, development can seem like an elusive concept. The continent is blessed with a vast array of natural resources and human capital. However, environmental disasters, energy crises, lagging human capital development, high unemployment, a growing population, and the impact of COVID-19 and global conflicts have derailed economic and social growth. Predictions are that African youth will make up 42 percent of the world’s population by 2030; they will need jobs and access to opportunity.< That’s one of the reasons why a digital transformation needs to be addressed now. Without it, an increasingly frustrated African youth may miss the opportunity to become a demographic dividend.

Unlocking Africa’s Digital Potential

The most recent call for digital transformation came at the January 2023 Digital Economy Regional Conference in Abuja, Nigeria, hosted by the Economic Community of West African States. Those at the conference reiterated the need for concerted efforts to power digital integration and focus on regional coordination. A key objective of the African Union is to build a secured single digital market in Africa by 2030, an effort supported by the World Bank’s Digital Economy for Africa (DE4A) initiative.

Significant evidence underscores the links between digital technologies and economic growth, innovation, job creation, and inclusive public service delivery both at the national and regional levels.The question is: how does a continent of over one billion people, with 2000 spoken languages, overcome its much-celebrated diversity and find common ground to build an integrated future for digital transformation? One answer is through the commitment to digitally enable every person, business, and government by 2030 on the continent. African leaders recognize that digital transformation is critical to their development goals. Research has shown that a 10 percent increase in access to mobile broadband could lead to an average 1.5 percent increase in GDP, and in Africa, the boost could be even higher, at 2.5 percent.

Laying the Foundation Now

Much remains to be done. A single digital market across Africa requires investment and planning. Building crucial digital foundations, known as digital public infrastructure – secure digital IDs, digital payments, and data sharing platforms – needs to start now, so Africa can move nimbly and efficiently to respond to future crises and expand access to finance and government services. Trust is a cornerstone for a successful digital future, so creating safeguards, like rules and laws around data protection, security, and privacy, harmonized across the region are vital. currently, only around a quarter (22 percent) of West Africans can use the internet because of a variety of challenges ranging from access to affordability to lack of the requisite skills. < Digital identification, which is central to the digital economy, also requires significant investment. Around 500 million Africans are without official proof of identification, which restricts their ability to shop, sell, learn, and get healthcare and social services online. It is important that policies and regulations such as data protection and cybersecurity are developed in parallel to foster trust in the digital economy.

Leveling the Playing Field

And, of course, not all countries are the same. Unlocking the region’s digital potential also requires addressing the significant disparities between countries on their progress toward digital transformation. While some countries are struggling to boost broadband connectivity, others are delivering inclusive online services for both the public and private sectors. Leveling the playing field is one way in which regional integration can help.

The Abuja conference made strides toward such integration across Western Africa. Conferees agreed that harmonizing legal and regulatory frameworks, regional financing for digital infrastructure, and investment in the development of digital public infrastructure were vital. The ministers, regional leaders, and internet entrepreneurs at the conference reaffirmed their commitment to building the foundations of a digital economy and a better future for young people in Africa.