24 Sep 2020 / Article

Africa’s digital deficit: filling the gaps

With a positive impact of 1.5% on GDP and a 0.7% reduction in poverty per year, transitioning to a digital economy is a fundamental challenge for African countries. Coordinating public and private initiatives is key to making it happen. 

Laying the groundwork for private sector initiative

Creating the conditions in which innovation in the industry can grow necessarily involves strong and resilient infrastructure. Operating across Africa, Huawei, a global provider of information and communications technology, aims to activate 500 million extra intelligent connectivity opportunities by 2023. These will enable the same number of devices, infrastructures, digital services and people to connect to a global broadband structure. “This digital foundation is needed to accelerate funding, financing and public private partnerships”, says Edwin Diender, Chief Digital Transformation Officer at Huawei EBG.

Thinking along similar lines, Cina Lawson, Togolese Minister of Post, Digital Economy and Technological Innovation, sees private sector participation as an essential part of the equation. “We need to improve and invest a lot in infrastructure but this should not be done by the state”. For her, public private partnerships “make sense” as they allow the state to intervene in those areas of infrastructure that are of little interest to the private sector. 

Giving a role to the private sector is also an integral part of Ethiopia’s national digital transformation strategy. 

“The government had more of a risk manager role and now we are learning to become a development enabler”, Myriam Said, Digital Advisor to the Prime Minister of Ethiopia

Another key development driver is widespread biometric identification. On a continent where governments are unable to identify large numbers of their population, leapfrogging to Digital ID can accelerate development and access to digital government and private sector services. “One of the major projects that Togo is to launch is the Biometric ID Project in order to identify all its citizens”, says Cina Lawson. Myriam Said agrees. For her, establishing digital ID is one of the fundamentals if the Ethiopian government is to spearhead the digital transformation. 

Digital and biometric identification play a key role in developing government (e-governance) and commercial platforms, which sit at the heart of any digital economy (and which governments have been slow to deploy). 

“The first layer [to establish e-governance] is infrastructure, the second layer is biometric ID, and on top of that you can build services that are better targeted because you have an opportunity to identify citizens. You know who they are, you know what their needs are, and you can design better policies”. Cina Lawson, Togolese Minister of Post, Digital Economy and Technological Innovation

From the perspective of Serigne Barro, CEO of People Input, an ICT company in Senegal, governments need to open up their e-governance projects to local players. “The biggest business supplier in all our countries is the government. […] We must find a way to work together in a win-win collaboration to be able to provide what our markets are expecting in terms of digital tools, digital services and features”. 

And on a regional level?

Fragmented markets are an obstacle to economic development. Unlocking regional market barriers involves the harmonisation of legislation, regulation and infrastructure. “We need to interconnect physical infrastructure but also ensure that applications and platforms currently being designed by governments can interoperate and interconnect”, says Cina Lawson. She points to efforts being made in this direction through working groups within the ECOWAS community. “When we design policies that have an impact on a national and regional level, we also create working groups to make sure that we get to a point where we can work together”.

Serigne Barro advocates governmental action to roll out market entry regulations that, he says, would “force international players to found joint ventures with local players”. This would prevent scenarios whereby local players in the mobile money ecosystem, for example, compete with a global tech giant that has partnered with a pan-African bank. “We need partnerships with all these western international players to be able to build together something tailored to the African market”. 

Ethiopia and Togo: forging ahead

Modernising policies and legal frameworks to address digital economy needs are pivotal for the digital transition. Over the last two years Ethiopia has undertaken sweeping and comprehensive political and economic reforms. “From an infrastructure perspective, and specifically for telecom, the government has made significant progress by enacting laws that liberalize the sector and by establishing an independent agency, a regulator for the sector. […] The current top priority is to have a total of three licences [for mobile network operators] by Q1 21, as well as to divest 40% of the state monopoly in telecom”, says Myriam Said. Opening up the sector has nevertheless been significantly delayed. Two licences for mobile network operators were initially to be issued in March 2020. but were then postponed until the first half of 2021. 

In preparation for future competition, Ethio Telecom has optimised, upgraded and expanded its network. “This enabled it to make a very strategic move during the pandemic and actually […] reduce the average revenue per user in a bid to stay competitive”, says Myriam Said. She added that working on value added services is one way to maintain the drop in tariffs. “We have seen [the private sector supporting Ethio Telecom] in innovative ways over the last five months, from service providers expanding internet connectivity to additional services built on the connectivity layers”. What’s more, further to Ethio Telecom’s price cuts, digital penetration businesses saw an uptake of their digital services.

Other major steps include the launch of Ethiopia’s ICT park that is set to receive investors in the digital economy. Also, in terms of soft infrastructure, the country has raised over $100 million for digital start-ups and is in the process of enacting the Start-up Act, which aims to provide customized support for start-ups and incentives for entrepreneurs. 

Togo is also moving ahead. Investment in 25O km of fibre network in Lomé, the capital city, has provided access to critical public services. Further to Covid-induced restrictions, the administration introduced Novissi, a government-to-person cash transfer programme, to support its informal sector. “The first innovative thing about the programme was the speed of its execution. From on-boarding to receiving the phones, everything was digital”, says Cina Lawson. Lasting for two months, 1.3 million people registered and $20 million dollars were transferred to 570 000 beneficiaries. The programme was not only efficient but well-understood.

Ensuring access to governmental programmes requires the wide distribution of mobile phones. “Our objective is for every Togolese citizen to have access to a mobile phone and an internet connection within the next 18 to 24 months”, says Cina Lawson.

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