Four ways digitisation can unlock Africa’s recovery

This article by Joakim Reiter, External Affairs Director at Vodafone Group, first appeared on weforum.org on 10 June 2020.

The full human cost of COVID-19 in Africa is not yet known, but it is likely to be significant. Importantly, for many Africans, the longer-term socio-economic consequences of the pandemic is likely to be just as material as the health impact of the virus itself.

Decades of progress in poverty alleviation are now at risk. A recent report from the UN Secretary General suggests that the global poverty rate is projected to rise for the first time in 30 years pushing as many as a half a billion people into poverty. According to data from the World Bank, Africa will experience its first recession in 25 years.

Whilst there is no silver bullet for Africa’s recovery, we know that investment in digitisation will have to play a part. As the UN Secretary-General said recently about the post-COVID-19 world, “the future will be much more digital than the past.” There are some promising signs of the recognition for broad-based digitisation as one of the key learnings from this crisis. In March 2020, President Kenyatta of Kenya urged the private sector find ways to expand mobile money in order to reduce COVID-19 transmission through cash. As the African Union Commissioner Amani Abou-Zeid has also highlighted: “COVID-19 crisis has become the single biggest catalyst for digital transformation and has moved digitalisation from a niche market into mass adoption".

But there is still a long way to go until everyone can feel the benefits of a digital society on the African continent. In Sub-Saharan Africa, more than four in five students still lack Internet access, and by some estimates, only 1% of total retail sales are made online, compared to 24% in China.

Digital development at risk of stalling?

At the very moment African digitisation is needed the most, it may also be at threat.

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. To put this number into context, Vodafone – one of the biggest investors in African telecoms infrastructure – spends around $1 billion annually on network upgrades in its markets across the continent.

Under prevailing conditions, private investments are not set to increase. The latest data from the UN also shows that over $100 billion in capital has flowed out of emerging markets since the COVID-19 outbreak began. In addition, African governments’ budgets are tightening, and priority will have to be given to citizens’ most imminent needs, while we regrettably see some donors diverting foreign aid towards their own domestic reconstruction.

All of these factors pose a real challenge for the progress towards achieving Sustainable Development Goal nine to provide universal and affordable access to the internet across Africa, as well as leveraging digital technologies for all the Global Goals.

Unequal access to connectivity and digital tools has already become one of the new dividing lines within and between societies, a trend that is only likely to accelerate as we head into a global economic recession.

Four steps to achieve a digital society for all Africans

To avoid this, and to ensure Africa can fully leverage the learnings from COVID-19 to build a more resilient, inclusive and sustainable society through digitalisation, the international community must mobilise all of its efforts and resources. Backed by blended financing from the private sector, government and international development partners, a strong roadmap for African digitalisation should involve four interlinked actions:

1. Bridging the digital divide

Broad-based digitisation, especially for those people at the bottom of the pyramid, is an effective measure to ignite and sustain economic growth, and it starts with ensuring access to digital infrastructure for all. A study by the International Telecommunications Union (ITU) found that expanding mobile broadband penetration by just 10% in Africa would equate to an increase of 2.5% in GDP per capita.

Yet, traditional models for investing in digital infrastructure do not stack up in many rural or remote areas, due to a combination of high deployment costs, regulatory barriers and poor returns on capital. The international community must immediately unlock development financing to spend on new models of digital infrastructure investment, including financing partnerships between mobile operators and government to build shared infrastructure. Taking big bets on experimental technologies and innovations is also key. A good example is our partnership with Google on Project Loon in Mozambique, which aims to provide 4G coverage across a 100,000 km² area through a low-orbit balloon network. In parallel, we are exploring various alternative models in Africa, including OpenRAN and satellite, with the same objective.

2. Invest in digital inclusion and skills

Nearly half a billion people in Africa have mobile broadband coverage, but do not access it. This clearly points to more complex barriers to digital inclusion than simply network coverage. UNCTAD in a 2019 study found that low digital skills and demand were the biggest barriers to digital entrepreneurship in developing countries.

Investment must be channelled into broad-based skills development in order for all citizens to get the most out of connectivity and develop an African digital ecosystem of local digital content and services. This begins with governments integrating digital skills into national curricula for students, but should be extended out with businesses and community organisations providing life-long learning on digital topics. This will create informed demand for digital solutions that generate social and economic benefits in tune with specific local needs. The Africa Union’s Digital Transformation Strategy provides an excellent proposal through their Massive Online Digital Skills for All programme.

3. Digitise public services, at scale

Whilst many governments across Africa have driven innovation in digital public services, there are few examples that deliver at scale. The COVID-19 crisis has accelerated initiatives around e-health and e-education. In the past two months, the use of our e-learning platforms has surged across Africa, often many hundreds percent, backed by governments working with telecom companies to zero-rate online education resources. Public-private partnerships should now be established to scale these efforts, with the support of international development finance. Providing the entire public with high-quality digital health and education services would lock in the digital society for good.

4. Close the digital gap for small and medium enterprises

Those small and medium enterprises that have been able to ‘digitally diversify’ have proven themselves to be more resilient during the COVID-19 crisis. Those that did not now have to play catch-up in the midst of an economic crisis. To support these businesses, we must leverage existing and create new technology offerings tailored towards micro-, small and medium sized enterprises in Africa, rolled out with the support of government. A good example is mobile money, where many African countries already have made significant headway. Mobile money fulfils the twin objective of supporting (financial) inclusion for the unbanked, while underpinning the growth of a new ecosystem of e-commerce, payments and financial solution for entrepreneurs. MIT research also showed that access to the M-Pesa mobile money platform lifted 2% of households out of poverty in Kenya.

Finally, for all of these actions, we must ensure that acceleration of digital does not cement or exacerbate existing inequalities. There is already a 34% gender gap in digital access in sub-Saharan Africa. A growing body of evidence highlights that women’s livelihoods will be disproportionately impacted by the crisis, including the risk that many girls are pulled out of education for good during or after lockdowns. If we do not proactively address these inequalities, digital growth across Africa will remain skewed along gender lines.

The time for a digital Africa

Collectively and through true multi-stakeholder partnerships, we must all rally around African digitisation as one of the key development challenges of the decade. Ensuring broad-based, inclusive and sustainable digitisation has become one of the most urgent developmental issue of our generation.

Whilst the global economic outlook is dire, COVID-19 has shown us that we have a unique opportunity to rapidly harness digital technology to build more prosperous and equitable societies for all. It is an opportunity we must take together, now.

Find out more about our work to keep everyone.connected.

This article was originally published on weforum.org on 10 June 2020.

Find out more about our work to keep everyone.connected.