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Can Africa deliver on its ambitious digital transformation goal?

The African Union is targeting a continent-wide digital single market by 2030 and there's much progress being made, but some fundamental challenges have yet to be overcome

If the countries of Africa achieve their goal, by 2030 the continent will be home to the world’s largest free-trade zone – and at its heart, a digital single market that will drive economic growth and development across all 54 nations.

According to the African Union’s Digital transformation strategy for Africa, by 2030 all Africans should have access to at least 6Mbps broadband connectivity “all the time, where ever they live in the continent” at an affordable price of no more than one US cent per megabit. People will be able to buy a smart device manufactured in the continent priced at no more than $100, and use it to access online content and services of which at least 30% are developed and hosted in Africa.

The opportunity is enormous – according to the International Telecommunication Union (ITU), every 10% increase in mobile broadband penetration in Africa would yield an increase of 2.5% in GDP per capita. A report by Google and IFC, part of the World Bank, predicts that growth in internet adoption could add $180bn to Africa’s GDP by 2025.

In December 2022, US president Joe Biden announced a $350m investment to support the African Union digital strategy, with a promise to facilitate over $450m in financing.

Sounds great, doesn’t it? But it’s not the first time we’ve been told that Africa is on the verge of leapfrogging its digital economy to parity with global competitors. Consider M-Pesa, for example, the Kenyan mobile money service that launched in 2007 and in 2010 was proclaimed by MIT as the most successful mobile-phone-based financial service in the developing world – made possible by mobile networks reaching the parts that conventional landline telephony could never reach.

M-Pesa has certainly been a success – today, it supports more than 51 million customers across seven countries in Africa, making $314bn in transactions every year, according to co-owner Vodafone. But roll-outs in several countries failed to gather the same take-up, and promises of M-Pesa revolutionising e-commerce throughout Africa did not materialise – according to a May 2023 African Union report, Africa has the lowest share of population (30%) engaged in online shopping. There are other examples of digital best practice – but less evidence of making everywhere as good as the best available.

So, what is the state of digital in the world’s second-largest continent? Is that ambitious 2030 goal achievable?

Progress and challenges

In May 2023, Computer Weekly was invited to Gitex Africa – billed as Africa’s biggest technology event, brought together by the organisers of Gitex, the Middle East’s premier tech conference. Attracting ministerial representation from 30 countries and investors from all over the world, it was an ideal opportunity to chart the progress and challenges of the emergent digital Africa.

Without doubt, there is a lot of work underway and progress being made. Some 10 years ago, the internet economy accounted for just 1.1% of African GDP – according to a study by Accenture, by 2020 it had reached 4.5%, totalling $115bn. By comparison, in developed countries like the US the figure is nearer to 9%.

Four in 10 Africans now have internet access (60% via mobile phones) and people can buy entry-level devices for as little as $40 – but that’s still equivalent to 80% of a month’s wages in some countries.

According to Google/IFC, Africa has nearly 700,000 software developers, but more than half are found in just five countries: Egypt, Kenya, Morocco, Nigeria, and South Africa.

Even in those illuminating statistics, the challenge for digital Africa is apparent – put in simple terms, there’s always a “but”.

To many Westerners, the difficulties may appear intractable. Within the continent, internal supply chains often remain configured around old colonial links – in some cases, goods going from one African country to another have to be shipped via Europe; similarly, much internal internet traffic still gets routed through Europe or the Middle East.

Geopolitics is different in Africa and potentially a hindrance for cautious Western investors. Gitex Africa hosted Russian exhibitors, which would be considered unacceptable today in the West. Huawei was a major sponsor of the event – unlike its messaging in Western economies, the Huawei keynote speech was overtly themed around the promise that China is here to help. The United Arab Emirates is the backer of Gitex Africa and had a high-profile presence on stage at the conference.

But for those who can see beyond issues of history and politics, there is a desire and recognition that digital is Africa’s future.

“Digitisation is no longer an option, it’s an obligation,” says Désiré-Cashmir Kolongele Eberande, minister of digital transformation for the Democratic Republic of Congo (DRC).

“But digitisation is not the end, it’s a process. For the Congo [for example], we just started the experience of digitisation a few years ago.”

A trigger for unification

Lacina Koné is director general of Smart Africa, a Rwanda-based non-profit with a mission to accelerate digital growth across the continent. He says digital transformation is an essential trigger for the unification and strengthening of Africa.

“Imagine an Africa when the digital gap is no longer an issue, where every African would have access to an affordable internet connection. Such infrastructure should not be a luxury – it’s a need, like drinking water, or electricity,” he says.

However, when digging into the challenges in individual countries, rather than continental ambitions, harsh reality comes quickly to the fore.

“It’s a mixed bag,” says Monica Musenero Masanza, minister for science, technology and innovation in Uganda.

“In some aspects, there is visible progress. In other aspects, we’re yet to work out what we have to do. In Uganda, we have about 40% broadband availability. Many states struggle with how to get funding [for infrastructure projects] and that slows things down. We need payment systems that are continent-wide. We don’t have the logistics solutions. But if we are determined, we can catch up.”

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According to the World Bank, two-thirds of Africa remains unconnected. Inhospitable physical environments and largely rural populations make laying fibre broadband near-impossible in many countries. Nearly 300 million Africans live more than 50km from a fibre or cable broadband connection, according to the African Union. Even land-based connectivity between neighbouring countries is limited – most inter-country traffic goes via undersea cables. As a result, datacentres tend to be located in coastal cities.

Regional approaches are helping. The Djoliba network, from telecoms provider Orange – another major sponsor of Gitex Africa – claims to be the “first African fibre-optic backbone”. It provides secure, end-to-end links between eight countries in West Africa, via more than 10,000km of terrestrial fibre cables and 10,000km of submarine cables, offering up to 100Gbps services.

Many countries are looking to emerging satellite services such as Elon Musk’s Starlink or the UK government-backed OneWeb as a potential solution for their rural and agricultural populations. The Google/IFC study said that by the end of 2019, mobile internet in Africa covered 78% of the population for 3G and 54% for 4G. But even then, according to the International Energy Agency, in 2019 half a billion Africans still had no access to electricity.

Digital trade

At least, when it comes to connectivity, international technical standards prevail to ensure interoperability. When it comes to digital trade, it’s still something of a free-for-all. There may be 54 countries signed up to the goal of a single digital market, but they still largely have 54 different regulatory environments. Approaches to critical issues such as data protection and intellectual property differ widely.

“Policies are on paper but not in practice,” says Habiba Ben Barka, chief of the Africa section of Unctad, the United Nations Conference on Trade and Development. “A free-trade area will hopefully stimulate more tech-intensive industries.”

Only 17 countries have signed the African Union’s Malabo Convention on cyber security and personal data protection; 20 nations still have no data protection laws, and of the 34 that do, only 22 have a data protection authority to oversee those laws.

“The pace at which African countries are able to introduce and revise data policies and strategies is much slower than the constantly evolving global digital and data trends,” says the May 2023 African Union report.

“A big amount of data is being collected, processed, stored and transmitted outside Africa with no information on how it is used and re-used. African people and countries are not aware about its economic value and are not benefitting from it to build their digital economy.”

Case study: Lagos

Lagos is a coastal city of 20 million people – the largest in Nigeria. Its location brings connectivity benefits, with five undersea cables bringing over 40Tbps bandwidth capacity into the country.

The local government has enabled deployment of over 2,900km of fibre-optic infrastructure through public-private partnerships to connect schools, government buildings, hospitals, and other places of interest.

As a result, Lagos has attracted more than $1bn in datacentre investment and has become one of the most important centres for tech startups in Africa.

“Lagos is home to some of the most innovative and successful startups in Africa,” says Lagos state governor Babajide Olusola Sanwo-Olu.

“These companies have not only transformed industries like fintech and e-commerce but have also inspired a new generation of entrepreneurs and investors across the continent.”

The metropolitan area of Yaba hosts the highest concentration of startups in Nigeria, according to Sanwo-Olu.

“The story of Lagos is a testament to the collaborative efforts of both the public and private sectors in fostering development,” he told delegates at Gitex Africa.

“Our focus on fostering an enabling environment for startups and tech companies to flourish is yielding unprecedented results, creating jobs, driving economic growth, and providing solutions to societal problems.”

Lagos is aiming to become a smart city, with the implementation of more than 600 smart cameras to improve transport monitoring and management, as well as surveillance. Lagos state is introducing a digital identity system, which its government hopes will improve resource allocation and state planning. Around five million residents are on the system, with plans to add a further 10 million in the next year.

“With a new digital identification card with capabilities that enable access to benefits, electronic ticketing and so on, [the digital identity programme] further drives the digital inclusion benchmark for Lagos,” says Sanwo-Olu.

The state has also funded more than 4,000 citizens through digital skills training, including digital marketing, coding and other innovation-related courses. The government is looking at the regulatory environment, including areas such as tax incentives, intellectual property and patent protection, immigration and other enabling laws.

“Investment is pouring into the African tech ecosystem from within and beyond our shores. Global tech giants – including Google, Microsoft, and Facebook – are investing heavily in Africa, building infrastructure, nurturing talent and fostering innovation,” says Sanwo-Olu.

“The journey is not without challenges. Digital literacy, infrastructure gaps, and regulatory hurdles persist. But Africa has always been a continent of resilience and innovation. These challenges are not stopping us; instead, they are spurring us to innovate, to adapt, and to find uniquely African solutions for African challenges.”

Africa’s greatest hope lies in its youth – 60% of Africa’s 1.4 billion people are under 25. Increasing urbanisation across the continent will see 45% of Africans living in a city by 2025 – although in some countries, nearly half of GDP and 80% of manpower still work in agriculture.

A “young, vibrant private sector” is striving to make more use of digital technologies, says Ben Barka. Diversification is needed – most firms are small or microbusinesses, focused on goods, not services. Smart Africa’s Koné acknowledges the need for a “mindset change”. And then there’s the issue of cyber security.

“How do we protect digital Africans – the street vendors, the mechanics, the housewives?” says Abdul-Hakeem Ajijola, chair of the African Union cyber security expert group. “You cannot give street vendors a manual to read – they are often functionally illiterate.”

Education programmes are being set up and will be vital to enabling opportunities for Africa’s youth.

“We need to widen the population of young people with digital skills,” says Khalid Safir, director general of Caisse de Dépot et de Gestion, a Moroccan state-owned savings bank. Morocco hopes to train 15,000 young people by 2026 as it looks to become an associate country within the European Union’s Horizon research and development programme.

Training initiatives have a longer-term benefit too: “We want to make people who want to work in tech stay [in the country] rather than leave,” says Mehdi Tazi, general vice-president of the General Confederation of Moroccan Companies.

Digital sovereignty

That sense of digital sovereignty is increasingly seen as important – remember the African Union’s aim that 30% of content consumed within Africa will be created in Africa.

Ghita Mezzour, Morocco’s minister for digital transition and administrative reform, highlights the need to “make Africa a producer rather than just a consumer” of global technology, services and content.

Uganda’s Musenero Masanza agrees: “We need to grow indigenous companies in the continent so we can own the wealth they create.”

It’s a point reinforced by the African Union’s digital strategy, which states as its objective: “To harness digital technologies and innovation to transform African societies and economies to promote Africa's integration, generate inclusive economic growth, stimulate job creation, break the digital divide, and eradicate poverty for the continent’s socio-economic development and ensure Africa’s ownership of modern tools of digital management.”

That broad objective emphasises both the ambition and the challenges of digitally transforming Africa: “We do not have a choice but to integrate our markets,” says Koné.

Across the continent, there is pragmatism too: “What might be right for me, might not be right for others,” says Ousman Bah, minister of communications and digital economy in Gambia – while recognising that any one country “cannot do it alone”.

And perhaps it’s here – with the pragmatists, more than with the technologists – that the seeds of Africa’s digital transformation lie: “Our priority in Africa is not technology; it’s to solve our problems,” says Freddy Mpinda, senior adviser to the minister of digital transformation in DRC.

“Technology is there to help our education, healthcare, food supply and so on. That is our priority.”

Case study: Ethiopia

With a population of 115 million, Ethiopia is Africa’s second largest country, yet ranks only 35th in terms of GDP per capita. Barely 17% of Ethiopians have internet access – only four African countries have a lower percentage – and only 18,000 people work as software developers, according to Google/IFC, well behind continental leaders such as Egypt, Kenya, South Africa, Morocco and Nigeria.

But the Ethiopian government recognises the opportunity – and the imperative – of digitally transforming its economy.

“Ethiopia will need to embrace the inevitable digital revolution and existential challenges it presents and prepare for bold decision-making and informed risk-taking,” says the country’s 2025 digital strategy.

“If not managed proactively, technological advances can significantly impede or even lock nations like Ethiopia out of development opportunities.”

The challenges are significant. The strategy acknowledges that “Ethiopia’s digital economy is at an early stage of development with few private sector players offering digital services and some government-driven digitalisation initiatives”.

The plan focuses on four priority sectors: agriculture, manufacturing, services and tourism.

  • Agriculture: The sector accounts for 32.8% of Ethiopian GDP, 85% of the country’s workforce, and 90% of export revenue. Technologies such as internet of things and blockchain offer opportunities for farmers to enhance production, while at a macro level, the strategy identifies an integrated digital agriculture platform and support for agri-tech entrepreneurs as key priorities.
  • Manufacturing: The country is growing its apparel industry to compete with the likes of China, Bangladesh and Vietnam, and acknowledges there are more limited digital opportunities here. However, the strategy targets the expansion of new communications technologies and better digital logistics management as areas of focus.
  • Services: Export of IT-enabled services is a small sector with only four firms providing such services, according to the strategy document. Improvements in infrastructure will be key, and the government hopes to attract business process outsourcing companies and “impact sourcing service providers”, which are socially oriented non- or low-profit organisations that target employees from underprivileged communities.
  • Tourism: Ethiopian tourism is growing by 13% per year, but is restricted by a lack of internet connectivity and little data about the industry. The strategy aims to drive digitalisation across the sector, and build capacity among tourism companies to adopt digital technologies such as websites and online payments.

Meanwhile, the government is liberalising the telecoms market to promote better connectivity and mobile adoption; and a national electrification plan aims to address energy gaps that see just 31% of rural households having access to electricity, compared with 96% in urban areas.

Government programmes plan to help 70% of Ethiopians become digitally literate by 2025.

“Like many new and mostly unknown opportunities, there are risks to mitigate and lessons to be learnt to ensure our future is safe and inclusive. While these risks include cyber security threats, harmful social media content, a growing gap between the rich and poor, the risks to not leveraging digital technologies, however, are higher for developing economies like ours,” wrote Ethiopian prime minister Abiy Ahmed, in a foreword to the digital strategy.

“Ultimately, the most considerable risk is complacency in understanding and navigating our new digital paradigm.”

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