The accelerated transformation of Africa’s digital economy – Grace Obado

Grace Obado
Grace Obado (Kenya) is Associate Professor of International Relations and Sustainable Development at IE University and Schiller International University, and serves on the Board of the Choiseul Institute in Spain and the Advisory Board of Spain’s Casa Africa.

While COVID-19 has brought many economic sectors to a standstill around the globe, the digital economy has emerged not only as a resilient sector but also as one with the ability to register exponential growth in challenging times. This means that countries with high levels of digitalization will suffer less from COVID-19 driven disruptions. For instance, in highly digitalized countries, students from primary to tertiary levels of education have been able to migrate to online learning within a short time period. These countries have also been able to offer telemedicine services to their citizens, their companies have been to sell goods through online platforms and allow many employees to work remotely. This is not the case for many countries and communities in Africa.

However, in the last two decades, African countries have been increasingly investing in the digitalization of their economy with countries like Kenya leading in Fintech solutions (companies that provides financial services through software or other technology and includes anything from mobile payment apps to cryptocurrency) to M-Pesa, mobile money transfer technology. Investment in digitalization has not been homogenous across nations and sectors. COVID- 19 or not, African countries could benefit hugely by investing in the digital economy. According to a McKinsey report, the digital economy alone could offer between 20 to 30 million jobs a year between now and 2025, if the internet continues to grow at the same pace as mobile telephony. This could also absorb millions of young Africans streaming into the job market every year.

To spur the digital economy in Africa, challenges such as energy deficit, the digital gender gap, promoting STEMS in schools and creativity should be addressed with expediency. This would require private-public partnerships that would lead to inclusive economic growth.

While African countries try to overcome COVID-19, it is important that they allow space, as critical partners, to the private sector. Across the continent, we should see more private sector action across the board. In countries such as Nigeria and South Africa business leaders and philanthropists are contributing significantly to government stimulus packages. These public private partnerships are excellent and about real commitments to sustainable development and the “Africa We Want” (better education and health results, gender equality, poverty eradication, sustainable growth, etc.). Developing long-standing and productive ways of working between the public and private sectors will be useful beyond this pandemic. Because of increasing urbanization across the continent and climate change, growing human-animal interaction might breed another pandemic or humanitarian situation again and we must be ready.

This perspective was originally published in Collateral Benefits, and is republished here with permission.