Africa: Harnessing Digitalization for Africa’s Transformation

Digitalization is among the highest transformative opportunities in the current world. The impact of the internet on economic growth and prosperity is immense these days. The digital technology is driving economic developments. It is crucial instrument to ensure inclusive and sustainable development. It becomes an engine of development and transformation. In today’s world, digitalization accelerates business activities, services, trade transactions, development activities and investments. The technology is easing life and interactions across the globe.

The economic contribution of the digital technology is growing highly. According to World Banks 2023 report, the digital economy makes up more than 15% of the global GDP and has grown by 2.5 times faster. By 2030, the digital economy is projected to contribute up to 30 percent of world GDP and create 30 million jobs. This shows that the positive impact of the digital connectivity on the economic growth and prosperity is growing continuously. The development of the sector by itself is also unpredictable. New innovations and advanced technologies are continuously emerging in the sector.

Despite improvements in recent years, Africa’s digital connectivity remains compared to the rest of the world. According to World Bank, in 2022, only 36% of Africa’s population had access to broadband internet. The quality and accessibility of broadband internet in the continent remains undeveloped, though it varies from region to region and countries as well. Similarly, per the World Bank reports, Africa has the widest digital gender gaps worldwide, with the greatest disparity between men and women.

Considering the role of the digital sector for economic development and to transform the continent’s digitalization, the African Union launched the continental Digital Transformation Strategy 2020-2030 initiative that aims a comprehensive approach to develop a vibrant, safe and inclusive digital economy in Africa. Similarly, the World Bank Group also launched the Digital Economy for Africa (DE4A) in 2019 aiming to ensure every individual, business, and government in Africa is digitally enabled by 2030.

The goal of the two initiatives is to “combine the development of infrastructure for connectivity, building digital platforms for access to finance and markets, creating new markets for entrepreneurs, and skills while also building regulatory frameworks that address emerging risks, such as competition, privacy and security”, according to the World Bank.

In 2020, Africa announced the implementation of the African Continental Free Trade Area (AfCFTA) which aims accelerating intra-African trade and boosting Africa’s trading position in the global market by strengthening continental trade interactions. Digital technology can ensure and catalyze the continental free trade area by easing doing businesses and trade transactions across the continent. Considering its contribution for the overall development of the continent’s economy, accelerating the digital transformation and realizing the continent’s 2030 digital transformation plan is crucial in this regard.

Alongside the 37th Ordinary Assembly of the Heads of State and Government of the African Union, Ethiopia had hosted a parallel session on continental digital transformation. The discussion was attended by high level government officials, stakeholders and leaders from various African countries and financial sectors. The focus of the event was on transforming the continent’s digital connectivity and advancing access to digital technologies in the continent. The discussion which was held under the theme, “Harnessing Digitalization for Africa’s Transformation” was organized at the recently inaugurated Adwa Victory Memorial here in Addis Ababa.

Speaking at the opening session of the discussion on continental digital transformation, FDRE President Sahle- Work Zewde said that the rapid revolution of technological landscape around the world is changing the geopolitics, economies, and interactions across the globe. The technological development is a blessing both for the developed and developing world as it opens opportunity to transform their development endeavors in all sectors. Especially, the revolution in the digital technology comes with an opportunity to transform every sector.

According to President Sahle-Work, it is high time for Africa to properly harness this opportunity to transform the content’s socio-economic developments. The digital sector can open African countries opportunities to improve and transform the overall development endeavors and introduce innovative ways. “By increasing digital transformation, Africa can allow huge economic growth, to increase productivity, innovation and job creation,” she stated.

According to President Sahle-Work to ensure inclusive and sustainable development in the African continent, it is crucial to accelerate digital transformation in the continent. As to her, speeding up digitalization is convenient for dealing with pressures and providing quick solutions for problems. The expansion of digitalization, according to her, will play a significant role in creating the prosperous Africa that the continent wants to see by 2063.

President Sahle-Work stated that Ethiopia is striving to transform the sector. The digital transformation in the finance, telecommunications, and artificial intelligence sectors is showing significant development in the recent years. She underlines to transform the continent’s digital sector in advance with Agenda 2063 so as to realize the continent’s prosperity.

For her, transforming the digital sector in the continent can empower citizens of the continent and improve participation. Particularly, access to digital sector improves access to information access and can enhance education as well as financial inclusiveness. “Moreover, this digital advancement can reduce poverty and ensure sustainable resources management in Africa,” she stated. Improving access to digital infrastructure in the continent has the opportunity to create brightest and more inclusive future for all African citizens.

“A strategic approach is crucial for Africa’s digital transformation because unplanned focus could maintain existing inequalities, leaving vulnerable communities behind,” the president stated. As part of its effort to transform the sector, in alignment with Africa’s digital transformation agenda 2020-2030, Ethiopia has launched National Digital Transformation Strategy 2025 which outlines goals, priorities and national plans and sectors. The overall goal of the digital transformation strategy is creating inclusive digital economy and encouraging developments are registering.

The results of the digital strategy are encouraged in Ethiopia as it enables rapid growth of telecom infrastructure, digital financial services, internet connectivity, and adoption of computer technologies such as artificial intelligence (AI).