Africa’s digital economy is estimated at $115 billion today and is expected to grow six times to $712-billion by 2050, according to a 2022 report published by Endeavour Nigeria. The opportunities and benefits of digitisation are extensive. We saw this during the pandemic when connectivity and mobile devices became the lifeline for many Africans when they needed to keep their homes, businesses and communities functioning despite widespread disruptions. The Covid-19 pandemic also accelerated demand for digital solutions and digital financial inclusion, super-charging interest in digital innovation across the region. 

None of these benefits, however, will have a real impact on the lives and livelihoods of African citizens going forward if policy does not keep up with technology and innovation. Some existing policies and regulatory practices are not enabling the growth of the digital economy and are in some ways preventing a number of African States from fully reaping the economic and socio-economic benefits that connectivity and technology can provide. Restrictive data-localisation laws, unclear and underused adequacy requirements and a lack of standardisation in policy and legislative terminology remain major hurdles for the continent. 

Given the historic infrastructural deficit that exists across the developing world, it is important that we focus on collaboration, innovation and putting the necessary infrastructure ecosystems and policy frameworks in place to increase Africa’s participation in the digital economy as well as its competitiveness. 

Africa needs to prioritise and promote strong collaboration between the public and private sector and strategic partnerships that can bring about meaningful transformation. This is only possible if enabling laws are promulgated on the continent. At present, Africa’s digital opportunities are concentrated in four economies: Nigeria, Kenya, Egypt and South Africa and this has to become more inclusive. The services layer on the continent also needs to be improved so that governments, businesses and individuals can benefit from the opportunities of the data-driven global economy.

Finally, we need to address affordability by democratising access to 4G and 5G-enabled devices like smartphones, tablets and computers. Looking at data from the markets in which Vodacom operates, it is clear that as networks evolve, access to affordable smartphones is one of the numerous constraints to progress. As such, Vodacom, through Vodafone, is working with the UN Broadband Commission to come up with solutions to address the device access gap. Together, we are trying to develop innovative ways to deliver more affordable smartphones to the most vulnerable societies across the globe.

The problem needs to be approached with an innovative mind-set. Before the internet, being able to sell to consumers across the world was a privilege only enjoyed by large, wealthy multinationals with production and sales capabilities spread across the world. Connectivity has, however, levelled the playing field. A business’ physical presence or geographic location is no longer a barrier preventing it from reaching consumers around the globe. Thanks to online marketplaces and global payment networks, an SME in rural Kenya can connect with a customer thousands of kilometres away. 

However, this innovation is only possible if data protection laws and regulations are created to enable the use of remote technologies like cloud and data services. The ability to transfer, store and process data across borders has caused a 10.1% increase in global GDP over the past decade, with several strong examples of how cross-border trade agreements can support and enable the free flow of information and economic opportunity across countries. 

Here, the African Continental Free Trade Area (AfCFTA) holds incredible potential to bring about similar change. However, until the negotiations have been completed and it has been ratified by more states, many African economies will not be able to enjoy the same economic benefits as their international neighbours because the development and enactment of data policies simply isn’t keeping up. Policy and regulatory reforms ought to be undertaken to incentivise and protect investment.

From an infrastructure perspective, we need to come together as an international community to connect the 3.7 billion people who are still unconnected. This, again, comes down to policy. To promote investment in digital infrastructure, we must make sure that there is policy certainty on investments in network infrastructure, the availability of resources like spectrum, as well as clarity and a light touch approach to regulation around infrastructure build rules. This is necessary to guarantee that investments are made wisely, and that infrastructure is deployed efficiently.

While the pandemic showed us what we can do with connectivity and digital technologies, it also highlighted how much more work there is still to be done. With strong partnerships, strategic investments, the necessary infrastructure and strong supporting policies, African economies can harness digitalisation as an enabler of socio-economic development. If we are to address the realities of digital access and financial inclusion, high unemployment rates, poverty and social inequality in Africa, we need to prioritise digital transformation across Africa with a matter of real urgency. In doing so, we can positively and significantly boost Africa’s economic growth. DM/BM

Author: Stephen Chege, Chief External Affairs Officer for Vodacom Group

The author of this article will be a speaker at the Africa Shared Value Leadership Summit hosted by Shared Value Africa Initiative in Kigali, Rwanda, on 25-26 October 2022. For more information on the Africa Shared Value Leadership Summit and its organisers, click here.