Africa:Huge opportunities in digital economy

Posted on February 28, 2015 12:26 am

The use of online services by Africans covers almost every aspect of daily life, from checking weather forecast to paying bills, arranging a travel or accessing education or health services from remote locations. Almost every aspect of life can be enhanced through some form of online service delivery. New ideas that apply digital technology to everyday situations emerge almost daily. Amid the relentless digital transformation of the African economies, more and more services are becoming available online. But there is much more to do before Africa as countries become fully fledged digital economy.This strategic update provides an overview of the dozens of individual initiatives, and outlines a number of new initiatives, that represent the progress being made by the African Governments to embrace their countries digital future.To advance Africa as a leading digital economy in the networked world, there are various steps needed to achieve genuine transformation.

The government transactions need to be end-to-end digital and agencies should provide assistance to those Africans who cannot easily access online services. As African countries moves to a greater reliance on online transactions there will be a corresponding need to improve performance and acceptance of online identity arrangements. Research has shown that Governments will need to contribute heavily in developing this critical area and making this more widely available to the private sector. A good example is Kenya where such an initiative will see businesses have the capacity to reliably identify customers by matching details from customers’ identity documents with records held by the documents’ issuing authorities. Recognizing the role secure digital mailboxes can play in secure online communication, the Kenyan Government will expand the use of digital mail and conduct proof-of-concept trials for other digital mailboxes according to a source familiar with the matter in East African country.The trials are expected to demonstrate how digital mailboxes can better and more securely connect Kenyans with essential government services.

Government in Nairobi is seeking to ensure that Kenyans have the skills required as the digital future unfolds by promoting a more cohesive approach to ICT skills development. In particular, it is developing a lifecycle approach to ICT skills, beginning with completing the development of stronger links between industry and tertiary education institutions including University of Nairobi, Kenyatta University and Strathmore University. A MasterCard survey released last year showed South Africa’s digital economy is the most developed in Africa. South Africa was ranked 33 by the index in digital readiness. According to MasterCard, rating is defined by individual country’s market ability to support and encourage digital commerce and payments.In Africa, South Africa ranks ahead of Egypt, Kenya and Nigeria. Africa’s most developed economy also emerged as the fourth fastest growing digital economy behind China, Malaysia and Thailand.

For Africa to become a leading digital economy region, ICT companies must work at the cutting edge of digital and technical innovation. Recognizing the need to encourage the development of such companies, the Governments will have to enhance the regulatory environment for innovative ICT start-up companies. Governments need to examine possible changes to improve employee share scheme arrangements for start-ups and review regulations governing crowd-sourced equity funding.Addressing barriers to adoption while maximizing the benefits of cloud computing for the whole of African countries economies would be a great move. That should include a series of actions such as changes to procurement policy to ensure that government agencies consider cloud services for ICT procurements like its happening in Kenya and South Africa.Individuals, businesses and not-for-profit organizations as well as institutions yet to engage meaningfully in the digital economy need to be given a helping hand to do so for the continent to realize full potential of digital economy.

Contador Harrison