Digital economy is changing face of Africa
Africa’s rapidly growing digital economy is expected to be bigger than traditional industry sectors such as agriculture, retail and transport by 2020 according to new data in your blogger’s possession.Using the latest methodology the researchers found that the digital economy is growing in significance, and is 30% larger in real terms than the 2015 estimate. And not only is it growing, but it’s rapidly changing how businesses and the African economy operate and has the ability to revolutionise education, global business exchange, innovation and trade.For example, data collection, processing, transmission, storage, sharing and creation obtained from users of different platform already underpin almost everything Africans do today. In 2016, the digital economy accounted for over 10 per cent of Africa economic output, while the application of digital technologies such as cloud computing, data analytics, and the Internet of Things are set to increase Africa’s gross domestic product by US$200 billion by 2025. In particular, African countries like Nigeria, South Africa and Egypt are reaping the benefits of data, while in Kenya, Tanzania and Uganda mobile technology is said to be contributing and supporting 3 million jobs directly and indirectly in the three countries.Overall, the social impact of data and mobile technology is even greater. At the moment, 12 per cent of Africans have access to the mobile Internet, and by 2025, an additional 500 million Africans will be able to shop, listen to music, access information, upload pictures, and do other online activities made possible by data-fuelled mobile and digital technology. Add to that the millions of machines expected to become connected in the next eight years through the Internet of Things across the continent. Africa’s digital transformation has largely been powered by a strong stream of information across Africa through mobile technology and the Internet. While the advances in technology have enabled a consumer in Africa to purchase a product online, there is also enormous responsibility to protect African consumers business data by the service providers.
That aside, the internet could have been purpose built for Africa in my view. It has connected Africans with the world, given them new opportunities including helping businesses transform to meet the needs of today’s African consumers.It’s getting harder and harder to separate the digital economy from the rest of African economy which can only be a positive, because it means technology is being embraced everywhere from healthcare to education, from agriculture to the delivery of government services. The challenge now is to ensure that Africans don’t take their foot off the accelerator because the health of the digital economy will be critical to Africa’s future prosperity. The significant impact of the internet is more than well documented and now the economic value of all things digital is well understood by both stakeholders and public.The data I have shows that digital economy has expanded and updated analysis and the evidence is clear that digital technologies are driving massive economic change and disruption and also help African countries respond to the national challenges of maintaining growth in living standards and productivity.The data also digs deep at how businesses are increasingly using digital and social to not only connect with their customers, but to drive internal transformational change through the next wave of related technologies such as the cloud, data analytics among other technologies.The digital economy is changing from being a standalone industry to being embedded in businesses across the economy. Using an updated model, researchers now estimate that the African economy was twice bigger in 2016 than it otherwise would have been because of the productivity impacts of digital technologies.Higher productivity means Africa has greater output for its inputs to production through the likes of increased competition, reduced prices, greater business efficiencies, and innovation for better goods and services.All i can say after reading this report is that digital technologies clearly have the potential to support Africa transformation across different businesses, from traditional areas such as retail and manufacturing, to service businesses such as banking and business services.