The potential and risks of the digital economy in Africa

In its latest report on the information economy entitled “Digitization, trade and development” [i], the UNCTAD highlights the growing impact of digital technology on African economies. While Africa continues to have the lowest rate of broadband Internet penetration, it is also the fastest growing continent in the world. Big data, artificial intelligence, mobile banking and 3D printers are already transforming the ways of the old economy. But in Africa, the breakthrough of the digital economy is particularly impressive.

By 2025, the digital contribution to African GDP is expected to catch up with Sweden and Taiwan. Are we not already talking about the “leapfrogs” of Africa in digital through mobile banking, e-commerce or even e-government? Faced with its many constraints – geographical, sanitary, ecological or agricultural – Africa has had to constantly look for new models and innovate to develop. Let’s take health as an example: in some countries in sub-Saharan Africa, some doctors are so rare in their specialty that they are only one per million inhabitants. Can we imagine a better opportunity to develop e-health?

Online retail is booming, with many actors benefiting fully from the dynamism of African demography and the increasing penetration of broadband Internet on the continent. Banking on this impressive growth, a company such as Jumia has gone from 35 million euros in sales in 2013 to 289 million euros in 2015. But beyond e-commerce and mobile banking, the digital economy gives rise to other projects with a collaborative dimension. This is the case, for instance, of the Agritools platform, which shares African technology initiatives to the benefit of farmers, creating a forum for high-level technological solutions for producers.

Today, Africa is forced to innovate in order to bypass its natural constraints and catch up with technological delays. But the next step in Africa is the move to “reverse innovation”. At the moment, Africa is adapting technologies from developed countries. Africa must now create its own innovations that could be adopted by developed countries.

Similarly, while the digital economy offers promising prospects for the future, we must not forget the risks associated with such a development. Several elements must be brought to our attention so that the new digital economy is inclusive and benefits the greatest number.

First of all, digital takes naturally the speed of states, which always take time to react to innovations. Governments must absolutely legislate for the protection of digital data so that the privacy of our citizens and the competitiveness of our businesses are preserved. Moreover, the digital divide is a real danger: inequalities in the use of these technologies can quickly appear between large and small companies, but also between different African countries. Finally, digital education must be placed at the heart of school curricula. The mastery of these technologies by our fellow citizens is essential in order to fully achieve the integration of Africa into the world economy.

Published by

2 thoughts on “The potential and risks of the digital economy in Africa

Leave a Reply

Your email address will not be published. Required fields are marked *