Africa continues to make important strides with regards to the adoption of digital technologies and the opportunities it presents to unlock new economic outcomes for the continent. The Africa’s Pulse Report released this April by World Bank Group recommends that closing the digital divide relative to other developing and advanced countries is needed for Sub-Saharan Africa to take advantage of the opportunities that information and communications technologies are providing.
There is great need for Africa to catch up with the rest of the world, and eventually lead the digital revolution. Right now, just 27% of Africa’s population has access to the internet and this is reflected in the pace of digital adoption seen with businesses and government investments and policies towards digital technologies.
The report presents a strong case saying that the digital transformation of Africa would foster economic growth and reduce poverty. It has the potential to create more jobs, encourage entrepreneurship among the youth, increase farmers’ productivity, bring more women into the labor force, and create markets. Reaching the Digital Economy Moonshot Initiative targets would raise growth per capita by 1.5 percentage points per year and reduce the poverty headcount by 0.7 percentage point per year. The potential growth benefits and poverty reduction effects are larger in Sub-Saharan Africa, and especially among fragile countries. When complemented with appropriate human capital investments, these effects could more than double.
The report proposes issues to be addressed for Africa to fully harness the benefits of the digital revolution, including:
- Closing the digital divide: Africa’s digital revolution is not just a matter of connectivity and access. It is about implementing policies that support the adoption, diffusion, and use of digital technology—including measures that support high-quality and competitively priced internet rollouts. Education, skills, and labor market policies may help secure the availability of skills in the labor market to support the adoption and use of digital technologies. Education and training systems need to keep up with the rapid pace of innovation. Business-relevant education and training programs should enhance workers’ reallocation across tasks, as technological opportunities expand or change, and workers’ mobility across firms and industries.
- Creating a competitive digital economy: Narrowing the gaps in the digital economy also requires complementary policies and assets. Countries need regulations that foster connectivity and competition, digital skills that are technology-augmenting, labor and product market policies that facilitate labor reallocation as technological opportunities emerge, and policies and institutions that enforce cybersecurity. Competition can help reduce prices and expand usage. The digital economy needs to be inclusive and reduce the divide in gender, income, and rural areas. Regulations are essential to create an environment that fosters the innovative and bold use of technology.
African governments also need to put in place a robust legal and regulatory framework that fosters competition. Radical technological change and adoption are needed to eradicate extreme poverty by 2030. In this context, the region needs to continue making efforts toward fully embracing the Fourth Industrial Revolution.
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