How Africa is being digitally transformed – Tony Elumelu

by Tony Elumelu 0

Across Africa today, from the largest cities to the most remote villages, digital technology is making an impact on people’s everyday lives, and has the power to transform communities and even whole economies. Although Africa is still lagging behind on a range of key infrastructure needs such as access to clean water, paved roads, and electricity, the continent’s up-take of mobile telephony was the fastest of any region in the world and is emblematic of how thirsty Africans are for new technologies.  Moreover, despite the prevalence of structural deficits that inhibit the adoption of such technologies, primarily access to power, users have developed innovative ways to adapt them to the local context.

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In 2000, all of Sub-Saharan Africa had fewer telephone lines than in New York City alone, and among the roughly 400,000 “rural settlements” estimated to exist in Africa, less than 3 per cent had access to a fixed telephone line.  And according to research conducted by the Pew Research Center in 2002 which surveyed about 1,000 people in each of six sample countries, only about 10 percent of adults had cell phones in Tanzania, Uganda, Kenya and Ghana, while 33 per cent in South Africa owned cell phones.  However, Pew’s follow-up survey found that by 2014, 89 percent of adults now own a smartphone or basic cell phone in South Africa and Nigeria, 83 per cent in Senegal and Ghana, 82 percent in Kenya, 73 percent in Tanzania and 65 per cent in Uganda.

The start of the new millennium marked the dawn of the information age, beginning with the advent of digital information communication technology through the internet, email, and mobile phones. But communication is only the first – and relatively small – step in what will prove to be a complete transformation in the way we educate our children, care for the sick, interact with our elected officials, conduct financial transactions, develop and maintain social networks, and market products.  Just as Africa created unique ways to rapidly adopt mobile telephones and “leapfrog” the need to build outdated fixed line telephony, the incorporation of digital technology into many other facets of our lives will help Africa accelerate the pace of our development across multiple sectors needing to modernise.

One of the important lessons of Africa’s mobile phone miracle often overlooked is the way in which this advanced communication tool become so ubiquitous so quickly.  It began with the privatisation of government-owned and operated telephone companies, and the end of monopolistic practices in favor of an open and competitive market.  Once the private sector was allowed to build the connectivity infrastructure, sell phones, and market products, the industry exploded and the up-take by consumers outpaced companies’ ability to keep up with demand.  The natural advantages of business – the flow of private investment, a commitment to meeting the needs of the consumer, the culture of innovation, and the need to compete to survive – proved critical to the unprecedented success of this new technology.

The next wave of digital transformation will require an equal level of private sector leadership as well as a strong partnership with government in order to create an enabling environment to allow the forces of a competitive market to facilitate innovation.  And in the last ten years, no African country has done more to prepare itself for digital transformation than Rwanda. 

Rwanda is a leader in the effort to utilise digital technology as an enabler and accelerator, eventually evolving to become the ultimate multiplier across all sectors.  “The internet is a needed public utility as much as water and electricity,” declared Rwandan President Paul Kagame, who is often referred to as the “digital president” because of his early and consistent role in driving the country’s adoption of new technologies.  As far back as the year 2000 the government adopted the National Information Communications Infrastructure policy and a long-term plan to achieve full digitization and transition from a primarily agrarian to a knowledge-driven economy. 

The first stage of this effort was to establish the legal and regulatory frameworks, the second was to build the physical infrastructure, and the third was use technology to improve service delivery across all sectors.  By the end of the second stage of development in 2010, Rwanda’s ten-year internet user growth rate was 8,900 per cent, compared to Africa’s growth rate of 2,450 per cent, and the world’s average rate of 444 per cent.  As a direct result of this growth, Rwanda is now in the fourth and final stage of its digital transformation:  creation of a technologically-sophisticated workforce, incorporation of the latest digital resources by the private sector, ubiquitous access to advanced tools and training at the community-level, and the enhancement of government-provided services.

Another insight into how digital transformation can unlock opportunities for Africans across the continent is through its enabling of entrepreneurship.  Too often the role and the impact new technologies play is centered around the adoption by large institutions.  Although this is important, it is through the democratization of access to these advanced tools as well as the knowledge to use them effectively that ultimately leads to change that is inclusive.  For example, mobile phone operation Safaricom of Kenya’s celebrated m-Pesa platform, which seamlessly transfers funds between users, is successful because of its widespread adoption by people and entities across the socio-economic spectrum.  What began as a platform to efficiently send money earned by workers who had migrated from rural areas to cities in search of employment has become an important tool for small businesses to complete transactions cheaply, track revenues and inventory, and even access credit.

Beyond the application of specific tools such as m-Pesa are the ways in which access to information and the ability to communicate in real-time with nearly anyone who has a mobile phone or internet connection, are the services and programmes that would not otherwise exist without digital technology.  For instance, the Tony Elumelu Entrepreneurship Programme (TEEP) – a 10-year, $100 million effort to identify, train, fund, and support 10,000 African entrepreneurs across the continent – would not have been possible without the digital communication tools we have today.  And many of the 2,000 entrepreneurs who have been selected thus far have incorporated these and other technologies into their business plans, exemplifying the importance access to digital resources and capabilities are to creating jobs, increasing personal income, and spreading prosperity throughout the continent.

*Tony Elumelu is the Founder of the Tony Elumelu Foundation. He is a co-chair at the World Economic Forum on Africa 2016