In order to open up new opportunities and encourage inclusive, sustainable growth, Airtel Africa, a top provider of mobile money services and telecoms with a presence in 14 African nations, has reaffirmed its commitment to continue leading the digitalization of the continent.
The Group CEO of Airtel Africa, Dr Segun Ogunsanya, discussed the company’s plans to increase investments that are geared towards supporting the country’s target of achieving at least 20% access to the internet by 2030 in the quest of the Government of Malawi to become an independent, industrialised middle-income economy. He made these comments when he met with His Excellency Dr. Lazarus McCarthy Chakwera, the President of the Republic of Malawi.
Dr. Ogunsanya said, “Our purpose is to transform lives across the continent. We look forward to working with governments and other actors to bridge the digital and financial gap. Digitalisation has huge potential to create economic opportunities in the continent.”
President Chakawera also said, “We have agreed to continue growing our government-to-business partnership with Airtel Africa so that we create meaningful socioeconomic value for all Malawians through pro-growth modern digital services. In the quest to become a self-reliant and industrialized middle income economy, Malawi will count on digital technologies that create new value of our economic system, thereby facilitating the creation of sustainable wealth and jobs.”
Charles Kamoto, the managing director of Airtel Malawi, accompanied Dr. Ogunsanya on the trip. A subsidiary of Airtel Africa, Airtel Malawi, is traded on the Malawi Stock Exchange.
Read also: Analysis of Airtel Africa’s shares within current economy
What the agenda of African digitalisation entails
In order to expedite economic growth and the creation of new jobs, Africa needs a digital transformation. According to projections provided by the World Bank, achieving the goal of the African Union to provide universal and inexpensive internet connectivity will add two percentage points per year to the continent’s overall GDP growth.
Additionally, the availability of high-speed internet raises the probability of employment for individuals with any level of education by 6.9 to 13.2 percent, due to the fact that technology makes it easier for businesses to enter the market and enhances both production and exports.
As a result of this, the use of digital technologies presents African nations with a once-in-a-lifetime opportunity to dramatically revamp many different aspects of their economies. However, in order for this promise to be realised, Africa will need to solve the significant gaps in its digital infrastructure that currently exist.
The digital position of Africa
Africa is trailing behind on the digital front in a significant way. For instance, the percentage of people who have access to the internet, as well as its quality and cost, is quite low in comparison to the rest of the world: There is a significant amount of difference between nations, with internet penetration in Africa ranging from 5.3 percent in Burundi to 89.8 percent in Kenya in 2019. On average, internet penetration was 39.6 percent in Africa in 2019, while it was 62.7 percent in the rest of the globe.
In 2017, Africa only utilised one percent of the total international bandwidth that was available to the rest of the globe. The median download speed for mobile broadband in Africa is 2.7 megabits per second (Mbits/s), which is nearly half of the global median of 5.2 Mbits/s. Additionally, the monthly cost of a fixed broadband connection in Africa is 36.6 percent of gross national income, which is significantly higher than the global average of 14.5 percent.
While wealthy economies spend an average of 3.2 percent of their GDP on digital investment, African countries spend approximately 1.1 percent of GDP on digital investment. Consequently, carrying on in the same manner as before is not a viable choice because doing so will result in an even greater digital divide and further contribute to Africa’s marginalisation.
Africa’s digital growth
To look on the bright side, the region has demonstrated that it is prepared to fully adopt digitization: It is home to a young and active population, which has contributed to it having the highest rate of growth in internet use and connection of any country on the planet during the past two decades.
The number of people who use the internet in Africa has expanded by more than 116 times in the same time period, going from 4.5 million to 523 million, whereas the number of people who use the internet in the rest of the globe has not even doubled. Young people in particular are seizing the opportunities presented by new technology in order to develop enterprises and discover answers to the issues that plague the continent.
There has been a proliferation of fruitful technology developments recently, with examples ranging from mobile banking services in Kenya to the delivery of life-saving medications by drones in Rwanda. These achievements need to be taken to the continental level so they may be fully realised.
It should come as no surprise that young people in Africa are pushing for improved digital services as part of their efforts to fully integrate into the economy of the 21st century. In response, the African Union, with the help of the World Bank, is pursuing an initiative for digital transformation. The goal of this programme is to increase the rate at which people use the internet so that Africa may catch up to and even surpass the rest of the world in a period of less than ten years.
This programme, which is called the Digital Moonshot, consists of five essential components. Investing in digital infrastructure to increase access and quality is the first step. This includes investments in connectivity (such as high-speed internet and internet exchange points), the Internet of Things (such as mobile devices and computers), and data repositories (such as data centres and clouds).
These renovations will require some public spending, but the majority of the investment will need to come from the private sector. Because of this, there is a necessity for legal and regulatory reforms to attract private investment.
The second component is making investments in a workforce that is proficient in digital technology in order to construct powerful digital economies and competitive markets. The third strategy is to make investments in digital platforms that provide goods and services via digital distribution channels.
The financial sectors
The majority of platforms are created by the commercial sector; however, some platforms, such as digital ID systems, are produced by the public sector. The creation of digital financial services to expand access to financial services is the fourth strategy for expanding financial inclusion. M-Pesa in Kenya is the most successful example of such a system.
The development of digital financial systems necessitates the revision of existing monetary and financial rules as well as systems of financial supervision in order to open the door for mobile phone companies to participate in the provision of financial services. The creation of an environment that fosters digital entrepreneurship and innovation constitutes the sixth component of this strategy. Africa, with its vast population of young people who are inventive and creative, has the potential to become the “startup continent.”
The objective of completely digitally transforming Africa is within reach. Over a period of ten years, it is anticipated that this project will incur a total cost of between $80 and $100 billion, with investments originating from the private sector accounting for more than half of the total.
The issue is not just about gathering public resources; rather, the most significant obstacle is to put in place laws and institutions that stimulate private sector investment. The challenge is to mobilise public resources. Second, efforts to address Africa’s other needs, including investments in human capital, energy, and transportation, should not be sidetracked in order to meet the requirements of the digital economy.