advertisement
Columnists

Africa transformation lies in digital revolution

To summarize Africa’s rise narrative, one only needs to consider the continent’s Digital Revolution. The continent has leapfrogged some First World countries.

Decades ago, the fashionable term used to be ‘‘natural resources’.’ Indeed, there were many Op-Ed pieces on Africa’s wealth. However, it was just talk.

There was significantly less dialogue and action towards properly harnessing and converting these resources into positive and sustainable economic impact.

These days, the buzz word is ‘‘digital’’ (or ‘‘internet’’, ‘‘online’’ and other variations). It is the thrust of nearly all ‘Africa Rising’ narratives spun by economic experts, tech entrepreneurs, policy analysts and enthusiastic government personnel.

As a result of infrastructural investment - increased access to mobile broadband, spread of fibre optic connections, improving power supply - the continent’s online population as per the Internet World Statistics has grown by over 7,000 per cent from 4.5 million in 2000 to 340 million in 2015 and is still growing.

advertisement

The population of smartphone users is also swelling, according to McKinsey’s 2013 Report: Lions go digital: The Internet’s transformative potential in Africa, which estimates that there will be more than 360 million users by 2025.

In the past two years, smartphone connections doubled to 226 million the report says.

However, a 2016 Deloitte survey, Game of Phones: Deloitte’s Mobile Consumer Survey, adds that some countries, notably South Africa, Kenya and Zimbabwe, have surpassed the 50 percent smartphone penetration.

Smartphones are essential in Africa since majority of people use them as the primary mode of accessing Internet. Its penetration is a key indicator of the emerging digital economy.

The 2016 Global Systems for Mobile Association (GSMA), the mobile industry organization, reported a steady drop in the prices of smartphones from about $230 in 2012 to $160 in 2015, in Africa.

This too is expected to fuel even higher growth in the number of people getting online.

The greater the penetration of Internet, the greater the African innovation is enabled. This is what has given impetus to the rise of web-based ventures that seek to solve existing problems across key sectors.

As with natural resources, we once again have something transformative - technology - on our hands.

However, the narrative cannot continue to be around what we have - digital access. It has to be about what we can do with what we have.

The McKinsey report delved into the transformative power of the Web in Africa, emphasizing that the digital revolution will likely play out in the following sectors: financial services, education, health, retail, agriculture, and government.  

The requisite digital skills and competence to make sure these figures have more meaning than just being numbers in a document - are crucial.
These numbers mean value chains established, jobs created, businesses set up.

Thankfully, a number of private citizens are seizing the initiative. One that immediately stands out to me is a corporate one - Google.

Through its Digital Skills programme, it is giving means to Africans to create economic growth in the sectors previously highlighted above.

The Internet giant has pledged to train 1 million in a year and has reached the halfway mark, with 500,000 Africans already trained in digital skills.

Most of these Africans are young and “hungry” enough to create change for themselves and their communities. Many are of these people are looking to build web tools and apps for businesses.

Out of these half a million trained Africans, small and medium businesses will undoubtedly sprout.

Small businesses play a very important role in developing economies. As I said in my column last week, the sector employs 15 million and contributes 33 per cent to GDP in Kenya.

Approximately 96 per cent of Nigerian businesses are SMEs. The SME sector in South Africa contributes 70 per cent of national employment.

In Kenya, SMEs provide approximately 80 per cent of employment and contribute over 92 per cent of the new jobs created annually.

Digital-only banks are more reality than wishful thinking. E-commerce is booming with new players throughout Africa.

As noted by the McKinsey report, If governments and the private sector continue to build the right foundations, the Internet could transform sectors as diverse as agriculture, retail, and health care, and contribute as much as $300 billion a year to Africa’s GDP and an additional $300 billion in productivity gains by 2025.

There are simpler stories. I learnt of Edna Karijo who signed up for the Digital Marketing training in March. Two months after the training, she decided to leave her full time job and start her new career as a Digital Marketing consultant.

She used her new skills to help African development organisations to use the power of Digital marketing to meet their goals. Today she also trains other young and interested Africans.

Our continental economy needs more stories like hers. More organisations should offer digital skills training as a matter of responsibility.

With the increased population of skill development programmes like this, more Africans will be able to recognize and leverage the Web to improve economic growth and shape the continent’s transformation for a brighter future.

The writer is an associate professor at University of Nairobi’s School of Business.

advertisement