Like in other parts of the world the idea of Digitalisation of Everything (DOE) is spreading like wildfire.
The global leadership that Africa is enjoying in mobile money was made possible by an enabling policy environment that fostered innovation.
The entry of blockchain-based cryptocurrencies in the micro, small and medium enterprises (MSMEs) is offering cheap loans and is fast-tracking poverty reduction in the continent.
Africa’s digital transformation has reached a tipping point, and nothing will stop it. Like in other parts of the world the idea of Digitalisation of Everything (DOE) is spreading like wildfire. But despite the great impact that DOE has had globally, policymakers and regulators in Africa seem to be hesitant to create an enabling policy environment and this might undermine the innovation.
The global leadership that Africa is enjoying in mobile money was made possible by an enabling policy environment that fostered innovation. The digitalisation of the financial sector has since transformed the continent. In less than 10 years the sector has moved from an exclusive playing field for the rich to an inclusive environment where the poor too enjoy the services offered.
The entry of blockchain-based cryptocurrencies in the micro, small and medium enterprises (MSMEs) is also offering cheap loans and is fast-tracking poverty reduction in the continent. The ongoing disruption of the MSMEs sector could not have happened if the Capital Markets Authority did not provide a legal sandbox to try the innovation.
Digitalisation has the potential to solve many challenges that are facing Africa. For example, the prevailing problems in the power industry in Africa could easily be solved by digitalisation.
Where such transformation has taken place, they refer to the new systems as smart grids. Internet of Things (IoT) has also made it possible to collect, process, and share data, from linked devices for such purposes as predictive maintenance or transparency in billing. Therefore, policymakers need to encourage the swapping of legacy systems with modern digital solutions to enhance trust and transparency in the sector.
The problem of food security in Africa is slowly getting solved by digitalisation too. The agricultural sector is currently undergoing tremendous change with the strengthening of the supply chain systems. The changes are boosting productivity, profitability, and resilience to climate change.
We are now seeing more investments building inclusive, digitally-enabled agricultural solutions that are needed at the bottom of the pyramid to achieve meaningful livelihood and enhance transformation for the continent’s smallholder farmers and pastoralists. But to realise the potential of transformation in the agricultural sector, different regulators, including in the financial sector, must collaborate seamlessly.
Covid-19 fast-tracked the digitalisation of the healthcare systems globally. We are now seeing how digital technologies are bringing patients and care teams closer together since distance is now not a factor. We are also witnessing a cultural transition to a digital mindset, combined with new technology, that is improving the establishment of a learning health system. However, Africa still needs to do more to fully take advantage of the digitalisation megatrends.
We need to build a digital wallet for every citizen and analyse citizen data to gain insight into clinical and non-clinical information in a bid to leverage analytical tools such as Artificial Intelligence technologies that can improve effective and timely decision making.
The critical cog in all these digitally-enabled services is the financial sector. It has enabled payments or borrowing to be done efficiently without the physical presence of the customer.
Although the current digital products have helped in expanding digitalisation, concerns of security and more complex transactions have given rise to cryptocurrencies. The adoption of cryptocurrencies, especially central bank digital currencies (CBDCs) in Africa is inevitable. It is just a matter of time before virtually every country moves into the digital space
Early this year CBDCs went mainstream in China, which tested its e-yuan digital currency in 11 pilot areas and cities. The US is also in a race to launch an e-dollar. In Africa, Nigeria has officially launched their e-naira, Africa’s first digital currency, while many African countries are burying their heads in sand hoping that nothing will happen.
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