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In rebuilding after COVID-19, policymakers must invest in innovative technology to leapfrog obstacles to inclusive development
Africa has enjoyed strong economic growth for most of the 21st century, mainly because of
robust global demand for primary commodities. But the “Africa Rising”
narrative that accompanied this growth is mostly a story of rising GDP,
which is overly one-dimensional. In fact, Africa’s economic growth has
failed to generate many good jobs—postponing, once again, the benefits of
the demographic dividend of a large working-age population. Because there
are fewer old and young people that require support than people of working
age, the dividend is supposed to free up resources that can be devoted to
inclusive development.
Cristina Duarte
Instead, African policymaking continued its now nearly half-century belief
that achieving “development” is limited to managing poverty—in other words,
equating the business of development to poverty reduction. The shift from
the industrialization agenda of the early post-independence period to one
of poverty reduction is a major reason for the continent’s economic
malaise. As the African Innovation Summit (2018) put it, the development
agenda shifted from socioeconomic transformation to the lowest common
denominator, managing poverty.
To generate economic growth that leads to sustainable development, Africa
must shift its focus to retaining and creating wealth, better managing its
resources, fostering inclusiveness, moving up on global value chains,
diversifying its economies, optimizing the energy mix, and placing human
capital at the center of policymaking. For this to happen, African policy
must foster investment in research, development, and innovation
(R&D&I) to reboot the continent’s economic structures and catch up
technologically with the rest of the world. Innovation, and the digital
information technology that accompanies it, has become a necessary
component of any effort to address such challenges as food security,
education, health, energy, and competitiveness. The world is driven by
innovation: unless African policymakers reap the potential benefits of
R&D&I, the global divide will keep growing. The problem is that
innovation is talked about and debated, but not strategized.
An opportunity to go digital
It is here, paradoxically, that the COVID-19 pandemic, despite all the
economic and social devastation it has caused, provides an opportunity for
African countries to innovate and go digital. African countries will have
to rebuild their economies. They should not merely repair them; they should
remake them, with digitalization leading the way.
So far, civil societies seem to be more ready than policymakers to embrace
digital technology. With no help from government, the digital technology
industry has grown in Africa—through incubators and start-ups, tech hubs
and data centers. Information and communication technology (ICT) activities
are spreading across the continent, and young Africans are responding with
digital technology to the challenges posed by COVID-19. For example, at an
ICT hub in Kenya, FabLab created Msafari, a people-tracking application
that can trace the spread of infections. A similar application, Wiqaytna6,
was developed in Morocco. In Rwanda, the government is demonstrating what
enlightened policies can achieve. The country has invested heavily in
digital infrastructure—90 percent of the country has access to broadband internet, and 75 percent
of the population has cell phones. Early in the pandemic Rwanda parlayed
that technological prowess into developing real-time digital mapping to
track the spread of COVID-19, expanded telemedicine to reduce visits to
clinics, and created chatbots to update people on the disease.
These are promising endeavors, but digitalization is not widespread in
Africa. Rwanda is the exception. Only 28 percent of Africans use the
internet, a digital divide that prevents the continent from taking full
advantage of digital technology’s ability to mitigate some of the worst
effects of the pandemic.
That slow spread of internet technology also makes it difficult for the
continent to leapfrog obstacles to sustainable development. To generate
transformative growth, digitalization cannot be left mainly to civil
society and the private sector. The socioeconomic divide in Africa feeds
the digital divide, and vice versa. Digitalization needs to be scaled up
forcefully by policymakers to unlock structural transformation.
Digital divide
When assessing the digital divide, it is important to remember that the
issue is about more than access to the internet. How internet usage
benefits the user is also a factor. The goal of digitalization should not
just be greater consumption; it should enhance civil societies’ resilience,
which demands a clear regulatory framework and an educated population.
In Africa, it’s not just internet connectivity that’s missing. So are other
basics—including electricity, literacy, financial inclusion, and
regulations. The result is that people are unable to use the digital
solutions that are available. Furthermore, a good share of African
populations still struggle with such life-threatening problems as conflict
and food insecurity, which make daily survival their only goal. Millions of
Africans are not only on the wrong side of the digital divide, they are on
the wrong side of many divides—lacking basic health and public necessities
such as electricity, clean water, education, and health care. COVID-19 has
exacerbated their plight because lockdowns and social distancing have made
many public services accessible only online. The terrible truth is that
these hundreds of millions of people have been left behind, and unless
African policymakers realize that access to digital technologies is a
critical tool for socioeconomic inclusion, progress will be confined to
those with electricity and telecom services—further isolating the vast
majority without such access. The divide will widen.
The deep disruptions generated by the pandemic have opened up opportunities
to remake society that are subtle. These are times that test policymakers’
vision and leadership. As McKinsey & Company (2020) noted, the
“COVID-19 crisis contains the seeds of a large-scale reimagination of
Africa’s economic structure, service delivery systems and social contract.
The crisis is accelerating trends such as digitalization, market
consolidation and regional cooperation, and is creating important new
opportunities—for example, the promotion of local industry, the
formalization of small businesses and the upgrading of urban
infrastructure.”
As Africa rebuilds from COVID-19 disruptions it must not return
to a pre-pandemic reality.
The moment is now. As Africa rebuilds from COVID-19 disruptions it must not
return to a pre-pandemic reality; it must build a better reality that
recognizes the need for innovation, particularly digital technologies. This
is the prerequisite for victory over its myriad development challenges—such
as poverty, health, productivity, competitiveness, economic
diversification, food security, climate change, and governance.
Receptive to change
Over the past five years, change has occurred in Africa, suggesting that
the continent may be receptive to building better rather than merely
rebuilding. Liu (2019) identified three major African initiatives that
signal such receptivity to change:
The African Continental Free Trade Area (AfCFTA), which aims to create a
single market with a combined GDP that exceeds $3.4 trillion and includes
more than 1 billion people;
The South African government’s new Centre for the Fourth Industrial
Revolution of the World Economic Forum (WEF), for dialog and cooperation on
the challenges and opportunities presented by advanced technologies;
The WEF’s Africa Growth Platform, which aims to help companies grow and
compete internationally, leveraging Africa’s entrepreneurial activity—13
percent higher in its initial stage than the global average.
These ongoing initiatives could become game changers, breathing life into
the top-down dimension of going digital.
So far, the change has been almost only from the bottom up. More than 600
technology hubs—places designed to help start-up companies—have emerged
across the continent. Three have achieved international recognition: Lagos
in Nigeria, Nairobi in Kenya, and Cape Town in South Africa. These tech
hubs host thousands of start-ups, incubators, technology parks, and
innovation centers driven by the private sector and young people who,
despite adversity, are aware of how self-employment is linked to
innovation.
Public policy lacking
Things are less promising from the top down. According to a 2018 WEF
report, 22 of 25 countries analyzed had no public policies focused on an
ecosystem for innovation.
Investing in broad-based digitalization, from a geographic and sectoral
point of view, is crucial not only to address socioeconomic problems but
also to deal with peace and security challenges. And it boosts economic
growth. A study by the International Telecommunication Union found that 10
percent greater mobile broadband penetration would generate a 2.5 percent
rise in Africa’s GDP per capita.
But digital solutions cannot be achieved in a vacuum. Policymakers must
make implementation of digital technologies an element of an ecosystem of
innovation, and there’s no time to lose. Well-calibrated regulatory
frameworks, investment in infrastructure, digital skills, and financial
inclusion must take priority.
Most research shows that digital technologies are essential to addressing
socioeconomic challenges. They are often described as the single ingredient
Africa needs to leapfrog to sustainable and inclusive economic development.
From an economic standpoint, better information and communication
technology democratizes information crucial to production and market
agents, which makes for more efficient value chains and more affordable
products and services. And the most vulnerable people will benefit.
However, the massive adoption of digital technologies also means that
policymakers must be aware of and address the complex legal and ethical
impact of technology in society, including privacy, data, and tax evasion.
This is especially true in Africa, where weak institutions might not be
strong enough to uphold the rights and interests of their people against
those of the market.
CRISTINA DUARTE
is special adviser on Africa to United Nations Secretary-General António
Guterres and the former finance minister of Cabo Verde.
Opinions expressed in articles and other materials are those of the authors; they do not necessarily represent the views of the IMF and its Executive Board, or IMF policy.
Source link : https://www.imf.org/external/pubs/ft/fandd/2021/03/africas-digital-future-after-covid19-duarte-old.htm
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Publish date : 2023-08-28 12:16:20
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