The ability of African countries to accelerate economic growth and unleash quality jobs for the youth will be dependent on greater adoption of digital technologies, the World Bank said in a report launched Monday.
Under the title of “Digital Africa: Technological Transformation for Jobs,” the World Bank report stresses that sustained efforts to bridge the digital divide in Africa are imperative in order to leapfrog the continent to a new phase of growth and renewal.
World Bank’s Chief Economist for Africa Andrew Dabalen said rapid digitization will enable Africa to harness the full potential of its youth bulge and attain quality and inclusive economic growth.
Projected to have the largest share of the global workforce by 2100, Africa must boost the uptake of digital technologies in order to create opportunities for more than 22 million people in the continent to join the workforce annually, said the report.
Internet usage varies across the continent with South Sudan recording a low of six percent and South Africa hitting 53 percent, necessitating the need for rapid investments, policy reforms, and training as a means to bridge the digital divide across the continent, the report noted.
The World Bank said digital technologies and innovations will be key to modernizing key sectors like manufacturing, agriculture, and financial services in Africa, calling for concerted efforts to bridge the digital divide weighing heavily on the rural poor as well as start-ups led by women and youth.
Digital Africa, Technological Transformation for Jobs examines pathways to produce and promote the expanded use of affordable and attractive digital technologies (DTs) that are appropriate for Sub-Saharan Africa’s growing workforce and facilitate continued learning through use. DTs are defined broadly to include digital and data infrastructure, broadband internet, smartphones, tablets, and computers. They also include more specialized productivity-enhancing solutions, such as management upgrading, worker training, procurement, marketing, logistics, financing, and insurance.
Main findings
• Two empirical studies undertaken for this report add to the rapidly growing evidence base that technology provides a pathway to inclusive productivity growth. These studies analyze geospatial information on the rollout of mobile internet towers over time, combined with household data surveys over a six- to seven-year period. The studies show that internet availability clearly has a positive impact on jobs and welfare.
• Other empirical studies highlight indirect impacts of internet availability on jobs through entrepreneurship, innovation, and foreign direct investment. Internet availability also expands the demand side of production and boosts aggregate growth.
• Despite this good news that internet availability has strong causal impacts on jobs, the report also underscores the relative lack of DT use in Africa. Too few people benefit, as Africa’s internet infrastructure coverage and quality still lags other regions. While 84% of people on average across countries in Sub-Saharan Africa live in areas where 3G service is available, and 54% have some 4G mobile internet service, only 22% were using mobile internet services as of the end of 2021. Usage rates range from a low of 6% in South Sudan to 53% in South Africa, underscoring the heterogeneity of average use and the need for differentiated policy reforms across countries.
• The key DT related issue for African enterprises is still low productive use. The main factors affecting enterprise use of smart phones and computers, and of more sophisticated DTs, are the lack of ability to pay for them and willingness to use them. For example, 1.5 GB of data over 30 days, a package that covers about a few hours of daily use, amounts to about one third of the income for the 40% of Africans who fall below the extreme poverty line.
• In this regard, women tend to be at a disadvantage: Only 2% of micro-sized firms owned by young women and 8% of micro-firms owned by young men use a computer.
• To change this, the report recommends better access to credit, targeted regulations, and market-induced price reductions to help address affordability. Additionally, internet use should be viewed as a means of increasing household earnings and reducing poverty, so the policy goal is to increase the productive use of the internet to increase household earnings, and thus, the ability to pay.
• Sophisticated, creative, and simple-to-use apps with touch screen and voice, and videos in the many languages Africans speak, can also drive greater adoption of these technologies. Development of these kinds of apps and new DTs requires public-private investment and programs with business advisory services and worker training programs.
• DTs are necessary but insufficient on their own. Electricity, road access, education, and skills as well as attainable financing are all part of the solution.
• Finally, national strategies and related policies to ensure affordability, infrastructure availability, and data infrastructure should be implemented. Investments can include common access facilities for all and hubs for entrepreneurial training and support.
• Bold policy actions that create a conducive DT environment will lead to positive impacts visible to governments, enterprises, and households.
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