ICT

Data Costs Must Be Reduced in Order for Africa’s Digital Transformation to Prosper, Economic Experts Say

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The high cost of data evident in several African countries must be reduced across the board in order for digital transformation to take root. This is according to new data backed by economic experts and evidence based on the success of other nations known for their affordable data offerings.

The issue emerged when former Nigerian Minister for Communications Technology, Dr. Omobola Johnson, delivered a speech known as the UN Economic Commission for Africa’s (ECA) annual Adebayo Adedeji lecture at the ongoing Conference of Ministers in Marrakech.

Held in memory of the Nigerian scholar Adebayo Adedeji – arguably one of Africa’s leading proponent of regional integration – the lecture focused around the question of digital transformation in Africa: Hype or Reality? Adedeji was the ECA’s 3rd and longest serving Executive Secretary (1975- 1991). He is renowned and admired for his relentless calls for Africa to move away from conventional ideas of international trade and economic development.

Economic experts agree that, in the currently environment, the success of Africa’s continental trading bloc, will hugely depend on digital technology, tools and skills. Dr. Johnson cited a number of success stories across the continent and how they have used technology to provide services to the underserved, but said that many challenges remained.

“Affordability is an issue. The internationally agreed target is for 1 GB of data to cost no more than two percent of the average national monthly income. In Africa this currently stands at 8.76%, compared to 3.5% in Latin America or 1.54% in Asia. And the latest affordability reports show that this has increased over the past year,” she said when she delivered the lecture to ministers and a host of experts attending the Economic Commission for Africa (ECA) Conference of Ministers.

She noted disturbing tax trends, both on digital infrastructure and utilization taxes, which although seductive, can often have unintended consequences, such as increasing the cost of digitization and curbing its transformative impact.

She called for an urgent need to strengthen the infrastructure and fibre networks. She also decried how most of Africa’s connections are via undersea cables connecting through Europe or elsewhere.

“It is the private sector that can solve this issue, but they also need to be supported and incentivized,” Dr Johnson explained.

Invited to respond to the lecture, Tawanda Sibanda, partner at global consultancy McKinsey, looked back at the predictions they made in their Lions Go Digital report to assess progress. In the 5 years since the report was released the results have been mixed, he said.

They had estimated that by 2025 digital transformation could raise GDP by 8% by 2025 and make $300 billion of economic impact across health, education, retail, agriculture and financial services.

Dr. Johnson added that many companies across different sectors using tech to transform their sectors from energy, to agriculture to healthcare. “But it’s work in progress,” She further urged governments to be more supportive and develop a long-term digital strategy. “We also need to be more innovative in our financing mechanisms to allow VC to borrow at low rates and help scale up innovators.”

The urgent need to develop a pool of skilled talent that can turn the continent into the world’s digital talent pool in the same way that China became the world’s factory, through a large labour force and targeted government policy, Dr. Johnson concluded.

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