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Tuesday, February 23, 2016

Continental shift: Delivering a digital Africa




"Across Africa, the Internet is creating social and economic value, supporting entrepreneurialism and driving innovation, says David Dean. To close the remaining digital divide, he explains what actions policymakers should take to maximise the public impact."

Africa is going digital. Be it mobile money transactions, Uber-style delivery services, or e-commerce platforms, countless African examples can be found where consumers and businesses are benefiting from the digital economy. In five of the continent’s largest countries – Nigeria, Egypt, Kenya, South Africa and Morocco – Internet penetration is now close to the global average. With examples like these, it’s not hard to imagine Africa’s future being digital.

But the future is not evenly distributed. More than 800 million Africans do not have Internet access. Many live in rural areas, without access to infrastructure, or they simply cannot afford access it where available. The young and the urban are twice likely to have Internet access than the old and the rural. The richest 60 per cent are three times more likely to be connected than the bottom 40 per cent; women are only half are likely to have Internet access than men and others simply do not see the benefits of using the Internet. Lack of basic literacy or digital literacy is a big drag on usage.

Benefits of connectivity:

Reducing poverty, hunger and inequalities, or improving health and education as well as achieving many of the United Nation (UN’s) Sustainable Development Goals; depend on having an accessible, affordable Internet and citizens with the skills to use it. The economic rationale for the necessary investments is clear too: In work commissioned by ICANN, The Boston Consulting Group estimated that countries can – conservatively – increase GDP by 2-3 per cent by reducing the barriers holding back their Internet economy.

So what needs to be done?:

Four areas need concerted attention: more widespread Internet infrastructure, more affordable services, relevant local digital content, and higher digital literacy skills. Successful countries have taken a comprehensive, multi-stakeholder approach to addressing these challenges.

Infrastructure access is a prerequisite. Governments can leverage the successful practices of other countries starting by defining a long-term digital strategy, including a national broadband plan and establish a transparent, independent, regulatory framework. Policymakers also need to promote competition as this tends to encourage investment, drive innovation and reduce prices while incentivising collaboration between network providers through support for network sharing.

Underpinning such priorities should be a drive for cross-border collaboration in areas such as regulatory policy, spectrum allocation and trade. For example, In East Africa the removal of mobile roaming charges resulted in a 950 per cent increase in traffic between Rwanda and Kenya within weeks.

Affordability is a significant challenge. According to A4AI not a single emerging or developing country can claim to meet the UN’s broadband affordability benchmark. But several initiatives can bring costs down. Reducing taxes on devices and access can lead to significant progress. Côte d’Ivoire is leading the way with its government's decision in 2015 to slash taxes on mobile phones from 27 per cent to less than 7 per cent, is one positive example. And while spectrum auctions should be seen as opportunities to attract infrastructure investment, rather than major revenue-generating opportunities, governments should also promote the deployment of DNS root server instances and Internet eXchange Points (IXPs) to enhance local connectivity and resiliency, and reduce costs. Of roughly 500 IXPs worldwide, only about 30 are in Africa.

Local digital content also needs encouragment. Making the Internet a relevant resource requires local-language content, applications and services. Proven steps include removing the hurdles facing small businesses in areas such as trade, tax and the recruitment of skilled employees. Policymakers can also seek to digitise government services to increase citizen involvement, improve the quality of services and raise efficiency. Nigeria’s electronic identification (ID) system revealed 62,000 ghost workers in the public sector, while Nairobi’s water utility was able to significantly cut the time to fix outages based on customer feedback.

Alternatively, they can also encourage technology hubs to provide the infrastructure and entrepreneurial environment for new business creation.  Similarly, promoting local hosting of websites and registration under local country domains to improve website performance offers significant potential.

But they also need to remember that skills need building. Basic literacy often holds back Internet adoption and use. In Sub-Saharan Africa over 40 per cent of adults, half of women, and more than 30 per cent of young people are illiterate. Actions that can make a difference include a drive for full school enrolment, especially for girls; create digital literacy programmes for those no longer in the formal education system; and promote shared facilities to help expose communities to the benefits of Internet access, particularly in remote areas.

Conclusion:
Each country needs to identify which problems affect it most severely and develop relevant solutions. A multi-stakeholder approach involving governments, the private sector, civil society and non-governmental organisations (NGOs) can be very effective in building consensus on the most effective policies and actions to adopt.

Significant and lasting investments are needed to deliver the Internet for all Africans. Some may baulk at the magnitudes involved, but government leaders should ask themselves what the costs of inaction are. These are high too – fewer jobs and slower economic development, a bigger digital divide, poorer education, worse healthcare and lower life expectancy. 

For farsighted leaders, the answer will be clear.

*David is a senior advisor in the Munich office of The Boston Consulting Group and a former senior partner and managing director. He has published widely and spoken often on the impact of the Internet on business, government, and society.
 

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