Fintech
Africa’s Digital Economy poised to explode as regional integration opens new markets
With Africa’s digital economy taking off exponentially, the continent must ready itself to maximize the potential dividends of the Continental Free Trade Area agreement, panel members told a packed auditorium in Kigali at the opening of Transform Africa Summit 2019 on Tuesday.
Key to this effort will be connectivity, data and digitization and innovation among others, conference attendees heard.
“Africa can achieve a digital single market…It is a journey and we need to break it up into doable bits, “African Development Bank Vice-president, Private Sector, Infrastructure and Industrialization Pierre Guislain, said, adding that the European Union had demonstrated that it could be achieved.
Other members of the panel Lacina Kone, Director General / CEO of Smart Africa, the conference organizers, Fatoumata Ba, CEO Janngo, Nic Rudnick, CEO Liquid Telecom Group and Elsie Kanza, Head of Africa, World Economic Forum, shared similar sentiments.
This year’s summit which is themed Boosting Africa’s Digital Economy, aims to showcase success stories in the African digital economy and promote homegrown businesses, innovations, solutions and partnerships.
In a special intervention from the audience, World Bank Digital Director Dr. Boutheina Guermazi said:
“ICT and digital literacy is not a luxury. It is an integral part of how we view development,” adding that the foundations of the digital economy – connectivity, data and voice, would depend on a fully integrated digital infrastructure.
With the ratification of the Africa Continental Free Trade Area, the possibility of new markets offer tantalizing new avenues for tech start-ups and e-businesses and a combined GDP of over $600 billion.
The internet has opened doors to access information and technology, a key component of accelerating the pace of the digital economy and connecting markets. Interconnection and interoperability create bigger markets which in turn attract investors.
The mobile phone industry is an example of the dynamism of the sector in Africa. Mobile phone subscriptions have grown in Africa from 87 million in 2005 to 760 million in 2017, growing 20% per annum. This is the fastest growing market in the world as well as the one with the most potential. Mobile network coverage ranges from 10 to 99% in Africa– an average of 70%.
Africa’s pioneering efforts in the FInTech space are illustrated by the fact that around half the world’s mobile money providers operate in sub-Saharan Africa, where as many as 80% of adults have a mobile phone. By 2020, the value of Africa’s mobile money industry is projected to top $14bn.
Single window schemes and One Stop Border Posts will accelerate intra-African trade, Guislain said, but openness and competition need to be promoted and defended. Indeed, some vested interests may fear this openness and do whatever they can to keep it from happening. We need to measure the speed of movement along Africa’s major trade corridors and ensure any remaining bottleneck gets removed, he added.
Africa also needs more private sector African champions – companies that have done well nationally and are ready to expand regionally and beyond.
“Business needs to be more of a driver. Domestic African private sector needs to go outside its borders to develop value chains…Africa has shown it can deliver,” Guislain said.
The 2019 Summit aims to provide practical ways to advance the commitments of African governments and partners to transform Africa into a fully digitized economy where technology is harnessed to fully reap the benefits of Pan-African integration efforts.
The Summit was formally opened by Rwandan Prime minister Dr. Ngirente Edouard, who talked about Rwanda’sambitious plan to prioritize digital literacy for all youth by 2024. “We expect to achieve at least 60% by 2024,” he said.
Bank President Akinwumi Adesina will attend the official opening of the summit on Wednesday by Rwandan President Paul Kagame.
An estimated 4,000 visitors from over 90 countries are expected for the three-day meeting which has become the continent’s premier digital technology summit. The next two days will see the launch of a Smart Africa Digital Economy Mapping Report, and a Smart Africa Women’s summit as well as several interactive plenaries.
SOURCE African Development Bank (AfDB)