Recent success and growth across a wide range of subsectors have been enjoyed throughout Africa, despite it being a difficult time for economies worldwide. Now, the continent is planning to utilise this growth, and its uniquely placed landscape to encourage further innovation and successfully implement a single digital market.
Historically, countries across Africa have faced significant challenges, slowing growth and creating a difficult environment to foster innovation within. Finally, it appears the continent has the facilities to address these challenges head-on and, at GITEX Africa 2023 in Morocco, one specific solution emerged as the frontrunner: building a cross-border single digital market for the whole of Africa.
Successfully implementing a single digital market across Africa could enhance trade across borders, make high-speed internet access more widespread and cheapen online content and services. As a result, this would also encourage substantial economic growth spread across the continent and enable greater levels of innovation.
In fact, one key objective of the African Union is to “build a secured digital single market in Africa by 2030”. This very goal appeared to have unified many country representatives and companies during GITEX Africa’s conference at the end of May.
“The issue of digitalisation is no longer an option. It is an obligation”
Dr Désiré-Cashmir Kolongele Eberande, Minister of Digital Transformation for the Democratic Republic of Congo, expressed his country’s sentiments regarding this aim: “The issue of digitalisation is no longer an option. It is an obligation. We can no longer afford to be lagging behind the rest of the world’s digitalisation”.
Aziz Akhannouch, Morocco’s Head of Government, explained that while “Africa is the land of opportunity”, there is also a need to “develop and encourage investments in startups and SMEs” and further “encourage innovation in sectors like AI and internet of things (IoT)”.
Building on Africa’s recent growth
Recent technological growth across Africa’s 54 countries has given it a platform to further investigate and encourage the development of a digital ecosystem and economy.
Mehdi El Alaoui, head of startups at the Digital Development Agency
Mehdi El Alaoui, head of startups at Morocco’s Agence de Développement du Digital (Digital Development Agency), explained the levels of growth for African startups seen in recent years:
“There are important factors driving African startup ecosystem growth. The first of these is internet and smartphone adoption rates. We are growing rapidly in Africa, with over 450 million people expected to be online by 2025.
“In 2019, African startups raised a record $1.5billion and ever since, investment has continued to grow. In 2022, startups raised around $6.5billion in Africa”.
Babajide Sanwo-Olu, Governor of Lagos, also commented on the growth of mobile money and mobile banking over the last two decades:
Babajide Sanwo-Olu spoke to The Fintech Times at GITEX Africa
“The World Bank came up with reports that around 15 years ago, mobile banking accounted for less than two per cent. In 2017, this number reached 21 per cent. By 2021 we saw well over 20 per cent of the population engaging with mobile banking,” Sanwo-Olu explained.
Meanwhile, in the last five years, fintechs have dominated the African market, as the sector averaged between 40 and 60 per cent of all deals in the continent. Around 500 million people in sub-Saharan Africa have no proof of legal identity, while in 2021, 45 per cent of the population in the region remained completely unbanked.
Fintechs have been able to thrive by offering flexible and easy-to-access solutions in this largely unbanked and underbanked landscape.
Africa’s unique position and young population
Another recurring point throughout many of GITEX Africa’s on-stage panel sessions and keynote speeches was Africa’s distinctly young population when compared to any other continent.
In fact, Africa has the youngest population in the world. Around 60 per cent of its entire population is under the age of 25. This presents an important opportunity that, if utilised and trained properly could ensure a bright future in coming years for Africa’s tech and talent ecosystems.
Jérôme Hénrique, CEO of MEA for telecommunications corporation Orange, explained that “investing in Africa also means training young people – both men and women”.
Like much of the rest of the world, Africa is also experiencing a talent shortage. Having experienced significant growth in the tech industry in recent years, the struggle is now ensuring there is enough talent to fill the gaps.
Mehdi El Alaoui explained that while more training needs to be done – Africa has no shortage of people, many of whom are already trained in areas that are calling out for talent: “Africa has the most valuable asset, which is people. Across the continent, we have a growing team of talented people, entrepreneurs and tech professionals. We now know that there are more than 500,000 software developers across Africa.”
GITEX Africa 2023’s opening ceremony
What considerations must the continent make in building a digital market?
Michel Rogy, digital development practice lead in Africa and MENA for The World Bank, laid out the main areas that need significant focus when establishing a digital market for the entire continent:
“We need to have harmonised frameworks, data protection, cybersecurity, privacy and intellectual property so that wherever we are on the continent, we face the same trust environment. With this in place, we can offer as many services as possible across the whole of Africa.
“Secondly, we need to be implementing and maintaining robust cybersecurity infrastructure and operational teams so that we can adjust to the constantly evolving world of cyber threats.
“Lastly, we need to ensure that there is a strong cyber awareness because cybersecurity is something that is the responsibility of each of us”.
The thoughts of Dr Mohamed Al Kuwaiti, head of the UAE Cybersecurity Council, mirrored Rogy’s belief: “If we don’t approach digital transformation right, we will fall victim to many attacks. We need to ensure cybersecurity knowledge is prevalent across our entire human capital”.
So, how likely actually is a single digital market for Africa?
Although there is clearly strong motivation and appetite for the creation of a single digital market across Africa to become a reality as soon as possible, some of the challenges that have previously made progress difficult in the region may be causing issues once again.
Trixie Lohmirman, EVP of the Dubai World Trade Centre and CEO of KAOUN International
Trixie Lohmirman, executive vice president of the Dubai World Trade Centre and CEO of international events firm KAOUN International, sat down with The Fintech Times to give her take on the potential and challenges of such an undertaking:
“When you look at the African region, the continent, you have 54 countries, and each of them from East to West are at very different stages of development. Infrastructure, logistics and supply chains are all at different points and this is challenging.”
Recent trade agreements and tech developments have also already enabled greater levels of cross-border collaboration between a selection of countries in Africa. Juliana Rotich, head of fintech at Kenya-based mobile network operator Safaricom, explained what this meant for the payment scene on the continent:
“We’re seeing that with the Africa Free Trade Area agreement, the barriers between African countries are being reduced and hopefully eliminated – enabling us to be able to travel freely and to transact freely. With M-PESA Global, you can actually send money to more than 12 different countries. You can send now money to Pakistan, Zambia, Malawi, Tanzania and Uganda, and we’re seeing some really interesting customer behaviour”.
GITEX Africa is providing a platform for African progress
Lohmirman also discussed the role GITEX Africa can play in helping the goal of the African Union become a reality: “We are here to create connections and to provide that open platform. But more importantly, this event wants to give a lot of governments critical momentum. GITEX Africa can provide the momentum and openness for change in the continent. Momentum is needed if you want to get different countries with a lot of disparities to come together to align and harmonise”.
“GITEX Africa can provide the momentum and openness for change in the contINent”
“Now, we hope all the governments, partners and communities can use this platform wisely every year. We want them to take this occasion to build on our existing position and to further develop initiatives and programmes which work towards the 2030 vision”.
Although challenges remain, the level of collaboration already being seen and that was showcased at GITEX Africa 2023 highlights the fact that building a secured digital single market is a very real possibility. Whether or not this potential can be realised by 2030 is yet to be seen – but exciting times are surely ahead for Africa.
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