Homegrown digital innovation is key to unlocking Africa’s vast economic potential

by MMC
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As the economic fallout from the COVID-19 pandemic and the war in Ukraine has dominated recent media coverage of Africa, political leaders across Africa have shown another side from the continent to this year’s edition BRICS Summit in Johannesburg.

Ahead of the summit, South African President Cyril Ramaphosa notably related Africa’s strengthened engagement in BRICS with “greater opportunities” for participation in the African Continent Free Trade Area, which will play a vital role in developing local African value chains in strategic markets and lucrative sectors such as green energy and digital connectivity.

To this end, digital innovation will be key to boosting Africa’s international trade integration and unlocking the continent’s socio-economic promise – a reality its homegrown tech disruptors are already demonstrating.

Recent setbacks must be reversed

In Africa’s current socio-economic climate, digitally driven development initiatives are a pressing issue. The World Bank notably quoted The unfortunately insufficient access to mobile Internet in Africa constitutes a major obstacle to job creation and poverty reduction. The problem is not only a question of infrastructure but also of human capital. It is telling that on average 84% and 63% of local populations in sub-Saharan Africa are covered by “some level” of 3G and 4G services, respectively, and yet only 22% were using mobile internet services at the end of 2021.

Africa has the youngest and fastest growing country population in the world, which will see the continent assume the the greatest part of the global working population by 2100, according to the World Bank. This demographic potential is greatly reinforced by the thriving technology hubs emerging in urban centers such as Nairobi, Accra and Lagos, where disruptive businesses and entrepreneurs are located joining forces provide affordable digital access, skills and technologies tailored to local needs.

Promising local solutions emerge

Driven by the conviction that digital technology now constitutes a fundamental right, Telecel Group – Africa’s first and oldest mobile telecommunications operator – has scaled up operations across the continent to facilitate widespread access to mobile broadband, including in the poorly connected West Africa region, particularly in Senegal, Liberia and the DRC.

Recent Telecel coups include majority stake acquisition from Vodafone Ghana in February, where the company plans to deploy an additional 2,000 towers. It is essential that Telecel harnesses the latest innovations in telecommunications to digitize Ghana’s most remote areas and promote socio-economic inclusion. In April, Vodafone Ghana sealed a collaboration with the satellite-mobile operator Lynk which will provide reliable coverage to all its customers, relying on the pioneering satellite of Telecel and Lynk project in the Central African Republic (CAR).

Furthermore, Telecel is committed to An investment of 700 million dollars in Africa to help individuals and businesses unlock their digital potential. In this effort, it is Africa Start-up Initiative Program (ASIP) will be essential, with its training, resources and funding for innovative local businesses, fueling the development of local digital solutions to the continent’s challenges. With sustainability a top priority, ASIP’s latest cohort understand innovative startups in the Climate-tech, AgriTech and GreenTech sectors, such as BD waste in Ghana, Secure track in Morocco and Limawa in Ivory Coast.

Beyond investment, Telecel has demonstrated its market leadership through its ESG strategy, which has led the company to run its data centers and cell sites on green energy to reduce its carbon footprint . In addition, Telecel has engaged to the deployment of energy-efficient micro-data centers in CAR and Liberia to help sustainably meet the continent’s growing digital demand.

This expansion of mobile Internet notably supports the boom in mobile banking services in Africa. Indeed, many citizens are turning to digital banks, triggering a “neobanking fintech revolution” initially led by M-PESA from Safaricom service in East Africa that is disrupting digital banking Xhuma just introduced in South Africa.

This local fintech player offers its customers a combination of affordability and simplicity for their digital banking needs, from instant automated transfers to group payments and savings management. By financially empowering the communities it serves, Xhuma aims to inspire a new digital era in its home country, shaped around the needs of its digitally-minded younger generations, particularly in terms of to strenghten financial literacy skills to support socio-economic growth.

Meanwhile, private innovation organizations like the Lagos-based company Co-creation center – Africa the biggest innovation center – demonstrating the importance of public-private partnerships in transforming communities through social purpose technology. His new $15 million Edtech Scholarship The accelerator program will help over 70 start-ups in this emerging field develop digital solutions to Nigeria and Kenya’s pressing education challenges.

Governments lay the foundations

Weak governance and rule of law problems pose a significant obstacle to economic growth. African governments must create an appropriate regulatory environment to stimulate private sector entrepreneurship and innovation.

Indeed, the main centers of technological innovation on the continent have all been stimulated by favorable public policies. In Cape Town, the South African government’s technology fund and tax incentives have spurred significant growth in fintech and e-commerce start-ups, while Nairobi’s thriving “Silicon Savannah” ecosystem has benefited greatly from the Center international financier of the Kenyan government, which supports investors. and helps local fintech start-ups identify financing opportunities.

In the future, the benefits of strong regulation could be significantly enhanced by deeper regional cooperation, with the African Continental Free Trade Area (AfCFTA) offering vast potential. According to According to the World Bank, removing trade barriers and harmonizing e-commerce, competition and investment regulations could reduce extreme poverty by 50 million people while increasing foreign direct investment by well over 100%.

It is encouraging that the acceleration of the AfCFTA was high on the agenda of the BRICS summit. Government leaders in Africa and the Global South recognize its potential to fuel mutually beneficial development, including laying the foundations for high-value regional supply chains that feed into global trade networks. Through this international partnership, Africa can help fuel innovation and long-term sustainable growth domestically and across the developing world.

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