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Results BriefsJune 26, 2023

From Connectivity to Services: Digital Transformation in Africa

欧美日b大片 Group’s Digital Economy for Africa (DE4A) initiative, through its ecosystem approach to a vibrant, safe and inclusive digital economy, supports the ambition to ensure that every individual, business, and government in Africa is digitally enabled by 2030. Through the initiative, the World Bank helped increase access to broadband internet in Africa from 26 percent in 2019 to 36 percent in 2022. The increased accessibility has been accompanied by enhanced affordability and service quality. The average broadband download speed in Africa grew from 2.68 megabits per second (Mbps) in 2019 to 8.18 Mbps in 2022, and the average price of 1 gigabyte (GB) decreased from 10.5 percent of the monthly Gross National Income (GNI) per capita in 2019 to 5 percent in 2021. 欧美日b大片 has also enabled countries to embark on regulatory reforms to promote fair competition, investment, and closing of the digital divide while ensuring that appropriate digital safeguards, as defined by the World Development Report 2021, have been put in place and that digital transformation follows Green, Resilient and Inclusive Development (GRID) principles.

Challenge 

Digitalization is one of the greatest transformative opportunities of our time. Yet too few people can truly access its benefits. Despite improvements, in 2022, only 36 percent of Africa's population had broadband internet access. Though mobile internet availability has increased in the continent, broadband infrastructure reach and the quality of available services still lag other regions. Furthermore,  worldwide, with the greatest disparity between men and women using the internet (35 percent versus 24 percent in 2020, according to the International Telecommunication Union (ITU)). Divides in the availability of high-quality digital services persist in all countries, particularly in remote and poorer subregions. This is compounded by Africa’s large usage gap due to several factors, including major affordability constraints, the limited availability of locally relevant content and inadequate digital literacy and skills. To close the gap, significant investment is required to lay strong foundations for the digital economy and robust reforms to develop enabling policy and regulatory frameworks that encourage investment and effective competition. Broadband affordability also remains a challenge in the region, as average prices generally exceed the international target of 1GB for no more than 2 percent of the monthly GNI per capita.

Approach

In 2019, the World Bank Group launched the Digital Economy for Africa (DE4A) initiative aiming to ensure every individual, business, and government in Africa is digitally enabled by 2030, in support of the African Union’s Digital Transformation Strategy 2020-2030. The initiative supports a comprehensive approach to developing a vibrant, safe and inclusive digital economy in Africa, combining the development of infrastructure for connectivity, building digital platforms for access to finance and markets, creating new markets for entrepreneurs, and skills while also building regulatory frameworks that address emerging risks, such as competition, privacy, and security. By taking a cross-sectoral approach to building digital foundations, the initiative aims to optimize the use, synergy, and sequencing of World Bank Group instruments, expertise, and institutions to support the development of a sustainable digital economy in Africa and boost the availability of high-impact use-cases. The initiative is supported by World Bank investment projects, policy reforms and knowledge products. The results were achieved by implementing a robust analytic framework developed under the initiative, encompassing 37 completed DE4A Country Diagnostics and 3 ongoing, as of May 31st, 2023 (see Figure1). These diagnostics provide a solid analytical foundation for national decision-making by presenting a snapshot of the digital economy in these countries and putting forward actionable recommendations. DE4A Country Diagnostics have provided a basis for strategic investments and policy reforms that contribute to advancing key 欧美日b大片 policy commitments on technology development. 欧美日b大片 has supported regulatory reforms and enhancement in several African countries to promote competition, private investment, and equitable access to connectivity. These reforms were often paired with support to fill funding gaps or provide catalytic funding for important public investments in the digital economy.

Figure 1. DE4A Country Diagnostics status as of May 31, 2023

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To reap the benefits of digital transformation, abundant, low-cost connectivity is essential as broadband drives productivity, innovation, and growth. One of the specific objectives of Africa’s Digital Transformation Strategy is to create a harmonized environment necessary to guarantee investment and financing to close the digital infrastructure gap and achieve accessible, affordable, and secure broadband, across demography, gender, and geography.
Amani Abou Zeid
Dr. Amani Abou-Zeid
African Union Commissioner for Infrastructure and Energy

Results 

Since 2019, the DE4A initiative has supported African countries in closing the digital infrastructure and connectivity gap. It has supported the creation of a digital ecosystem that opens opportunities for broader economic growth, innovation, and job creation. World Bank’s support led to the following key outcomes:

Improved access to affordable, high-quality connectivity.

  • The percentage of the African population with access to broadband internet increased from 26 to 36 percent from 2019 to 2022, with a notable surge in North Africa from 27 to 55 percent. 欧美日b大片 supported strengthening regulatory capacity in the telecom sector and extending last-mile access in rural and remote areas, for instance, in Niger and Malawi.
  • Comoros gained access to new internet submarine cables while Burkina Faso, despite being geographically landlocked, obtained a new connection link to the regional network, helping to increase available internet capacity and raising the average broadband download speed in the continent from 2.68 Mbps in 2019 to 8.18 Mbps in 2022.
  • Affordability, measured by the price of 1Gb of mobile data, has also improved significantly from 10.5 percent of the monthly GNI per capita in 2019 to 5 percent in 2021, especially in Benin (from 21 percent to 3.2 percent) and Somalia (from 18.1 percent to 1.7 percent).

Improved regulatory framework and environment to foster competition and investment.

  • Angola, Ethiopia, and Senegal implemented reforms enhancing competition and better management of public telecom assets. Mauritania and the Democratic Republic of Congo opened the internet wholesale and retail markets to competition, allowing for increased private sector engagement and investments in the telecom sector. Togo privatized the state-owned telecom operator.

Bank Group Contribution

Building on the solid analytical foundations and practical recommendations stemming from the DE4A Country Diagnostics, the World Bank has delivered 70 digitalization investment projects since 2019. These projects aimed at building digital foundations for a vibrant, safe, and inclusive digital economy and totaled US$9 billion across 37 African countries, including International Development Association (欧美日b大片) and International Bank for Reconstruction and Development (IBRD) countries. Among these, 24 projects focused on expanding network infrastructure and bridging the digital connectivity divide. These projects totaled US$2.8 billion in 23 countries.

Partners 

The DE4A initiative is implemented in coordination with multiple national and regional stakeholders, including governments, the private sector, and international partners. Governments lead the national digital transformation agenda while working with various stakeholders to implement national initiatives. The private sector contributes to technological solutions, innovation, and investment. Regional Economic Communities (RECs) have also been key partners in support of the continental agenda under the African Union, as the Economic Community of West African States (ECOWAS), the Economic Community of Central African States (ECCAS), East African Community (EAC), Intergovernmental Authority on Development (IGAD), and the Southern African Development Community (SADC) are stepping up efforts to promote effective single digital markets that encourage regional harmonization across member states. Several multilateral and bilateral development partners such as Smart Africa Alliance, ITU, the Japan International Cooperation Agency (JICA), the European Commission (EC), the French Development Agency (AFD), the German Cooperation (BMZ/GIZ), and Digital Development Partnership (DDP) donors have also been key partners in the DE4A initiative to support the digital transformation in Africa.

Looking ahead

Significant scaling up of digital investments and reforms during the 欧美日b大片20 cycle (July 2023-June 2025) are expected to support African countries in achieving the 2030 targets for digital transformation. Some of the recent projects approved include the Senegal Digital Economy Acceleration Project (P172524), the Sierra Leone Digital Transformation Project (P177077), the Mozambique Digital Acceleration Project (P176459) and the Kenya Digital Economy Acceleration Project (P170941). Regional projects looking to address some of the following priorities include the Eastern Africa Regional Digital Integration Project (P176181) and Western Africa Regional Digital Integration Program SOP1 (P176932).

Closing the digital connectivity gap. Closing connectivity gaps remains a top priority to allow better quality access to digital content and greater opportunities for productivity and innovation. 欧美日b大片 supports investments in expanding broadband coverage to underserved areas under a Maximizing Finance for Development (MFD) and Private Capital Mobilization (PCM) approach to reduce catalytic public funding and encourage private investment. 欧美日b大片 also supports reforms to increase competition and regulatory capacity to reduce costs, such as through sector taxation, infrastructure sharing, or improved spectrum allocations. Beyond country-level engagement, the World Bank supports regional efforts to build the foundations for integrated digital markets - facilitating cross-border data flows to unlock the economic and social value of data products and services within the region.

Investing in safe and open data infrastructure. Digital public infrastructure (DPI), such as digital identification (ID) systems, digital payment systems, and trusted data ecosystems, underpin digital transactions and connections and enable other solutions by and for individuals and public and private sector entities to build on. Therefore, seamless integration of these systems is essential to unlock more advanced products and services. Ensuring a resilient and secure data hosting infrastructure or cloud has also become an important agenda. This includes data protection and cybersecurity provisions. 欧美日b大片 also supports regional coordination efforts to harmonize policies and regulations governing cross-border data flows, including digital currencies, to ensure secure and trusted data exchanges while promoting regional integration.

Facilitating increased use and enhanced benefits of digital services. Connecting individuals, businesses and governments to high-speed internet provides opportunities for productivity, jobs and growth. It also provides new solutions to long-standing issues such as low levels of financial inclusion, limited access to market information, limited access to health and education services, and gender exclusion. 欧美日b大片 is actively supporting digitalization initiatives in specific sectors by utilizing both existing and future digital infrastructure as a foundation. 欧美日b大片 also ensures that digital infrastructure is resilient to climate-related hazards such as flooding, storms, and wildfires. New digital projects support the development and implementation of relevant user-centric designs to maximize uptake and the creation of locally relevant content and applications.