The African Union published the Digital Transformation Strategy for Africa (2020–2030) in 2019 based on previous initiatives and discussions with numerous players in Africa’s digital ecosystem. The United Nations Economic Commission for Africa (UNECA), Smart Africa (an alliance of 30 African countries aiming to speed up development through increased use of ICT), the African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD), Regional Economic Communities, the African Development Bank (ADB), the African Telecommunications Union (ATU), the Africa Capacity Building Foundation (ACF), the International Telecommunication Union (ITU), and the World Economic Forum were among the many organizations involved.
The strategy’s goals are in accordance with Agenda 2063 for Africa and the Sustainable Development Goals. They involve the transformation of African economies and promoting their integration through the stimulation of inclusive growth through digital technology and innovation. It builds on previous efforts and policies to help Africa become a single digital market where businesses and people have unhindered access to the internet, and the free movement of goods, services, and people is guaranteed.
Solidarity and collaboration amongst member states; an entirely new way of thinking about the digital world; and an all-encompassing, all-inclusive approach to digital transformation are all pillars of the Digital Transformation Strategy.
In 2018, the African Continental Free Trade Area (AfCFTA) came into effect, paving the way for the continent to pursue alternative industrialization strategies using digitalization’s many advantages. The original implementation date of the AfCFTA Agreement was July 1, 2020. However, because of the COVID-19 epidemic, this deadline was pushed out to the following year. However, there is a drive to advance Africa by enforcing the agreement and encouraging further cooperation and intra-African commerce, which may help the continent become more connected, make technological leaps, and withstand economic downturns caused by pandemics.
The AfCFTA secretary-general proposed a future digital payment and settlement network for African cross-border transactions in October 2020. As a result, online trade has enormous untapped potential to revolutionize and advance Africa’s economy.
Investment in infrastructure is crucial
The availability of the internet and mobile phones is increasing fast across the continent, but there is still a long way to go. For example, Morocco ranked first in connectivity, which ranks nations based on their technical infrastructure (such as download speed and network readiness). As part of its strategy to proactively invest in the country’s digital infrastructure, the Moroccan government inked a $1 billion contract with Marco Telecom in 2019. In addition, there has been a hopeful uptick in using fiber-optic cables across Africa. In 2020, Facebook announced plans to construct a 37,000-kilometer-long underwater cable across Africa to improve internet access there.
Compared to other regions of the world known for their technological prowess, Africa’s tech startup scene pales in comparison. For example, while the United States raised $156.2 billion in venture capital in 2020, African startups raised over $2 billion in investment over the previous two years, as reported by Briter Bridges. Moreover, the $3.1 billion investment that African entrepreneurs raised in the first half of 2022 is more than they raised in H1’2021 and H1’2020 combined.
The gap is still large, but it doesn’t fully reflect the recent improvements; the industry overall has shown remarkable resistance to the epidemic.
Despite the global slump, African entrepreneurs have continued to attract investment because they can meet fundamental requirements such as improved banking, electricity, and communication access.
To continue leveraging the power of technology for good and inventing innovative solutions with global applicability, African entrepreneurs will need additional financing to maintain their robust innovation pipeline.