Africa's digital transformation: Key insights

  (photo credit: INGIMAGE)
(photo credit: INGIMAGE)

The growth of digital technology in Africa is creating opportunities throughout the whole economic landscape of the continent. Sub-Saharan Africa continues to lag behind other regions in terms of internet adoption, albeit the gap is narrowing. Other parts’ internet user growth has been three times faster than in Africa, where the number of users has increased by a factor of ten since the early 2000s. Digital technology, including container registry solutions, is making it easier for people in many parts of Africa to see improved financial services, energy grids, agriculture, infrastructure and communication among other smaller sectors of the global economy.

The digital revolution in Africa is touching all sectors of the continent's economy and bringing about beneficial social developments. The market for telecoms in this region is expanding at the fastest pace in the globe. Despite substantial gains, a digital gap persists. There are still 900 million people who do not have an Internet connection, and those who do sometimes face expensive costs and restricted capabilities.

Everyone should have access to digital technology and solutions that can aid in mitigating the impacts of domestic and global challenges. For example, the World Health Organization (WHO) says that the COVID-19 pandemic has created a need for digital health technology solutions that have never been seen before. These solutions are needed to screen the population, track infections, set priorities for resource use and allocation, and make targeted medicines.

Africa Is on the Verge of a Technological Boom

In Africa, the number of businesses that solely operate online is growing. Since 2012, the internet's contribution to some African countries' GDP has more than quadrupled, rising from 1.5% to over 3%.

Certain nations are doing well. Kenya, Morocco, Senegal, and South Africa will all have internet-driven GDP (iGDP) rates close to 6% by 2050, the same as the United States. Others, like Ghana, will achieve 4%–5% iGDP, which is similar to Brazil's.

Local Digital Transformation Is Accelerating

Africa has the potential to benefit from the link between technology improvement and economic growth. Over 500 million people in Africa now have access to the internet, which is similar to the number of people in India (50%). In contrast to the worldwide average of 2%, Africa's GDP per capita is predicted to rise by 2.5% for every 10% increase over the next decade. Local firms have embraced these opportunities. The usage of digital tools and platforms in business has increased in the past two years.

Governments are also sending some optimistic signals. Recent initiatives to foster innovation are an attempt to accelerate the speed at which technology is produced. The Tunisian Startup Act is a piece of law that encourages and supports digital entrepreneurship. While the Egyptian government has created an AI portal to publicize upcoming AI events and initiatives, the Nigerian government intends to build a center for AI and robotics. Both of these projects were carried out by the governments of the respective nations. Many people think that the Africa Continental Free Trade Agreement could help digital companies across the whole continent in a big way.

Startups Surge

The success rate of African businesses is skyrocketing. Since 2020, venture capital investment has risen to $4.3 billion in 2021. These investments benefit Africa's innovative firms and innovations. Nigeria has some of the top training and skill development programs in the world, and the nation also has a supportive environment for startups.

Final Thoughts

 As we've seen, Africa's digital future has a lot of promise and corporations must pay attention. How do they go about getting things done?

Multinational companies are one example that springs to mind. Amazon, Google, Microsoft, and Orange have all made considerable investments in digital infrastructure and professional development to fortify the IT ecosystem's underpinnings. Because they worked with local governments and businesses, they were better able to deal with laws and regulations, as well as the needs and wants of local people.

Both goods and services must be localized. M-Pesa was established in Kenya in 2007, and it was the first mobile banking service available outside of Africa. It quickly became an important part of many African countries because it gave payment services to more than 50 million people who hadn't had them before and got around the traditional telecom and banking infrastructures.

Low-code solutions have the potential to democratize digital innovation in Africa. These might speed the continent's digital transition and allow a new generation of local developers to create inventive and powerful new products for the African market and beyond. It's feasible that they'll help local IT firms compete both locally and globally.

The opportunities are endless. Every worldwide growth plan, regardless of industry, must include Africa.


This article was written in cooperation with JFrog