Growing Africa’s digital economy requires more than policy

With Africa’s digital economy projected to reach $180 billion by 2025, African governments are racing to implement policies that  encourage innovation and provide guardrails that ensure fair use of the technology.

Sandboxes, startup acts, and other policies have been developed across the continents to enable more innovations, but policymakers on a panel discussion at Moonshot by TechCabal on Wednesday, say there is a need for additional steps to fully capitalize on the potential of the digital economy.

“In the way that love is not enough [for a relationship to grow],  policies are not enough for the digital economy,” said  Victoria Manya who moderated the discussion which featured Kashifu Abdullahi,  the director general of Nigeria’s National Information Technology Development Agency (NITDA),  Dr Augustina Odame, CEO  of Ghana Chamber of Technology,  and Marine Kane, Director of Innovation at the Ministry of Digital Transformation in Mauritania. 

The  digital economy needs more  infrastructure

The infrastructural deficit makes founders spend funding on resources that would be cheaper if availed by the government, according to Dr. Odame.

“It’s a bit difficult to justify entrepreneurs spending huge sums of money to source critical things like data when there’s certain data that sits with government agencies that could easily be cleaned,” Augusta said.

Instead of building this market infrastructure from scratch, businesses can optimise their limited funds to fine-tune their products or do other important things. 

Odame acknowledged that certain infrastructural needs, such as broadband and electricity, may be beyond the capabilities of governments alone. She advocated for partnerships with the private sector and development partners to leverage their resources and create investment vehicles.

“We’ve seen a lot of private-public sector partnerships go south, but we need it. It’s a key way that we are going to finance some of this huge capital infrastructure necessary for development.”

Even with existing infrastructure, leaks remain prevalent in sectors like broadband and electricity. This often leads to unnecessary expenditures, such as repeated repairs of poles and infrastructure. For example, Ghana’s telecommunication sector reported losses of over $6 million due to fiber cuts in the first half of this year.

For the digital economy to grow,  measures that prevent redundant investments and promote a more efficient allocation of resources should be put in place.

The digital economy also needs to look within

While Africa is brimming with innovative startups, not all the countries have the characteristics necessary for long-term success. Infrastructure is a vital component of economic growth, but it’s equally important to focus on the capabilities of the businesses driving the digital economy. 

Manley talked about how Sierra Leone is equipping innovators with the skills necessary to attract and effectively utilize investments. 

”We set up Tech City, to train tech operators in business development, financial management, and other things on how to run a business to make them market-ready.”

Governments across Africa are also extending similar trainings to citizens especially ICT trainings on key skills that make them employable locally and internationally. In Nigeria for instance, NITDA organizes ICT trainings. 

It also supports the Ministry of Communications, Innovation and Digital Economy’s Three Million Technical Talent programme (3MTT).

“According to the World Bank by 2030 there will be 85 million talent deficit, which, if left unaddressed, could lead to $8.5 trillion dollars in unrealized annual value,” Abdullahi said.  “Looking at our young population, we can harness that population and position ourselves to become the global talent factory to bridge this gap deficit.“

No one should be left behind

Manley emphasized the importance of supporting marginalized groups, such as the disabled and women, in acquiring skills and accessing funding for their ideas. He also acknowledged that other groups may face similar challenges and require additional attention.

“When we are identifying exclusion in terms of the digital economy, we’re talking about things like lack of access to connectivity,” he said. Stakeholders need to identify other forms of marginalisation and figure out a way to collaboratively address them.

While policy plays a crucial role, it alone cannot create the digital economy Africa envisions. Moonshot ideas and collective commitment are essential to bridge the gap between vision and implementation and shape the future of tech on the continent.