Report Explores How Digitalization Can Create Quality Jobs in Africa and Contribute to Achieving the African Union's Vision for the Continent's Development

"COVID-19 poses an unprecedented threat to financing Africa's development by creating new risks and exacerbating pre-existing vulnerabilities," according to a report jointly prepared by the African Union's Commission for Economic Affairs and the OECD Development Centre with support of the European Union. More encouragingly, however, the report explains that the COVID-19 crisis is strengthening "the role of digitalization in contributing to Africa's productive transformation and in fulfilling Agenda 2063, the African Union's vision for the continent's development."

Africa's Development Dynamics 2021: Digital Transformation for Quality Jobs is a fact-filled annual reference book that "brings readers the latest information on development policies on the African continent and its five regions" – Central, East, North, Southern and West Africa. Furthermore, "It presents a new narrative assessing Africa's economic, social and institutional performance in light of the targets set by the African Union's Agenda 2063. This third edition of Africa’s Development Dynamics explores how digital transformation creates quality jobs and contributes to achieving Agenda 2063, thereby making African economies more resilient to the global recession triggered by the COVID-19 pandemic."

The report's Executive Summary importantly notes that "governments can drive Africa's digital transformation and trigger large-scale job creation, including outside the digital sector, through four complementary actions:

• "Promote the dissemination of digital innovations beyond large cities through place-based policies. Ensuring universal access to digital technologies calls for enhancing coverage, affordability and the availability of suitable content. Internet access has expanded thanks to the growing prevalence of mobile phones: 72% of Africans now use them regularly, with the highest number in North Africa (82%) and the lowest in Central Africa (63%). However, digital adoption remains unequal across genders, income groups and other groupings. Only 26% of the continent's rural dwellers use the Internet regularly, compared to 47% of its urban inhabitants.
• "Prepare Africa's workforce to embrace digital transformation and guarantee social protection. By 2040, own-account and family workers will represent 65% of employment under current trends. The share of own-account and family workers will be the highest in West Africa, accounting for 74% of employment in 2040, and the lowest in North Africa at 25%. Presently, 45% of youth feel their skills are inappropriate for their jobs. The apparition of new livelihoods on the web requires setting solid regulatory schemes and providing social protection for informal iWorkers.
• "Remove barriers to innovation that prevent smaller firms from competing in the digital age. Dynamic small and medium-sized enterprises (SMEs) need support to adopt the most appropriate digital tools for innovation and trade. For example, having a website is positively associated with a 5.5% increase in the share of direct exports in firms' sales. Only 31% of firms in Africa's formal sector have a website, compared to 39% in Asia and 48% in Latin America and the Caribbean. Today, only 17% of Africa's early-stage entrepreneurs expect to create at least six jobs, the lowest percentage globally. Enticing these firms to scale up is critical for job creation.
• "Deepen regional and continental co-operation for digital transformation. Digital technologies pose new challenges to national regulators. Supranational co-operation can provide solutions in areas such as digital taxation, digital security, privacy, personal data protection and cross-border data flows. Harmonizing continental and regional regulations is an important complement to national laws. As of today, only 28 countries in Africa have personal data protection legislation in place, while 11 have adopted substantive laws on digital security incidents."

To support the four recommended actions above, the report presents the main policy areas for digital transformation for each of the five regions:

Central Africa

• Co-ordinate investment in digital infrastructure regionally to expand coverage and ensure inclusive and reliable access.
• Equip the workforce with the adequate skills to facilitate the school-to-work transition and reduce the skills mismatch.
• Leverage digital technologies to promote entrepreneurship and foster the digital transformation of regional value chains.
• Implement, monitor and evaluate digital strategies at the regional and national levels.

East Africa

• Facilitate the school-to-work transition, notably through digital literacy and technical and vocational education and training (TVET) programs, and monitor technological developments to anticipate future skills requirements.
• Nurture digital entrepreneurship and innovation by adapting the regulatory environment, and promote technology parks, notably through easier financing.
• Strengthen regional co-operation on digitalization, and mobilize public and private resources for regional infrastructure.
• Set up a single digital market by promoting seamless connectivity, harmonizing regulations and facilitating the interoperability of cross-border payments.

North Africa

• Support the development of financial technology by loosening regulatory constraints and experimenting with new regulations (e.g. sandboxes).
• Modernize education and training systems by monitoring and evaluating digital literacy and programs for science, technology, engineering and mathematics, and promote lifelong learning and reskilling of the workforce.
• Encourage digital entrepreneurship by fostering innovation through public-private partnerships and improving governance in the region.

Southern Africa

• Reduce the digital divide by developing reliable and affordable digital infrastructure beyond urban centers.
• Improve the quality of education and promote lifelong learning to meet future skills demand.
• Harmonize existing digital initiatives at the national and regional levels, and accelerate their implementation, targeting the digital transformation of strategic value chains.

West Africa

• Strengthen government support to technology parks and start-up incubators, and monitor progress.
• Implement supportive regulatory frameworks to develop fintech, foster financial inclusion and diversify sources of financing for private sector development.
• Support entrepreneurs and SMEs in using digital technologies, especially in agricultural sectors, to strengthen their integration into regional and global value chains.
• Invest in human capital to align skills with future market needs, and promote TVET through strategic partnerships with the private sector.

Regarding cybersecurity, the report reveals that "Only a fifth of African countries have a legal framework for cybersecurity (digital security), while just 11 countries have adopted substantive laws on cybercrime (digital security incidents)." What is more, "In 2014, the 23rd Assembly of the AU Heads of State and Government adopted a Convention on Cybersecurity and Personal Data Protection as a first step towards continental co‑operation. Yet, as of June 2020, only 14 AU member states had signed it, and 5 had ratified it (Ghana, Guinea, Mauritius, Namibia and Senegal). This is still far from the 15 ratifications required for the Convention to enter into force."

And addressing the urgency for cooperation in digital security, the report asserts that the "cost of cybercrime in Africa is increasing and brings the risk of holding back Africa's digital revolution. Several assessments show that Africa's online ecosystem is one of the most vulnerable in the world."

Lastly, the report includes an editorial authored by H.E. Moussa Faki Mahamat, Chairperson of the African Union Commission, and H.E. Angel Gurría, Secretary-General of the Organization for Economic Co-operation and Development, which says, in part, "For Africa’s economic recovery to be sustainable, the digital transformation must be felt in all of the continent's priority sectors. This will require the commitment of all stakeholders, both private and public, and of the continent's partners."

What are your recommendations for how to stimulate the digitalization of economic sectors to kick-start a new growth cycle after COVID-19?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.