World Economic Forum (WEF) on


… making digital transformation inevitable

The World Economic Forum (WEF) on Africa that will commence on 11th of May in Kigali, Rwanda represents an ideal opportunity for the African Continent to broker a collective transition into the inevitable Fourth Industrial Revolution when the forum’s theme of “Connecting Africa’s Resources through Digital Transformation” is tackled by the forum’s esteemed delegates.

Indeed with the utility of “Digital Transformation”, the Internet of Things (IoT) is fundamentally the next frontier in the digital revolution.

Generally it helps companies increase productivity, cut costs, offer new products and services and deploy new business models. Vital to mention also is that IoT demands an all-inclusive integration and skilled staff for effectual implementation.

For the fifty four members of the African continent, this desired transformation principally hinges on plugging in more Africans into the World Wide Web spectrum to in turn positively impact the continent’s economic growth exponentially.

Experts argue that if just over half of the continent’s population had Internet access, for instance, it would potentially yield an annual productivity gain approximating $300 billion, more than one-tenth of the continent’s recorded collective 2013 GDP.

According to the United Nations Conference on Trade and Development (UNCTAD), global creative services are growing significantly yet Africa only contributes about 1% to this domain. In this context, leaders convening at the WEF in Rwanda will be pursuing new approaches to ignite palpable structural transformation on the continent, particularly in the face of rapid technological changes that have the potential to create new industries thus being a multiplier for growth and reduction in inequality.

Partly due to slowness in the global economy, Africa’s positive economic outlook currently remains under pressure – and is, according to experts, anticipated to remain just below five percent in 2016.

As several countries in the region and across the continent improve their investment climate and undertake macroeconomic policy reforms, foreign direct investment flows are still expected to continue growing, albeit at a slower pace.

And as the continent continues to collectively administer efforts and strategies towards attaining sustainable and inclusive economic growth, domestic and inter-regional investment and trade need to be prioritized to create a multiplier effect in motivating global foreign investors.

African economies are expected to benefit more by fully adopting continental integration in all its variegated facets: be it increasing intra-African traffic through ensuring Visa free intra-African movement where Africa Visa Openness Index of 2015 expatiates reports only 11 African countries offer liberal visas access to all African citizens-to intra-regional trade and investment vis a vis fully embracing the catalyst of today’s burgeoning digital economy.

Targeting a digital economy and driving radical structural transformation as well as strengthening the public-private collaboration on key regional challenges aimed at augmenting broad based prosperity across the African landscape will unquestionably become a conceivable target.

As a result of liberalizing their respective borders, these aforementioned eleven visa-liberal countries that includes Rwanda, have seen a positive impact on tourism, investment and financial services sectors, with tourism revenues in Rwanda for example rising by 4% to USD 305 million in 2014.

According to the African Development Bank 2015 Africa Visa Openness Index only nine African countries offer Electronic visas namely: Côte d’Ivoire, Gabon, Kenya, Nigeria, Rwanda, São Tomé and Príncipe, Sierra Leone, Zambia and Zimbabwe.

Rwanda, ranked ninth in the 2015 Africa Visa Openness Index, processes over 90,000 e-Visas a year and for ninety five percent of the East African country’s visitors only five percent of visitors obtain their visas through Embassies.

To support its open visa policy at the regional level Rwanda has done away with work permits for East African Community (EAC) citizens. This has led to over 12,000 EAC citizens getting work permits free of charge.

Rwanda is also part of the Northern Corridor Integration Project (NCIP), where together with Uganda, Kenya, Rwanda, South Sudan, Tanzania, Burundi, Democratic Republic of Congo and Ethiopia have since embarked on the harmonization of cross-border ICT connectivity, legal and regulatory frameworks which has culminated into the establishment of the One Network Area (ONA) for telephone communication in an effort to enhance cross border regional trade.

Digital technologies endorsed by African countries such as the undersea fiber-optic cables are critical infrastructure as railways, electric grids, roads, and water and sanitation.

Smart partnerships between governments and the private sector are necessary to exposit the broad reach of digital infrastructure across the continent. In the absence of the aforesaid approach, benefits would be limited to pockets in urban areas, which in turn could widen or perpetuate inequities and restrain social and rural entrepreneurship.

An imperative sub-theme also on agenda of the WEF on Africa 2016 is that of “Smart Mining”.

The integration of ICT solutions in the entire supply chain of the mining industry in sub-Saharan Africa is projected to reach $13 billion by 2020, up from $5.12 billion in 2013.

With this projection, it is imperative to identify precisely which technologies can best transform the mining industry on the continent.

In other important areas such as manufacturing, it is worth noting that factory activity has only accounted for 10% of Africa’s GDP over the last ten years.

With technology high on agenda, manufacturing is widely considered to be the ideal industry to drive Africa’s development due to the labor-intensive, export-focused nature of the industry particularly in improving production and competiveness.

Till date Pareto Optimality is still a widely quoted and used principle of neo-classical economics that has endured since the late eighteenth century.

It states that any policy alternative which makes anyone worse off in their own estimation, while making other people better off in their own estimation, is not “Pareto efficient.” Conversely, if an economic state is Pareto efficient individuals are maximizing their utility.

In accordance with this economic construct it is therefore desirable for the African continent to ensure Pareto efficient improvements by integrating the digital revolution and technological advances that take cognizance of the African context and are solution-based or driven.  As an example at seventy three percent, Africa has one of the highest mobile phone penetrations in the world and in crucial social sectors such as healthcare, integrating practical mobile health technologies as a utility towards transforming healthcare remains fundamental.

In conclusion, the Fourth Industrial Revolution represents a unique opportunity for the African continent to create a future where economies are empowered and society strengthened adequately by leapfrogging technologies.

As a given, the WEF Africa 2016 will not just discuss opportunities, but also calibrate tangible plans to realize these brazen-faced technological ambitions.

By the time the World Economic Forum on Africa concludes on May 13, there is good reason to fathom that many will leave the Rwandan capital having caught the infectious bug of Agaciro, a word of great significance in current Rwanda, which loosely translates as “Self-dignity”.

The author is Charge d’Affaires a.i Rwanda High Commission Lusaka.

Categorized | Business

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