Research: How Technology Could Promote Growth in 6 African Countries
The team at Digital Planet and the IBGC recently published research that outlines the ways technology can promote growth in 6 African countries. The countries studied in the report are Egypt, Ethiopia, Kenya, Nigeria, Rwanda, and South Africa.
Africa is widely seen as the next big growth market, and there are many reasons for this belief. Chief among them are the contintinent’s young populations, which promised to be a major consumption market over the next three decades. Additionally, this large consumer market will likely be mobile phone-enabled, making it easier for individuals to access the internet and make digital payments.
However, Africa still faces significant obstacles. In the report, Bhaskar Chakravorti and Ravi Chaturvedi explain how growth in Africa has stalled; both the IMF and the World Bank have cut their 2019 economic growth projections for sub-Saharan Africa (SSA) to 3.5% and 2.8%, respectively, with growth in 2018 at 2.3%. Poverty had increased — 437 million of the world’s extreme poor are located in SSA — and 10 of the 19 most unequal countries in the world are in SSA, as well. The IBGC team states that The World Bank projects that if poverty reduction measures and growth remains sluggish, African could be home to 90% of the world’s poor by 2030.
Despite these statistics, African markets remain one of the biggest sources of untapped potential in the world — and this is especially true for digital technologies. Inspired by this notion, the research team at IBGC and Digital Planet teamed up with the Mastercard Center for Inclusive Growth to better understand the digital economies of 6 African countries. The team examined the countries through three primary categories of levers that could translate digital technology uptake into development and inclusive growth: jobs enabled by digital platforms; institutional drivers necessary for digital success; and the foundational digital potential of the country. The graph below shows the overall performance of each country studied:
The report offers a useful point of departure for policymakers looking to build and sustain Africa’s digital economy and for business leaders aiming to invest in Africa’s vast potential.
Interested in learning more? Read the full article on Harvard Business Review or take a look at the report overview.