Understanding the Role of Technology in Promoting inclusive Growth in Africa

Understanding the Role of Technology in Promoting inclusive Growth in Africa

As the world continues to become
more digital, building an inclusive world in which the digital economy works
for everyone, everywhere, is crucial. 

A recent research collaboration between the MasterCard Center for Inclusive
Growth
 and The Fletcher School at Tufts University highlights the strengths and opportunities of six major
countries in Africa for harnessing the true potential of technology to drive
inclusive growth.  

With financial support from the MasterCard Impact Fund, the African Leapfrog Index (ALI) –
which was launched during the World Economic Forum on Africa – uses Egypt, Ethiopia, Kenya, Nigeria, Rwanda, and South Africa as
examples to
provide insights on key drivers that could accelerate digital inclusion across
the continent.

The ultimate aim of the report is to help
countries across Africa optimize their burgeoning digital evolutions, in order
to accelerate economic development. The countries were selected based on their
size, economic growth, the median age of residents, quality of governance, and
digital momentum.

There are many reasons to be optimistic about the transformational
potential of digitalization in Africa. According to the ALI, Kenya, for example, has seen the greatest
amount of digital change over the past decade of all African countries studied,
and currently has over 80 percent internet penetration.

Going forward, the country’s
potential to leapfrog will benefit from leveraging this digital change to
nurture jobs in the digital economy, such as online freelance, ridesharing, and
in e-commerce.

With nearly 50 million people added to the labour force in the next few
years, most of whom will fall somewhere on a spectrum between digitally
sentient and digitally sophisticated, the digital economy is poised to be not
just the driver of consumption but also of livelihoods.

South Africa, in particular, has been
highlighted in the research for its
ease to create highly skilled digital jobs, primarily driven by strong consumer
demand and an institutional environment with friendly regulations.

Expanding the integration and use of
digital technologies across all segments of society, particularly to those who
sit at the lower end of the pyramid, will help the country tap into the full
potential of this environment.

Raghav Prasad, Divisional President, Sub-Saharan Africa, MasterCard
said “Digitization has the greatest potential to overcome infrastructure
barriers to accelerate inclusive economic growth across multiple sectors of the
economy. Independent research like the African Leapfrog Index equips
policymakers and community leaders with data-driven insights to inform economic
development; and it can help other key stakeholders across all sectors better
understand the opportunity for – and pathways to – digital inclusion on the
continent.”

The six countries were examined
against three primary variables for harnessing digital technologies to
facilitate development and inclusive growth. These variables are “Ease of Creating Digital Jobs,” “Resilience of Governance and Infrastructure” and
“Foundational Digital Potential.”

Speaking on the findings of the
research, Professor Bhaskar Chakravorti, Dean of Global Business at The
Fletcher School at Tufts University said,

“The ALI is intended to help
countries and stakeholders in Africa recognise where the potential for
technology-led leapfrogging is high. This means acknowledging the strengths of
each country and which policy areas are prime candidates for intervention to
enable stakeholders to prioritise resources appropriately.”