The vice-president of the European commissioner for the digital single market Andrus Ansip discusses how the EU can help Africa develop its digital economy.
Can digitisation really help development?
Yes, digital technology can achieve a lot: it can improve efficiency and integrate renewables into energy supply; it can improve public services like transport and waste disposal and help create smart cities or it can allow a faster and better data processing in order to raise industrial productivity.
I hope that Europe and Africa can do more together to highlight the benefits of digitisation. That is true for both public and private sectors. Government and business should better work together to develop digital skills and promote science, technology and innovation. The EU and African countries could create a common vision to build a bridge between national digital economies and Europe’s digital single market (DSM) in the spirit of digital cooperation.
What are the main opportunities for digital cooperation between Europe and Africa?
Agriculture is a good example of cross opportunities that need to be taken. Its importance to the African economy is well known. If one includes post-harvest activities, agriculture-related industry accounts for nearly half of all economic activity in sub-Saharan Africa. While Africa has huge amounts of fertile and unused land, it spends many billions of dollars every year to import food and uses only a fraction of its renewable water resources.
Digital agriculture, or e-agriculture, could improve the situation significantly in Africa. High-performance computing can model weather patterns and predict disasters like flooding. It can indicate the best place for planting crops at a specific time and location. It has the potential to eliminate intermediaries, create a healthy agriculture market based on local conditions – and boost the farming sector of an entire country.
Is digitisation sufficient without the presence of strong local industries?
Startups and other young companies are creating enormous opportunities for employment. Actually, they provide around 50% of all jobs created. Digital entrepreneurs and innovators have the capacity to turn weaker sectors with growth potential into stronger ones. Therefore, the best investment that Europe and Africa can make is in their digital entrepreneurs.
At the EU-Africa Business Forum held recently in Abidjan, we invited 100 European and African startups to showcase their technologies and services. They have created a network and are sharing ideas about how best to work together. And their message was very clear: the internet does not recognise borders. Therefore, African startups have an EU market to sell their products to while EU startups have a growing digital market in Africa.
Is the success of companies such as M-Pesa feeding the emergence of dynamic digital economies in Africa?
M-Pesa is by now the most successful mobile-phone-based financial service in the developing world. It was launched in Kenya in 2007 and is now available in 10 countries – mostly in Africa but also in Albania and Romania. It is a great example of how digital technology can help people. M-Pesa provided a service that people needed. It was useful and innovative. It solved problems. It lifted 2% of Kenyans out of extreme poverty and it brought financial inclusion to the whole country.
Europe can learn a lot from the African experience. In fact, when it comes to digitisation, our two continents face many of the same challenges and barriers. We both have a need for widespread access to connectivity, to get more people online, teach more digital skills and to support tech startups as they seek investment to scale up. In Europe, we recognise the impact of digital technologies and services in all countries, societies and economies. That is why we made digital an integral part of the EU’s development policy – to help create employment and stimulate growth.
But the technological gap is still so big in Africa…
I am a firm believer in using technology to promote sustainable development, reduce socio-economic inequalities, give everyone access to digital opportunities. Supporting entrepreneurs and digital innovation will help to solve local problems, generate growth and jobs and build digital economies. This is how Europe’s DSM can assist – by creating cooperation opportunities between entrepreneurs from Africa and the EU.
Futhermore, the use of digital technologies and services across sectors can be a further push towards sustainable development. It increases accountability, transparency, governance and helps empower women. It assists management of vital resources like water, food and energy.
In other words, one can turn digital into the “norm” across all areas. It is about integrating digital technologies and services everywhere – all based on the premise that people should be able to go online via a quality, affordable and reliable connection. Digital should be a given for everyone. In Africa, in Europe, no matter where…
One of Africa’s biggest needs is access to affordable and secure broadband…
It is true, but in recent years, international connections have become cheaper in most African countries thanks to new submarine cables and internet exchange points. However, landlocked countries are still lagging behind, disadvantaged due to a lack of basic cross-border infrastructure – and the European Commission is now looking at projects to help remedy this situation.
Africa’s regulatory and fiscal instability affects broadband prices as well as investments in connectivity. Telecoms operators are regarded as a constant source of revenue for the public budget. While this can solve some short-term issues, it also has a significant long-term impact on investments in networks. This is why governments should provide a long-term political commitment to create an appropriate environment to facilitate the hefty investments required. At the same time, operators should commit to investing and guaranteeing the quality of connections.
Another important need is to promote regulatory environments geared towards competition and protection of end-users’ rights. How can the EU help?
We are constantly engaging with the African Union Commission to support Africa in creating such an “enabling environment” for the digital economy. While previous projects used to focus on enacting telecom regulations, we are now negotiating a new project whose main aim will be to support more efficient spectrum management that will have a direct impact on the mobile internet. Reducing broadband prices in Africa will depend a great deal on the commitment of political leaders to improve the business climate and apply regulations that give confidence to investors.
What European good practices could Africa adapt to promote digital skills?
In many African countries, more than half the population is aged under 20. And the world’s youngest population is growing fast: the IMF says that by 2035, sub-Saharan Africa will have more working-age people than the rest of the world’s regions combined. This young growing population is maybe Africa’s greatest asset. Investing in youth is essential anywhere, in Europe as well as in Africa. In the 21st century, digital skills should be enshrined in national educational systems. But governments cannot always cope with doing this on their own; they need to join forces with the business community. Africa is already home to several successful projects that are based on a public-private partnership model.
Digital skills are at the heart of the EU’s Digital4Development initiative. And, for several years now, we have promoted the Digital Skills and Jobs Coalition: this is where the European Commission works with a large number of associations, companies and organisations to bridge the digital knowledge divide and better prepare the EU workforce with the right digital skills in order to get jobs. The same model can be applied to Africa. In Abidjan, during the EU-Africa Business Forum, I saw for myself the willingness of business leaders to engage on this issue.
How is the EU’s external investment plan supporting digital entrepreneurship in Africa?
In Africa, digital entrepreneurship is on the rise. The tech startup landscape is increasingly active, with some 310 active tech hubs across the continent. The range of startups funded in recent years and the size of deals reflect its accelerating development and potential. Young digital entrepreneurs are not only creating jobs, they are innovating to tackle long-standing socio-economic problems and develop answers that help people in their daily lives. Take the huge degree of financial inclusion that mobile payment systems have created in Africa.
The European Union has launched an external investment plan that addresses many issues relevant to Africa. Under the “digital investment window“ it aims to reduce investor risk in areas such as broadband connectivity, e-services and digital mobile payments; it will also increase money available for venture capital and angel investors. This is not only scale-up money, but also seed money for early starters with difficulties securing financing. We create business opportunities by creating a platform of cooperation. I strongly believe that cooperation will lead to services with a strong social impact across all sectors of the economy and society. That can only be a good thing.