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tralac’s Daily News Selection

tralac’s Daily News Selection
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13 Sep 2019

The Third Ordinary Session of the AU’s STC on Communication and ICT starts in Addis Ababa on Monday. Profiled event document: pdf The draft digital transformation strategy for Africa (2020-2030) (1.48 MB)

Africa presents a sea of economic opportunities in virtually every sector, and the continent’s youthful population structure is an enormous opportunity in this digital era and hence the need for Africa to make digitally enabled socio-economic development a high priority. Digital Transformation is a driving force for innovative, inclusive and sustainable growth. From innovations such as for mobile money platforms to large-scale business process outsourcing developments, digitalization is creating jobs, addressing poverty, reducing inequality, facilitating the delivery of goods and services, and contributing to the achievement of Agenda 2063 and the Sustainable Development Goals. The Digital Transformation Strategy for Africa will build on the existing initiatives and frameworks such as the Policy and Regulatory Initiative for Digital Africa (PRIDA), the Programme for Infrastructure Development in Africa, the African Continental Free Trade Area, the African Union Financial Institutions, the Single African Air Transport Market, and the Free Movement of Persons to support the development of a Digital Single Market for Africa, as part of the integration priorities of the African Union. The Smart Africa Initiative has set the creation of a Digital Single Market in Africa as its strategic vision.

With the launch of the AfCFTA, the importance and relevance of digital financial services becomes primordial as it would facilitate greater intra-African trade and put in place the needed cross border payment systems in the operationalization phase of the AfCFTA. It would also facilitate the transactions involved in other financial products and services (e.g., to deposit savings or make a loan payment). Transaction data produced by digital payments can also reduce informational asymmetries between borrowers and lenders, and serve as a useful input into credit decisions. Digitalization offers new opportunities to boost the economy (through e-commerce and digital Financing), cut red tape and reduce trade costs (through e-payments, e-government and the digitalization of public services), leap frog and participate in the 4th industrialization revolution. This potential is even greater for Landlocked Developing Countries.

Specific objectives: extracts

By 2030 all our people should be digitally empowered and able to access safely and securely to at least (6 mb/s) all the time where ever they live in the continent at an affordable price of no more than (1cts usd per mb) through a smart device manufactured in the continent at the price of no more than (100 usd) to benefit from all basic e-services and content of which at least 30% is developed and hosted in Africa;

Establish and improve digital networks and services with a view to strengthening intra-Africa trade, intra-investment and capital flows and the socio-economic integration of the continent, while maintaining a relational balance with other continents in the context of networked economies (Digital economy, collaborative economy)

Entry into force of the African Union convention on Cyber Security and Personal Data Protection by 2020 and for all Members States to adopt a complete set of legislation covering e-Transactions, Data Protection and Privacy, Cybercrime and Consumer Protection;

Promote open standards and interoperability for cross-border trust framework, personal data protection and privacy;

Deliver a Massive Online Digital Skills for All program that provides basic online knowledge and security and privacy skills for 100 million African a year by 2021 and 300 million a year by 2025;

Foster the policies that create an enabling environment for productive digital trade and digital payment and clearance systems to advance opportunities for digital work, fair competition for digital businesses, and contribute to an advantageous position of Africa in the global digital economy. [Download the concept note and other documentation here]

PwC’s Africa Private Business Survey 2019: the key to private business growth in Africa is digitalisation

Between February and April 2019, PwC conducted interviews with key decision makers from 2,993 private businesses with a turnover of at least €10m in 53 countries in Europe, the Middle East and Africa. Of these, 200 private businesses from nine sub-Saharan African countries were surveyed, the results of which form the basis of this report. Entrepreneurs in Africa say they are keen to digitise their businesses and plan to invest at somewhat higher levels compared to results across EMEA (see Exhibit 4). One in four leaders plans to allocate more than 5% of overall investments in digitalisation in the next five years. In the EU, only 22% say the same, and in the Middle East that number is less than 18%.

81% of respondents in our survey of private businesses (across nine key economies on the continent, pdf) said they see digitalisation as “highly relevant” to their future, compared with 65% in the European Union. And a greater proportion in Africa say they want to allocate more than 5% of their overall planned investment into digital, compared with peers elsewhere. Further encouragement comes from our finding that, in spite of official downgrades for growth in key sub-Saharan African economies this year, private businesses are nonetheless relatively optimistic about their prospects. 83% of African private business leaders predict revenues overall will grow over the 12 months following our survey, while only 7% expect declines. [Visa’s Aida Diarra: Digital payments may hold key to African SME prosperity; The Gartner IT Symposium/Xpo takes place next week in Cape Town: a preview]

Capacity Africa 2019: Increase investments in data centres, experts tell African governments (New Times)

African countries have to invest heavily in connectivity and energy if they are to realise the full potential of the continent’s data market. That was observed Wednesday by tech entrepreneurs at the two-day Capacity Africa meeting in Kigali. Experts observed that as the continent was embracing the ever-growing digital economy, it was becoming inevitable for countries to scale up their investment if they are to benefit from the opportunities the industry was creating. Demos Kyriacou, Chief Operation Officer, Djibouti Data Centre SARL, said that if they were to make it more affordable, more investments have to go into scaling up terrestrial connectivity. He added that increasing the internal terrestrial connectivity will enable African countries to bring down the digital divide.

Basic business models for banks providing digital financial services in Africa (World Bank)

Digital financial services have progressed rapidly since the first mobile-money services in East Africa a decade ago. Their early success in Kenya and Tanzania sent telecom firms, banks, technology firms, and development institutions scrambling to launch similar services. Yet many or most of these new services found only limited success of their own. The process delivered valuable lessons to the industry, however, including insights about scale, effective engagement models, the importance of adopting new technologies and rethinking corporate cultures, and the need for new digital financial services and products. [Download this World Bank brief here]

Selected country digital policy, dynamics:

  1. Rwanda: Inside Alibaba’s undergraduate e-commerce programme for African students. China’s e-commerce giant Alibaba, on Wednesday, launched its first undergraduate cross-border e-commerce program for African students. The 22 students from Rwanda arrived in the eastern Chinese city of Hangzhou, where Alibaba is headquartered, Tuesday, the 20th anniversary of the tech giant. “You came at the right time and to the right place,” said Zeng Ming, president of Alibaba Business School with the Hangzhou Normal University, at the opening ceremony. The school is not a traditional business school, but one that focuses on the internet economy said

  2. Kenya: Mobile money payments rise on digital banking. The value of mobile money payments rose by 11.1% to hit Sh2.5 trillion in the first seven months of this year, new data from the Central Bank of Kenya shows. The increase happened even though the actual figures from month- to- month fluctuated between Sh328.2 billion and Sh368.4 billion. The total value for the seven months was Sh2.5 trillion compared to Sh2.25 trillion in July last year. In July, the value stood at Sh366.4 billion, about Sh20 billion up from June’s Sh346.8 billion. Compared to July last year, the upward change was higher at Sh34 billion, or 10.2%. [Huawei announces Kenya-focused digital skills initiative, DigiTruck, to sponsor Namibia’s 2020 annual ICT summit]

  3. South Africa’s BusinessTech FinTech conference. South Africa’s TymeBank is now one of the three fastest-growing digital banks in the world, with the bank seeing significant uptake since its official launch at the end of February 2019. This is according to Tauriq Keraan, chief executive officer at TymeBank, who was speaking at the BusinessTech FinTech conference on Wednesday. Keraan said that the bank has 735,000 customers and 325,000 active customers as of September 2019 – a significant jump from the 500,000 customers in July. He said that most of these customers signed up in either Gauteng or KZN and are over the age of 35, with a growing number (10%) depositing their salaries directly into their TymeBank accounts. [FNB’s Christoph Nieuwoudt: There’s a huge showdown happening in South Africa’s banking landscape]

  4. On financial development and economic growth in Egypt: This World Bank paper examines empirically the relationship between the development of the financial sector and economic growth in Egypt between 1980 and 2016. It draws comparisons based on critical financial indicators between Egypt and selected emerging markets and developing economies, using a new data set of financial development indexes released by the International Monetary Fund. [Mohammed Amin (senior VP Middle East, Russia, Africa, and Turkey, Dell Technologies): Why national progress is not immune to digital transformation]

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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