By Annie Babelle Odounlami
The International Monetary Fund, IMF, has stated that the fast rate at which digitalisation is growing in Sub-Saharan Africa could impact economies and people’s lives and create 20 million jobs yearly for the ne, the two decades, given that countries across the region grapple with the unprecedented health and socio-economic fallout of the COVID-19 pandemic.
The information is contained in a report titled “digitalisation in Sub-Saharan Africa” published by the financial institution Tuesday, June 23, 2020, highlighting the impacts of digitalisation on economic performances, macro-economic policies amongst others.
According to the IMF, “all policy levers are being deployed to protect lives and livelihoods. Digital solutions have helped to provide more resilience and allowed for rapid, flexible and inclusive policy responses to the pandemic.”
To this, the organisation added that the diffusion of digital technologies and knowledge will go a long way to create new job opportunities geared towards enhancing progress and inclusion – greater resilience and efficiency, more access to global markets, improve public service delivery, increased transparency and accountability inclusive.
Also, the impact of digitalisation will highly vary amongst nations, economies and occupations, as they called on policymakers to play their respective roles of shaping the latter’s effects, mitigate the potential costs of transition given that digitalisation doesn’t occur on its own.
“Countries and policymakers need to adopt this new environment. Crisis and development strategies should aim to nurture emerging digital economies where feasible. In Sub-Saharan Africa, there is a pressing need to provide health and economic support to address the immediate crisis,” IMF said while stressing that the creation of 20 million jobs yearly over the next two decades will help absorb the region’s young and growing workforce which is pressing than ever before.
The International Monetary Fund asserted that Sub-Saharan Africa is significantly closing the digital gap with the rest of the world because Internet penetrator is swiftly expanding in the region especially via mobile connectivity. Though Cape Verde, Ghana, Rwanda and the Seychelles are leaders in their income group, the IMF holds that there still exist a vast dichotomy as rural areas are less connected as well as the gender gap keeps widening in the said region.
That is, just 23%of women have access to the internet compared to about 34 percent of men, thus, presenting a regional gendarmerie gap of 33% in 2019. However, the figures are correct sidereal to have increased compared to 21 percent in 2013 which is much larger than the global features gap of 17%.
With respects to its impacts on macro-economic tools and the transmission of those policies to the economy, the delivery of cash transfer via mobile money to provide instant and the much needed assistance to those affected by the COVID-19 pandemic affects positively macro-economic policies.
“Yet, the adoption of digital fiscal tools is still in its early stages and offers significant upside potential through higher revenues, more efficient public spending, improved public financial management as well as greater transparency. In contrast, digitalisation is already well advanced in the financial sector, where some Sub-Saharan African countries are global leaders in mobile money transaction,” IMF added.
Moreover, digital connectivity and internet penetration has been growing at a noticeable rate in Sub-Saharan Africa since the 2000s though there still exists a considerable gap with the rest of the world, IMF asserted. So, lower costs of doing business, higher urbanisation and financial access are also related to greater digital connectivity.
Besides, leveling the fields for female entrepreneurship is particularly important among the business environment factors linked to higher levels of digitalisation as portrayed by Alpher and Miktus graph showing how countries digital connectivity vary by their levels of income.
Going by IMF, digitalisation can have a significant effect on production, employment and growth. And, an aggrandised digital connection will foster production specialisation and economies of scale, thereby exuberant ingredients productivity and growth simultaneously. Moreover, the latter “has provided more resilience by enabling forms and workers to maintain some operations through the COVID-19 pandemic.”
“Digitalisation has provided additional al tools to respond to the COVID-19 pandemic. Digital platforms have enabled the rapid deployment of social protection programmes and enabled some essential government services to continue to operate,” IMF avowed, while stating that, digitalisation could support better policy design, improve public sector accountability, support financial inclusion and deepening. Even though the oscillating nature of economic and financial transactions can complicate policy making, thereby giving room for more uncertainties and risks.
In the meantime, considering the highly hailed progress in digitalisation in Sub-Saharan Africa, the International Monetary Fund however deciphered some weaknesses that will hamper the smooth success of the latter. These vary from the risk of losing traditional jobs to the need to revisit policy design, cyber security and data privacy concerns among other worries.