New Voices in Africa - Covid-19 As a Catalyst for Digital Transformation

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Enterprise Segment Manager at African Digital Networks

After a focus on the power sector in the first chapter of this series which looks at the impact of Covid-19 across the African continent, we now turn to the digital sector. Whether as a tool to fight the spread of the virus, or as a means to ensure continuity in business, education, and everyday life in the midst of lockdown, information and communication technologies have been at the forefront worldwide since the beginning of the crisis. The African continent is no exception, but still suffers an important "digital divide", with only 28% of the population using the Internet, according to a 2019 report by the International Telecommunication Union (ITU). For Tatianna Lukama, Enterprise Segment Manager at African Digital Networks in the Democratic Republic of Congo - a Liquid Telecom Group subsidiary that owns the largest Pan-African Fibre Network in Sub-Saharan Africa, and 2019 French-African Young Leader, Covid-19 has contributed to revealing a new reality to which the African continent as a whole will need to adapt.

The Covid-19 pandemic still continues to have unfavourable effects on the African continent, from which the Democratic Republic of Congo (DRC) has not been spared. A full report on the impact of the pandemic may be too early to draw up. As per various World Bank reports, beyond its impact on the health sphere, the pandemic is also already having severe socioeconomic consequences. In addition, the World Bank report on the economic outlook during the Covid-19 pandemic states that the virus is expected to trigger an economic recession in the DRC of -2.2% of the GDP in 2020, stemming from weaker exports caused by the global economic downturn.

Zoom, Google, Amazon and Microsoft are at the top of the niche in the digital space, but to bring it back home, digital payments, once a convenience, have become a necessity.

The pandemic has revealed the increasing importance of digital technology worldwide to responding effectively to crises and to planning for recovery. At the same time, the crisis has the potential to accelerate the continent's digital transformation and to create decent and resilient digital jobs in Africa.

On a global front, the world has been involuntarily pushed to embrace a digital transformation program, to ensure business continuity and some resemblance of normality in personal life.

The pandemic has brought on high demand for collaboration, remote working, and video conferencing services. According to Business Insider, companies such as Zoom, Google, Amazon and Microsoft have observed a boom in their share price, with Google reporting +36.71%, Amazon +59.41%, Microsoft +39.10% and Zoom over +300%.

These companies are at the top of the niche in the digital space, but to bring it back home, digital payments, once a convenience, have become a necessity. One of the major routes for transmission of Covid-19 has been argued to be associated with hygiene and physical contact. This includes continuation of cash transactions without exercising proper hygiene. According to research from Bain & Company, the pandemic has had a material impact on the digital payments landscape. Prior to lockdown, the team predicted digital payments would account for 57% of all transactions in 2025, but this estimate has now been increased to 67%. The Central Bank of the Congo (BCC) in the DRC issued measures to encourage the use of digital platforms to transact in an effort to curb the spread of the virus. The DRC, however, remains a cash-oriented society and the financial services available in the market remain limited. In order to compensate for this, the BCC urged Mobile Money Operators (MMOs) to allow interoperability of payments through bilateral integrations with Banks.

The "Digital Divide"

Digital technology and connectivity have been vital in this pandemic by enabling the continuation of work, communication, and education through virtual engagements. However, when addressing digital technology in Africa, it is important to take into account the various challenges the industry faces, such as electricity, internet connectivity, regulations, and the ability of the population to use the digital solutions that are available.

Covid-19 has emphasized the "digital divide", which is the uneven access to Information and Communication Technologies (ICT) in societies.

Indeed, there are still internet connectivity challenges on the continent, with millions unable to connect to the internet. Covid-19 has emphasized the "digital divide", which is the uneven access to Information and Communication Technologies (ICT) in societies.

For example, the DRC’s nationwide measure, which was also adopted by many other countries worldwide, was the closure of schools. However, unlike some parts of the world with sufficient e-learning facilities, Congolese pupils and students have not had alternative means to study. A shift to e-learning was relatively easier to implement in the developed world, with ready access to both the necessary devices, connectivity, and the essential digital skills. But most learners from the developing world do not have access to digital gadgets that can connect to the internet such as computers or smartphones, and many do not have ready access to the electricity needed to operate these devices. The high cost of internet data is also a hurdle.

It is also clear that the Coronavirus has brought about two different views in terms of the digital disparity in Africa between the rich and poor, between the connected and the unconnected.

Digital Solutions to the Pandemic

Despite these challenges, the ICT Industry has grown significantly in Africa, with incubators, start-ups, and ICT activities spreading across the continent. Specifically, many young Africans have created digital solutions using various technologies to provide help for the pandemic. In the DRC, one such incubator is Kinshasa Digital Academy, which, at the request of the presidency and Ministry of Health, developed a website for raising awareness, that garnered more than 100,000 visitors.

Further initiatives by the local authorities to embrace a digital transformation during this pandemic include the creation of a Chatbot, through the coordination of Facebook with the Ministry of Health. This chatbot uses the WhatsApp platform that will assist the Covid-19 Response Advisory Board to fight against rumours and disinformation on the coronavirus pandemic.

On the African continent more generally, many African start-ups are using technology as a solution to Coronavirus. FabLab, an innovation hub in Kenya, has developed an application called Msafari, which can be used to track people on public transport. In Morocco, a Covid-19 tracking application called Wiqaytna6 was launched in June 2020. The application can be downloaded onto mobile phones and uses the Global Positioning System (GPS) and Bluetooth technologies. Once a case is found, the application, using the above technology, triangulates the person’s movements over the last 14 days. Users who have been in contact with someone who has tested positive are notified with a text message.

There is a great need for African businesses to transform digitally and embrace the advantages of e-commerce.

Digital commerce has also proven it can meet people’s needs during the pandemic. With social distancing being a requirement, many online platforms are being used to purchase and deliver products. This means that digital commerce offers a contact-reduced way of providing products and services, allowing for food security and economic resilience even when shops are closed, or movement is restricted due to lockdown measures.

Jumia, an e-commerce platform is an example of this, and in Zambia, Just Fresh Foods allows users to order fruits and vegetables online and have the products delivered straight to a customer’s doorstep.

Covid-19 As a Catalyst for More Connectivity

The Globe is increasingly going digital but much still needs to be done on the African continent to increase internet penetration. According to the International Telecommunication Union (ITU) Report published in 2019, only 28% of Africans used the internet and online shoppers are relatively still few. In the aftermath of Covid-19, there is a great need for African businesses to transform digitally and embrace the advantages of e-commerce.

Broad-based digitization is in real need of a durable evolution in the ICT sector that could potentially be brought about by the pandemic, especially in the DRC. This can be used as an effective measure to ignite and sustain economic growth, which will commence when the locals can have access to all digital infrastructure. A study by the International Telecommunications Union (ITU) found that expanding mobile broadband penetration by just 10% in Africa would equate to an increase of 2.5% in GDP per capita.

A visual demonstration of the impact of Covid-19 on the digital industry in the below graph by McKinsey shows that most sectors of African societies and economies were still lagging behind the rest of the world in digitization. The Covid-19 crisis could be the catalyst to accelerate digital transformation in sectors as diverse as financial services, retail, education, and government.

Source : https://www.mckinsey.com/featured-insights/middle-east-and-africa/reopening-and-reimagining-africa

Further evolutions in the aftermath of this global pandemic include digital skills development for the citizens of the DRC to get the most out of connectivity, which in turn will develop the digital ecosystem in the country. This can be achieved by governments integrating digital skills into the national curricula for students and extended out to businesses and community organizations. A study conducted by the United Nations Conference on Trade and Development (UNCTAD) in 2019 found that low digital skills and demand were the largest barrier to digital entrepreneurship in developing countries.

A New Normal

The world must learn to operate in the new normal. The ICT sector has numerous contributions to make to facilitate this transition. Some of the evolutions that will impact the digital industry with the shift to working from home due to collaboration tools, may drive up the need for high tech and the need for cloud computing for business. In the connectivity aspect, this might impact the demand for higher broadband consumption for consumers which may bring a boom to the industry.

With the teleworking reality, organizations need to organize for secure remote connectivity. The disruption in the work order has brought up some challenges related to secure connections as employees rarely work from centralized and more secure Local Area Networks (LANs). Companies such as Liquid Telecom anticipated the rising need for cybersecurity in Africa as an imminent threat to businesses and their end-users, as highlighted by a survey conducted in August, where IT decision makers stated that they have seen an increase in threats over the Covid-19 pandemic period.

The youth will be central to both tackling the coronavirus crisis now and rebuilding economies after the pandemic subsides.

The younger generation has harnessed the power of digital technologies. An example is an organization called Global Mama, in Ghana, that has been producing reusable masks and designed automated, contact-free, and solar-powered washing stations using locally sourced materials. The youth will be central to both tackling the coronavirus crisis now and rebuilding economies after the pandemic subsides. Technology is crucial in facilitating business continuity but will need to be supported by the right framework and related investments in infrastructure, digital skills, and online security to sustain economies.

Copyright : TONY KARUMBA / AFP