Digital transformation plays a vital role in Africa’s progress and renaissance, and the continent needs it now more than ever. Fortunately, Africa seems to be relatively well-positioned to adopt digital solutions compared to other continents. The recent advancements in technology, including artificial intelligence, big data, the Internet of things, blockchain, 3D printing, robots, and drones, can be essential catalysts in helping Africa achieve its developmental objectives and strategic vision. 

‘African countries are ready for a comprehensive digital transformation strategy to guide a common, coordinated response to reap the benefits of the fourth industrial revolution.’ Source: The Strategy (2030)

Let us commence an exploratory journey to traverse the African continent and comprehend the present state of digital transformation. This will mark the start of a series of articles intended to elucidate the subject matter, and I encourage colleagues to contribute their own perspectives and insights. To achieve a comprehensive understanding of digital transformation, it is imperative to delve into pertinent inquiries such as which sectors, including startups and small to medium-sized enterprises, are spearheading digital transformation, how the process can be accelerated, and what initiatives have been taken by the continent’s leaders to materialize their vision. By addressing these fundamental queries, we can gain a better grasp of the current state of affairs and make projections for the future. 

Three Questions

• Which sectors are closest to digital transformation, among startups and small and medium enterprises?  
• How can digital transformation be accelerated?  
• What is the vision of the continent’s leaders? And what did they do about that vision?  

Let’s begin with the first question: It’s challenging to pinpoint which specific companies or sectors among small and medium enterprises (SMEs) are closest to digital transformation since the rate of progress varies significantly based on several factors, including access to technology, availability of funding, market competition, and adaptability to change. Nonetheless, some sectors, such as e-commerce, software development, fintech, and creative industries, tend to lead digital transformation due to the high demand for innovative digital solutions in these areas.

In emerging markets like Africa, however, the sectors closest to digital transformation among SMEs are often technology, e-commerce, financial services, and logistics. These sectors have a higher adoption of digital tools and processes, a more innovative approach to business, and a more rapid adjustment to changing market conditions. Factors like funding availability, growth of the middle class, and increased mobile technology use also boost the digital transformation of SMEs in these sectors. While other sectors not listed may also be at the forefront of digital transformation in certain areas, the following sectors are closest to adopting digital transformation:  

• E-commerce  
• Fintech  
• Telecommunications  
• Agriculture  
• Health Care  
• Logistics  
• Retail  
• Education  
• Hospitality  
• Manufacturing  

However, agriculture, education, and health care are particularly significant. Agriculture in emerging markets in Africa can benefit significantly from digital transformation through various means like using digital tools for farm management, implementing precision agriculture techniques, improving supply chain management, and utilizing e-commerce platforms for better marketing and distribution of agricultural products. Digitalization of educational materials and the use of online learning platforms can increase access to education and improve the quality of instruction. Additionally, digital tools can track student progress and provide personalized learning experiences. Adopting telemedicine and electronic health records can improve access to care and reduce healthcare costs.

The rationale for selecting these sectors is straightforward. Prioritizing digital and modern agriculture, given the vast agricultural lands, livestock, and forests in the continent, has the potential to spur a significant renaissance, boosting growth and income levels that will positively impact the overall economy. Likewise, education and health are fundamental to unlocking the continent’s human potential, particularly since 70% of its population comprises young people. If they can attain a high level of education and scientific knowledge, they will be able to apply technology effectively in various sectors, propelling the continent to become a leading producer. Additionally, the importance of good health and healthcare cannot be overstated, as it has far-reaching impacts on the socio-economic system as a whole. 

In response to the second question about how to accelerate digital transformation in Africa, the following ten important steps can be taken: 

1. Enhancing the accessibility and affordability of the internet: By improving internet infrastructure and making it more affordable and accessible, companies can utilize digital tools and services to enhance their operations and reach customers more efficiently. 

2. Developing local talent: Investing in education and training programs for employees, as well as supporting local universities to create digital programs, can help establish a pool of skilled workers for African companies to draw from. 

3. Establishing a supportive ecosystem: By collaborating with government and private sector partners, companies can create a supportive ecosystem for digital transformation. This can include creating incentives for investing in digital tools and services and establishing digital innovation hubs to bring together entrepreneurs, developers, and businesses. 

4. Encouraging investment in digital infrastructure: Private and government organizations can work together to encourage investment in digital infrastructure and services by offering tax incentives, grants, and other financial support to companies investing in digital technologies and services. 

5. Supporting entrepreneurship and innovation: Encouraging entrepreneurship and innovation in the digital space can bring new and innovative technologies and services to the market, driving growth and competitiveness for African companies. 

6. Encouraging partnerships and collaborations: Promoting partnerships and collaborations among companies, academic institutions, and other businesses can encourage innovation and the exchange of ideas and best practices. 

7. Facilitating access to digital tools and services for SMEs: By simplifying access to digital tools and services for small and medium-sized enterprises, companies can effectively grow and compete in a rapidly changing digital environment. 

8. Promoting digital literacy: Encouraging a culture of digital literacy and educating employees and customers about the advantages of digital transformation can drive adoption and encourage companies to invest in digital tools and services. 

9. Leveraging existing technologies: Utilizing existing technologies, such as cloud computing, big data analytics, and artificial intelligence, can allow companies to quickly and cost-effectively adopt digital tools and services to advance their business. 

10. Adopting a customer-centric approach: Encouraging a customer-centric approach to digital transformation can help companies better understand their customers’ needs and drive growth by creating products and services that fulfill those needs. 

Regarding the final question about the perspective and actions of African leaders in terms of digital transformation, it can be stated that African leaders envision leveraging digital technologies to promote economic growth, better governance, and enhance the quality of life for their people. To attain this objective, African leaders have launched several initiatives and strategies aimed at accelerating digital transformation across the continent. One of the significant initiatives is Agenda 2063, an African Union plan that aims to boost economic and social development across the continent through increased investment in infrastructure, including digital infrastructure.  

The African Union Commission has developed a ten-year roadmap called the African Digital Transformation Strategy (2020-2030) to accelerate digital transformation efforts in African countries. The strategy focuses on five main pillars, namely infrastructure development, digital skills and literacy, digital entrepreneurship and innovation, digital society and culture, and digital governance and collaboration. The overarching goal of the Transformation Strategy is to create a comprehensive digital economy and society in Africa that improves the quality of life of its citizens, strengthens the existing economic sector, fosters diversification and growth, and ensures Africa’s active participation in the global economy as a producer, not just a consumer. 

The strategy for digital transformation in Africa was created through the efforts of the African Information Association and the Smart Africa Council. The African Union Committee worked in partnership with various organizations to develop this strategy. The Smart Africa Initiative aims to establish a single digital market in Africa, which is consistent with the integration priorities of the African Union. The strategy recognizes the crucial role of the information and communications technology sector in leading the process and builds upon existing initiatives and frameworks such as:  

• ICT: Information and Communication Technology. 
• ECA: United Nations Economic Commission for Africa. 
• AUDA-NEPAD: African Union Development Agency. 
• ITU: International Telecommunication Union. 
• DSM: Digital Single Market. 
• PRIDA: Policy and Regulatory Initiative for Digital Africa. 
• PIDA: Programme for Infrastructure Development in Africa. 
• AfCFTA: African Continental Free Trade Area. 
• AUFIs: African Union Financial Institutions. 
• SAATM: Single African Air Transport Market. 
• FMP: Free Movement of Persons. 

The implementation and progress of the Digital Transformation Strategy for Africa are being overseen by the Digital Transformation Task Force set up by the African Union Commission. Furthermore, various African countries have formulated their own national digital strategies, highlighting specific goals and initiatives aimed at promoting digital transformation within their borders. To support these initiatives, African leaders have taken measures to attract foreign investment and partnerships, such as the Digital Africa Initiative launched by the African Development Bank. These coordinated efforts by African leaders aim to promote sustainable development and economic growth across the continent. Notably, several institutions, including the UN Economic Commission for Africa, Smart Africa, AUDA-NEPAD, Regional Economic Communities, African Development Bank, Africa Telecommunications Union, Africa Capacity Building Foundation, International Telecommunication Union, and the World Bank, were involved in this significant project.  

It’s important to mention that the United States became part of the African dream for digital transformation during the African American Summit held last December. At this summit, President Biden met with African leaders in Washington to discuss various issues, including Africa’s digital transformation strategy. As a part of this summit, the United States launched the Digital Transformation with Africa (DTA) initiative, which allocated funding to support the strategy.

In this initial article about digital transformation, we have refrained from going into too much detail and opted to provide a general overview, with the aim of encouraging everyone to join in and contribute. It is imperative that the “African Experts” consortium make this issue a top priority.