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20 Feb 2023

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Challenges and Opportunities of the African Digital Economic Century

This article was developed with large amounts of input and support from IDCA's Bruce A. Taylor and Mehdi Paryavi. My thanks goes out to them.

The African Continent has about the same number of people as China – only it spans a geography 3.5 times larger. Africa’s 1.4 billion people are spread over a land mass equal to that of China, the United States, and Canada combined. And it encompasses 54 (or 55, if we count Western Sudan, which the UN does not yet recognize).

Yet in GDP terms, Africa equals about that of the UK and its 67 million people. Likewise the combined GDP Africa’s economy is less than 20 percent the size of China’s.

Africa vies with Asia in debates over which is the most linguistically diverse continent on Earth. Several language families and 2,000 identified languages throughout Africa defy any modern political borders.

The massive continent’s nations range in size from the Seychelles and its 100,000 or so acres spread over 115 Indian Ocean islands to Algeria and the Democratic Republic of Congo each taking in more than 900,000 square miles. Populations range from about 100,000 in the Seychelles to about 100 million and more in Congo, Ethiopia, and Egypt, and another than 200 million-plus in Nigeria.

If Africa were the only habitable continent on Earth, it would suffice as a self-contained complete world unto itself, replete withmountains and deserts, snow and ski resorts, vast tropical rainforests and ocean beaches, savannas and grasslands – and 30 percent of the world’s mineral reserves.

It is large and diverse enough to merit examination by region; North, South, East, West and Central; with several countries appropriately fitting in more than one region. IDCA Digital Universe Research does break the continent into these regions for those interested in focusing on specific countries, groups of countries, or regions.

From the higher level view, our has included 38 of Africa’s nations in its inaugural EESG (Economy, Environment, Social, Governance) Digital Readiness of Nations Index, encompassing 90 percent of its population and economy. The giant continent has a wider range of overall scores than any other continent, and a wider range of research indexing scores in the areas of “economy” and “environment.”

Africa lands one country in the world’s Top 25 of balanced Index scoring, Rwanda, and four others in the Top 50 (all of which finish ahead of the United States – again in an equitable balance of scoring): Ethiopia, Namibia, Kenya, and Uganda. Seven of the lowest 10 overall scores among the 147 UN-member nations in the entire index are also located in Africa, including Nigeria.

Where Things Stand
A school of thought referred to as The African Century began at the dawn of the 21st Century, with some roots haven taken ahold among members of the George W. Bush administration in the US. (We have chosen to rename this time period as the African Digital-Economic Century, as its countries enter the field of nations as undeveloped, therefore with fewer barriers to becoming “digital-first” economies.

What will it take for Africa, as a whole, to become a global digital economic leader? Let’s start with things as they stand:

* Africa’s total powergrid generates more than 900,000 gigawatt-hours of electricity per year, about the same as Japan. South Africa alone produces 25-30 percent of that total (and based on recent history, very poorly, at that.)

* Twenty-one of the 38 African nations under purview of IDCA-SmartNationsResearch generate less than five percent electricity per person of the EU average.

* Africa’s nation-by-nation renewable electric powergrids run from 0.1 percent of total production to almost 100 percent. About 15 percentof Africa’s currenttransmission and distribution grid power comes from renewable resources.

* Almost all African nations remain in the two lowest income tiers used by our research: Least-Developed Countries (LDC) and Frontier Markets. All except South Africa are in these tiers among the 38 countries IDCA Research surveys.

* Africa’s undeveloped electricity grid and low income levels mean that the continent as a whole produces quite a low level of carbonand other GHG emissions. Per-person emissions levels are only 14 percent of China’s and 7 percent of the US.

* The flip side of emissions is that Africa is only 20 percent as efficient as the EU in producing emissions relative to the size of its combined economies, 40 percent as efficient as the US, and quite nearly as poorly performing as China.

How the EESG Index is Formulated
The Index integrates four broad areas: Economy, Environment, Social, and Governance.

The Index’s Economy category focuses on how well a nation’s Digital Infrastructure (Internet access and bandwidth, mobility, cloud server and network fabric) has been developed given its income level within the Economy score.

High scores in this category may be a result of a very low income level, if a country has developed digital services above what would normally correlate with the income level. A lower score can come from a wealthier country that has not been as aggressive as its economic peers in developing digital infrastructure. Internet access and speed, mobile service, and data center capacity and performance capability are all factors here.

The Index puts a premium on GHG emissions in the Environment component. A large national carbon footprint will tend to lower a country’s score, particularly if its Economy, Social, and Governance components are not strong enough to address GHG sufficiently.

A web of factors are weighed into the Index’s Social and Governance components, including income disparity, health and educational environments, physical infrastructure, environmental factors outside of GHG emissions, stability and corruption.

The Index uses a unique process that integrates numerous factors in each category from information that is all available openly and publicly. Well-trusted sources include the World Bank, agencies of the United Nations and the US Bureau of Statistics, the International Telecommunications Union, Transparency International, as well as others.

The factors are woven together into a real-world fabric against optimal benchmarks, rather than arbitrarily and simplistically weighted, as is found in most traditional indexes and rankings. Data is normalized, and expressed along a curve as natural logs.

A chart of Africa’s nLog scores shows the range of progress among the 38 nations under purview, as well as how continued progress becomes ever more difficult as things improve:

Second-Level Analysis of Scores
Data then goes through linear transformations to be expressed on a 0-10 and 0-100 scales as well. Then we can conduct a second-level analysis of overall scores, to see what they truly mean for any single country.

A high score may come from a wealthy country that has developed its digital infrastructure aggressively, has a strong commitment to renewable energy, and has the social structures and policy and governance to make continued progress. Several Scandinavian and Nordic countries provide examples of this type.

A high score may also come from a developing nation that does not have enough industrial capacity or consumer wealth to generate much of a carbon footprint, but has developed a relatively strong digital infrastructure. Costa Rica and Rwanda provide examples of this type.

A lower score may come from a nation with either middling income or a large economy that is not controlling its carbon footprint well, and doesn’t have enough strength in the Economy, Social, and Government factors to move the needle significantly without a fresh approach. Russia and Nigeria provide examples here.

A lower score may also come from a developing nation with low personal wealth combined with a digital infrastructure ripe for development and social structures and government ripe for improvement. Cameroon and Bangladesh provide examples here.

The large group of middling scores show countries with certain strengths (say, in the Economy) and insufficiencies (say, in addressing a large carbon footprint or middling social and government scores). The US, Brazil, and Ghana provide examples of this type.

The overall score can thus point out strengths and weaknesses, but also silver linings within seemingly dark clouds. The rankings are not meant to be a competition. A country that finds itself quite low in the rankings may present enormous opportunities for development. With hundreds of parameters integrated into the categories and overall scores, a deeper analysis of the data can involve many thousands of potential correlations and comparisons.

Government’s Controversial Role
The rankings do not take into consideration the type of government a nation has, other than how effective it is socioeconomically. Thus, flawed-democracy Singapore and authoritarian, Communist-run Vietnam score higher than most of their more-democratic neighbors in South and Southeast Asia. (On the other hand, no full democracy finishes worse than 35th in the rankings, and each one of the 20 lowest-ranked nations are considered to have semi- or fully authoritarian regimes.)

The agnostic approach to government structure, per se, creates strong reactions. Rwanda, for example, finishes at the top of Africa’s rankings and in the world’s Top 25, but its leader Paul Kagame is among the most controversial figures in the world. Many people and their organizations will also have strong and even non-negotiable opinions about doing business in a Communist country, or one that has high levels of corruption, or does not support equal rights for all individuals, has a poor environmental record, and many other specific considerations.

The EESG Index measures the effects of a country’s government over time as integrated into each of the four EESG components. It is to be used to start discussions and engagements through the data, and to not influence opinions. If enough people or organizations refuse to do business in a certain country to the overall detriment of the country, the effect will show up in the data.

The pariah state North Korea, which does not engage with the world and for which there is insufficient data to include it in the ranking, provides an extreme example of this phenomenon.

Authoritarian China provides a counter-example; its environmental challenges and low social and governance scores mean the country does not score well in the rankings, yet its economy continues to grow and is fully engaged with the world.

What the Index Means for Jobs and the Future
Separate calculations that use the Index as a foundation can determine expected versus ideal levels of employment within the skilled work of the ICT sector – whether developing, using, or managing ICT. The data shows that Africa needs to develop 27 million jobs across all sectors and levels of ICT to achieve its economic potential.

Africa is not unique in needing to create new ICT jobs. At the moment, there are only 29 nations in the world with adequate job levels in their ICT sectors, according to this research. The 118 nations with deficits need to create about 125 million total new jobs, as, globally, all economies continue the 4th Industrial Revolution transition. And that is before we factor in the explosive demand driven by AI, Web3, Blockchain, NFT, Cryptocurrency, Mobility, AR, VR and XR immersive experience media. The composition, distribution, functions, organizational context, and pay rates of these jobs requires digging into specific details within each country, its states/provinces, cities, towns, regions and people.

In summary, the EESG Digital Readiness Index of Nations tells you what you already knew – Africa is underdeveloped but ready to achieve its potential and destiny this century.

It also tells you what you may not have already known: Why each nation has arrived at its unique situation and condition today – and what now needs to be accomplished for nations to not be left out of the global digital economic transformation now ready to accelerate at an even quicker pace.The Index finds many bright spots, unanticipatedstrengths, and specific areas of considerable opportunity.

The Index and its data serve as a tool to achieve improvements in digitalization and its enabling and empowering digital infrastructure, progress in socioeconomic development and better live for the people of all nations.

Photograph of Nairobi, Kenya.

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