Africa is far behind in Digital Economy, UN Report says

ADDIS ABEBA – Africa is considerably far behind in digital economic development, the United Nations Conference on Trade and Development (UNCTAD) said.

UNCTAD has released its first-ever Digital Economy Report 2019 that maps the flow, data and funds in the world’s digital economy on Wednesday.

The report outlines the enormous potential gains and possible development costs as more of the world moves, connects and buys online.

“Wealth creation in the digital economy is highly concentrated in the United States and China, with the rest of the world, especially countries in Africa and Latin America, trailing considerably far behind,” says the report.

The United States and China account for 75% of all patents related to blockchain technologies, 50% of global spending on the Internet of Things (IoT), more than 75% of the cloud computing market and as much as 90% percent of the market capitalization value of the world’s 70 largest digital platform companies.

Officials have called for concerted global efforts to spread the rapidly expanding digital economy’s gains to many people who currently reap little benefit from it.

“We need to respond to the desire of people in developing countries to take part in the new digital world, not just as users and consumers, but also as producers, exporters and innovators, for creating and capturing more value on their path towards inclusive prosperity,” said Mukhisa Kituyi, UNCTAD Secretary-General.

Ethiopia wants a piece of it

The report gives special attention to digital data and digital platforms, the two main drivers of value creation in the digital economy.

Taffere Tesfachew (Ph.D.), a principal adviser at Ethiopia investment commission, said Ethiopia is one of the African countries that are expected to provide digital transformation strategy.

The East African nation is currently “giving priority for the digital economy sector” to attract investors, he said, adding that, many investors asking the government to invest in the area.

“The government is working to make Ethiopia ICT hub,” said Taffere.

Apart from the strategy, the government is currently exerting its effort on alleviating the challenges that are affecting the sector.

These challenges are mainly connection and infrastructure related, he said.

The report too says governments have a critical role in shaping the digital economy by defining the rules of the game.

It also says national development strategies should also seek to promote digital upgrading (value addition) in data value chains, and to enhance domestic capacities to “refine” the data.

Global internet protocol (IP) traffic, a proxy for data flows, has seen dramatic growth. In 1992, there were about 100 gigabytes (GB) of traffic per day. By 2017 such traffic had surged to more than 45,000 GB per second.