Two economists from the International Monetary Fund (IMF) have detailed how digitalization could accelerate post COVID-19 recovery in Sub-Saharan Africa, and why the continent should use the current health and economic crises to invest in technology.
Their comments followed IMF’s release on Thursday June 11, 2020, of its latest Regional Economic Outlook Report for Sub Saharan Africa.
The report was released with a video conversation between CNBC Africa’s Makeda Mahadeo and two of the economists – Mame Astou Diouf and Rasmane Ouedraogo – who co-authored the chapter on digitalization and on how connectivity impacts economic growth.
According to the two authors, as attention turns to policies for the recovery, the pandemic will likely serve to accelerate the digital transformation around the world and especially in Sub-Saharan Africa. This would only be possible with greater connectivity, they said.
Policies to enable and leverage greater connectivity would include investing in complementary infrastructure and human capital; developing legislative and regulatory frameworks; and supervisory powers to ensure consumer protection and address risks.
With lockdowns and shutdowns to prevent the spread of the deadly COVID-19, millions of Africans have been tele-working for the past few months.
And although some economies are starting to reopen, many people continue to work from home using their phones, laptops, the Internet and other tools that enable workers to carry out the same tasks while on different locations. This is likely to continue with some job even after full reopening.
Mame Astou Diouf co-authored the chapter on digitalization in Sub-Saharan Africa in the latest Economic Outlook Report for the region.
The authors acknowledged that while countries have leveraged digital solutions and policy responses, the connectivity gap between sub Saharan Africa and the rest of the world suggests that greater digital readiness could have allowed the region to do even more.
They referenced analysis conducted before the pandemic which found that a one percentage point increase in internet penetration in the region can raise per capita growth by 0.1–0.4 percentage points.
Rasmane Ouedraogo co-authored the chapter on digitalization in Sub-Saharan Africa in the latest Economic Outlook Report for the region.
There are other benefits, they wrote in their report, as “evidence suggests that digitalization can help reduce corruption, improve public sector accountability and efficiency, and support financial development.”
But, but, but, they warned, digitalization brings new risks, including cybersecurity, business continuity, as well as challenges to macro-policy making such as monetary policy transmission, changes to the tax base.