Digital opportunities await if Africa can overcome roadblocks

The Central African Republic (CAR) recently became only the second country after El Salvador to accept bitcoin as an official form of currency. The decision may have caused alarm at the International Monetary Fund – prompting calls for a robust regulatory framework – but is emblematic of how many African decision-makers are embracing digital opportunities and the hope for greater economic prosperity that they represent.

The deployment of cutting-edge digital technologies such as blockchain—the digital ledger system underpinning cryptocurrencies such as bitcoin— holds great promise to stimulate economic growth across Africa and to tackle pernicious challenges such as corruption. However, there remain a number of roadblocks threatening to stymy Africa’s digital revolution, from lagging infrastructure to politicized regulators. For the continent to seize the opportunities offered by the digital age, improving Internet infrastructure and governance are critical priorities.

Infrastructure lags behind ambitions

The coronavirus pandemic has kicked Africa’s digital revolution into overdrive, with current projections suggesting that improved connectivity could bring up to $180B to the continent’s economy by 2025.

Nevertheless, there is a considerable gap between the ambitious projections for Africa’s digital development and the stark realities of its limited connectivity. The CAR is a perfect example: despite the country’s forward-thinking decision to adopt bitcoin as an official currency, only 15% of its population have access to any form of internet. While the CAR is a particularly dramatic case, as a whole, Africa’s average internet penetration rate is 36%, which is far below the global average of 62.5%.

These severe connectivity gaps are, in no small measure, due to the poor state of the continent’s internet infrastructure. According to a report by the World Bank, Africa would need to receive investments in the region of $100 billion to build and maintain the core broadband network infrastructure needed to achieve universal connectivity. When considering the additional need to improve mobile connectivity, including the infrastructure to support 5G– the World Bank’s estimate seems rather conservative.

This poor infrastructure, unsurprisingly, has a number of knock-on effects, including higher prices for those people who do have access to the internet. South Africa, for instance, has relatively high penetration rates (68.2%), but this digital access comes at a cost—the average price of an internet package stands at $72.38 – amongst the most expensive in the world. 

To make matters worse, the financial burden of digital connectivity is not shared equally in many countries: indeed, broadband access has become a symbol of South Africa’s yawning wealth gap, with 7.5 million lower-income South Africans paying a staggering 80 times more to get online than their middle- and upper-income peers. Cognizant of this discrepancy’s chilling effect on economic growth, the South African government has rolled out a plan to provide free broadband to all citizens.

Awaiting governance reform

South Africa’s plan to essentially turn Internet access into a utility like water or electricity has sparked both excitement and skepticism. “If this succeeds,” the president of one South African trade association explained, “South Africa will be Africa’s first broadband welfare state. It’ll be either a massive digital leap or flop”. 

One of the biggest stumbling blocks to such widespread internet access is endemic corruption. South Africa, for example, is saddled with widespread graft and an outdated central planning system which cast doubt on its ability to extend broadband access to a wide swath of the population. Previous attempts to provide extensive internet connectivity have faltered in the face of mismanagement and equipment theft.

Even once the infrastructure itself is put into place, poor governance remains a barrier to African digital development, with key decision-making bodies mired in scandal. Just look at the case of AFRINIC, Africa’s regional internet registry (RIR) tasked with allocating and managing IP addresses. Not only has AFRINIC strayed from its limited mandate, attempting to extend its remit by threatening to arbitrarily revoke IP addresses and, with them, people’s access to the internet, but the body has become synonymous with the kind of malpractice which is hampering Africa’s digital development.

The organization’s current CEO, Eddy Kayihura, was appointed in 2019 to clean up after AFRINIC’s leadership became embroiled in everything from racially-charged outbursts to sexual harassment scandals to the embezzlement of IP addresses worth $50 million. Kayihura, however, has failed to reform the organization’s image or resolve AFRINIC’s glaring governance issues.

In the last few weeks, for instance, elections for several seats on AFRINIC’s board were blocked by an interim injunction issued over alleged procedural irregularities. The decision, which was handed down by a Mauritian court, created a power vacuum at the top of the organization after four board seats expired following the annual general member’s meeting (AGMM) late last month. Although the vacancies meant that the board lacked the necessary quorum to call meetings or approve nominations, the remaining board members nevertheless met to appoint Benjamin Eshun as Chair and Abdalla Omari as Vice-Chair. Angered by the brazen disregard for the rules, several AFRINIC members have suggested that matters may soon be headed to court. 

The fact that an organization with as much responsibility over Africa’s internet as AFRINIC is embroiled in internal power grabs rather than dealing with serious issues holding Africa’s digital development back—such as the looming shortage of IP addresses allocated to the continent—only illustrates the fact that, even if the necessary infrastructure is put in place, Africa’s digital economy will continue to fall short of its full potential until better governance is implemented.

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Progressive measures such as the CAR’s decision to allow bitcoin as a legal tender are a clear sign of how African policymakers are increasingly looking to seize digital opportunities. Before they can reap the benefits from Africa’s digital revolution, however, the groundwork needs to be thoroughly laid, both in terms of infrastructure and oversight.