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The COVID-19 pandemic has highlighted the importance of digital infrastructure for Africa’s economic and social development. Digital infrastructure, such as broadband networks, data centers, cloud services, and digital platforms, enable access to information, education, health, finance, trade, and government services and support innovation, entrepreneurship, and job creation. However, Africa lags behind the rest of the world in digital infrastructure development and investment. According to the World Bank, African countries spend about 1.1 percent of GDP on digital investment, while advanced economies spend an average of 3.2 percent. This digital divide threatens to widen further if business as usual continues.

To bridge this gap, Africa needs to invest more in digital infrastructure and create an enabling and trusted environment for its development and deployment. However, this is not an easy task. Digital infrastructure in Africa depends on other infrastructure, such as energy and internet access, which are also lacking or unreliable in many parts of the continent. It also requires large-scale or scalable projects that can generate economies of scale and network effects, which are scarce in Africa, especially those with a regional integration purpose as regional public goods. Moreover, it needs a sound and coherent policy framework that can facilitate and incentivize investment, while also protecting African citizens, businesses, governments and economies from potential risks and harms. However, many African countries lack adequate digital policies or regulations that can address these issues effectively. Furthermore, Africa’s digital infrastructure priorities and agenda are not clearly and coherently articulated by the African Union (AU) and its member states.

These challenges call for a more concerted and collaborative effort by Africa and its partners to support the development and deployment of digital infrastructure in the continent. Among these partners, Europe has a unique role to play as a long-standing ally and a major investor in Africa’s development.

African digital infrastructure investment needs

Africa faces a huge infrastructure gap that hampers its economic and social development. According to the Global Infrastructure Hub, the continent needs $1.7 trillion of investment in infrastructure by 2040, out of a global total of $15 trillion. Poor infrastructure in Africa costs as much as two percent of economic growth annually, according to the World Bank.

One of the most critical areas of infrastructure is digital connectivity, which enables access to information, services, trade, and innovation. As of 2021, only 15% of rural citizens and 50% of urban citizens on the continent used the internet. The situation varies widely across countries, depending on their size, stability, and innovation culture. Moreover, internet usage is significantly lower for women than men across the continent.

Increasing funding for last-mile connectivity that reaches remote and underserved areas is essential for achieving a digitally integrated continent by 2030, as envisioned by the African Union (AU) in its Digital Transformation Strategy (DTS) for Africa (2020-2030). The DTS outlines a vision and a roadmap for leveraging digital technologies to foster inclusive and sustainable development in Africa.

To support the implementation of the DTS, the AU Commission (AUC) has launched several initiatives that seek to enhance investment in regional and continental digital infrastructure, such as ICT, transport, and energy infrastructure. One of these initiatives is the Programme for Infrastructure Development in Africa (PIDA), which is a long-lasting initiative that supports the development of regional and continental infrastructure projects that are aligned with the AU’s Agenda 2063 and the Sustainable Development Goals (SDGs). It also includes Africa50 which uses equity investment to catalyze public and private finance; and investments via the Africa Finance Corporation, a multilateral financial institution investing in infrastructure.

According to the 2022 Infrastructure Consortium for Africa (ICA) report, financial commitments to Africa’s ICT sector have increased since 2018, reaching $11.4bn in 2019 and $10.4bn in 2020. The private sector contributed the largest share (63%), which is a positive sign of its interest and potential in the sector. However, given the huge infrastructure gap, more is needed to spur private-sector investment in digital infrastructure.

Africa’s digital transformation depends on enhanced investment in digital infrastructure that is sustainable, inclusive, and beneficial for its citizens, businesses, governments, and economies. This requires not only more resources but also better policies, regulations, coordination, and communication among stakeholders at the national, regional, and continental levels.

European initiatives to support sustainable connectivity in Africa

The EU has recently launched two initiatives that aim to strengthen its partnership with Africa on sustainable connectivity: the Global Gateway and the Team Europe initiative on digital connectivity. The Global Gateway is a comprehensive strategy that seeks to mobilize public and private resources to support quality infrastructure projects in partner countries that are aligned with their development priorities and adhere to high standards of sustainability, transparency, and inclusiveness. The Team Europe initiative is a joint approach that brings together the EU and its member states’ strategies under one brand and offers a coordinated package of support for partner countries’ development goals.

These initiatives offer an opportunity for the EU to better compete with other actors, particularly China, which has a dominant presence in Africa’s digital infrastructure. According to some reports, China has built seventy percent of Africa’s 4G infrastructure and has been actively promoting its Digital Silk Road initiative as part of its Belt and Road Initiative. The EU can leverage its human-centric approach and its policy successes in areas such as data protection and privacy to offer a more attractive alternative that respects African sovereignty and values. However, the EU needs to act quickly, make processes less onerous, develop project financing packages more quickly, and use more instruments to crowd in resources through guarantees and other mechanisms.

The EU also needs to better communicate and coordinate its initiatives among its own actors and with African counterparts, as well as back them up with sufficient political buy-in. There is often a disconnect between “Team Europe” and what individual European countries are perceived to be doing in individual African countries. There is also often a lack of clarity and consistency on what the EU’s objectives and principles are in supporting Africa’s digital agenda. This can create confusion and mistrust among African stakeholders, who may question the EU’s motives and intentions.

How to deepen collaboration and ensure balance

Africa and Europe have a common interest and a shared responsibility in supporting the development and deployment of digital infrastructure in Africa. Digital infrastructure is key for Africa’s economic transformation and regional integration, as well as for Europe’s strategic interests and values in the continent. However, digital infrastructure faces several challenges in Africa, such as the lack of resources, policies, coordination, and communication.

To overcome these challenges and leverage the opportunities offered by digital innovation, Africa and Europe need to deepen their collaboration and ensure a balanced partnership for digital infrastructure. This requires working together more effectively to learn lessons and fill policy gaps that will incentivize sustainable and beneficial digital infrastructure. It also requires accelerating and scaling up investment in digital infrastructure, especially in cross-border projects that can serve as regional public goods. Moreover, it requires engaging more with civil society organizations (CSOs) and academia in the policy discussion around the deployment of digital infrastructure in Africa, as they can provide valuable insights and perspectives that are often missing from the global north.

By working together more closely and effectively, Africa and Europe can build a balanced partnership for digital infrastructure that can benefit both sides and contribute to global public goods.

To learn more about the opportunities for AU-EU partnerships for Africa’s digital transformation, join us for a public dialogue on digital infrastructure and a digital single market on June 7. The Dialogue on Digitalization, a part of the AU-EU Relations – Balanced Narratives initiative, seeks to inform both formal and informal dialogue between African stakeholders and the European Union. It aims to connect policy-makers and experts with practical insights and substantial input co-produced by a core group of African and European policy institutes.

 

 

Source of original article: ACET (acetforafrica.org).
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