Towards a new EU-African partnership: Part 2, The Digital transition

Written by Daniel Costa in Brussels and Boipelo Mogamisi in Johannesburg

The EU-Africa relationship has had its challenges over the years. Concerns around fair trade, migration and the paternalistic nature of the association have at times eroded trust and cooperation between the regions.

Acknowledging this and looking to turn a new page, a new strategy framework has been proposed by the EU –one based on a clear understanding of the mutual interests and responsibilities of both trading partners. This new partnership is expected to be finalised at the 6th European-African Summit pencilled in for later this year. The agreement is seen as a pivotal step in addressing the many imbalances that have plagued the relationship since its onset and positions the two blocs as equal partners in the quest for a more just and equal world.

To strengthen the EU’s alliance with Africa and develop a closer partnership, in March 2020 the European Commission proposed a new Strategy with Africa. Its ratification by the European Parliament, though delayed by the pandemic, has just occurred.

As the Strategy is vast, we believe there is value in breaking down key elements in a series of analyses, while exploring how Africa would view the proposed developments. This one focuses on the digital transition.

Europe pushes to bridge the digital divide in Africa

If fighting and reversing climate change comes first in terms of EU policy, boosting technological advances and digitalisation comes right after. In April, the EU Commission proposed new rules and actions for excellence and trust in Artificial Intelligence, a combination of the first-ever legal framework on AI and a coordinated plan with EU Member States to safeguard the fundamental rights of people and business. The European Commission knows that its push will have to be accompanied by a global drive towards digitalisation for mutual benefits. In this context, it is no surprise that accelerating Africa’s digitalisation was a crucial part of the EU Africa Strategy.

For the EU, digitalisation can drive Africa’s growth across multiple sectors via digital financial services, as it is currently estimated that a 10% digital coverage in Africa would increase its economic output by more than 1%. This of course would require substantial investments in infrastructure, although this should not be the sole focus of policy. Africa also needs a competitive and harmonised regulatory framework to harness the potential of digitalisation while also protecting its people. Regulation in areas such as data and consumer protection, digital financial services, cybercrime and e-governance is especially needed. Regulation would also deter and curb cybercrime and threats to democracy and human rights as well as terrorism. The Strategy underscores the need for further cooperation between the two continents in this area and that the EU will continue to share its best practices with its African partners.

Furthermore, the EU Strategy highlights that Africa requires a single digital market and a new digital transformation strategy to strengthen the links among African nations. It is in the Commission’s belief that such policies would boost African digital entrepreneurship and innovation, creating jobs for the 15 million-20 million Africans who enter the job market each year. To help such innovation, the EU believes that the open and free data provided by the EU Space programmes can boost a nascent private African space sector, enabling start-ups and SMEs to develop local, innovative solutions and services. The EU believes that such developments will help to modernise traditional sectors such as agriculture, while also increasing public revenue. Boosting African e-Commerce and access to digital financial services was also mentioned in the Strategy.

The Strategy further underlined that capacity building in the public sector is important to support the broader digital transformation agenda. The digitalisation of public administration can transform the delivery of public services in Africa, from education to healthcare, increasing governmental efficiency while boosting trust in government due to reductions in corruption. Digitalisation cannot only be done through a boost in infrastructure. Regulation and governmental capacity building are also needed to allow it to work well. But one thing that the Strategy did not highlight is the use of digitalisation as a tool for progress, inclusion, and development. This additional point was stressed by the European Parliament in its ratification. The EU surely needs to engage with Africa in areas in which digitalisation can boost Africans’ well-being, in areas such as health, education, and the green transition. Still, one needs to consider the many other issues that Africa faces to see if this plan deserves to be made a priority and would actually be achievable.

Africa’s vision

It has become evident that globally, the digital economy is a driver for inclusive growth, job creation and sustainable development. Emerging markets such as the African continent should be prioritised since the digital divide is the greatest there. The EU is partisan in the development needed to accelerate Africa’s digital economy by providing cost-effective solutions to the ongoing growth challenges experienced within the continent.

The EU commission Staff Working Document titled Digital4Development (D4D) compiled in Brussels in 2017 looks at mainstreaming digital technologies and services into EU development policy. The document reiterates that digitalisation is a global priority and underlines the added value of mainstreaming digital aspects to the entire range of development policies and actions.

Digital transformation is changing the way businesses operate throughout the world. AI, machine learning and predictive analytics have already had a profound impact on the world’s economies and continue to disrupt industries. Digitisation spurs the development of new industries such as e-commerce, mobile financial services, IoT and cloud computing. These contribute to national GDP in multiple ways, while also promoting growth of industries such as logistics, infrastructure and payments.

Obstacles need to be removed in order for these industries to reap the rewards of digital transformation. Experienced network engineers are a conduit to realising the benefits that emerge as a result of a digitised economy. Without these engineers, national Internet investment, policy and regulatory decisions may lack the technical foundation that would ensure an open, affordable, scalable Internet.

Winning in the digital economy requires a combination of technical understanding, pioneering leadership and a sense of vision and determination to encourage an ecosystem of innovation. Leaders within the EU and AU who engage with these possibilities today could be reshaping the economy of 2030 for the greater good.

Next: EU-Africa partnership needed for sustainable investments

If you have any queries, don’t hesitate to contact us at daniel.costa@Instinctif.com or at boipelo.mogamisi@instinctif.com.