Digital transformation in Africa: three lessons from India's experience

26 July 2018
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Young women look at their cellphone during a community meeting. Aurangabad, India, 2009. Photo: © Simone D. McCourtie / World Bank. CC BY-NC-ND 2.0.

Delegates from Brazil, Russia, India, China and South Africa are in Johannesburg this week for the 10th BRICS summit. The theme – ‘BRICS in Africa: collaboration for inclusive growth and shared prosperity in the fourth industrial revolution’ – suggests a big focus on what these five countries can do to support digital transformation in Africa.

Among the BRICS economies, India ranks lowest on information and communications technology development, with a score comparable to that of Africa on average. Despite obvious differences, African economies and India have faced many similar challenges to digital transformation: low internet connectivity; the digital divide; a skills-mismatch.

However, India has successfully launched many unique digital initiatives in the last few years. So what lessons can African countries learn from India’s experience?

1. Develop a national digital identification system

Having a digital identity is the very basis of functioning in a digital economy. It is a key enabler of access to government benefits, cross-border authentication, digital payments and e-commerce growth.

India has the world’s largest digital identification programme – ‘Aadhar’, literally meaning ‘foundation’. Launched less than a decade ago, it already has over a billion Indian residents enrolled and uses cloud technology to allocate a unique 12-digit identification number to each person based on their demographic and biometric information. It is emerging as an important platform for linking individuals’ banking transactions, utility bills, telephone number and physical address.  

The best comparable example within Africa is the Ghana Card, aiming to rapidly deliver public services to Ghanaian citizens. It’s still in its pilot phase, with over 500 people receiving their Ghana Card last month. But its coverage is limited – there aren’t enough enrolment and printing centres, and distribution is limited mainly to Greater Accra. A second big challenge is dealing with the enormous amount of data generated; here too, it could learn from Aadhar’s use of cloud technology for data management.  

The Aadhar card has however suffered from its own issues around data privacy, information leaks and data storage. To avoid similar pitfalls, African governments should address data security issues before implementing their national identification schemes. They can do this by introducing virtual IDs that add an extra data security layer (what India is doing now), automating security procedures, giving privacy and security training to employees in data-related activities, and putting plans in place for responding to data breaches.

2. Invest in building – and sharing – digital infrastructure

Several large-scale initiatives have developing India’s digital infrastructure at their core. The ‘Digital India’ programme, for example, has brought internet connectivity to 250,000 gram panchayats (village councils) in rural India by laying optical fibres across the country.

But this isn’t the only way to improve internet penetration and bridge the digital divide.

Recently, the government also granted a Unified License for Mobile Virtual Network Operators (MVNOs). Unlike mobile network operators (MNOs), MVNOs do not have their own infrastructure; instead they ‘share infrastructure’ with established telecom providers who have excess network capacity. Each MVNO then sells services, such as data for internet, at its own price.

As firms compete for market share, the cost of internet can fall, which would be particularly useful in African countries where the telecom market is more monopolistic.

Kenya has already granted MVNO licenses to three companies offering mobile money and data services. As a result, we have seen an 8.2% increase in internet subscriptions in the first three months of this year. Other African countries that grant licenses for MVNOs should see similarly significant improvements in internet costs and access.

3. Take a targeted approach towards skills development

The evidence shows that sub-Saharan African economies reap lower benefits from digitalisation compared to other countries, probably because their workforces don’t have as many of the relevant skills. India’s experience suggests that Africa needs to develop a targeted approach to skills development, where policies encourage innovation and entrepreneurship to meet local demand.

In 2015, India set up the National Skill Development Policy to provide an overall framework for all skills-related activities within the country, to link them with skill-demand centres and to align them with common standards. A key aim is to improve attitudes to technical and vocational educational training (TVET) through awareness campaigns and introductory certificates in education. Similar policies will be useful in Africa where there is a very low demand for TVET. 

India has also set up schemes providing easy access to information on the demand and supply of skills in a particular sector or location; promoting industry-academia collaboration; and boosting tertiary education with a focus on science, technology, engineering and mathematics. It is now developing a National Skills Qualification Framework, which is expected to allow easier transition from the non-formal to the organised job market through recognising and certifying prior learning. Short term training will also be provided for people who are unemployed or have dropped out of school or college.

These kinds of schemes are particularly useful in Africa, where the skills gap is a huge barrier to employability – as high as 41% of firms in Tanzania identify inadequately skilled workforces as a major constraint to operations. African economies looking ahead to a ‘youth bulge’ could benefit from implementing similar skills development programmes to help make their young people more employable.