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    Thought leadership
    31 December 2020

    Vodacom

    Enhancing Digital Infrastructure for a Better Connected Africa

    The COVID-19 pandemic has slowed global economic growth, with the World Bank predicting a 5.2% drop in GDP. What does this mean for digital infrastructure in Africa?

    2020 has been a unique year. The COVID-19 pandemic has slowed global economic growth, with the World Bank predicting a 5.2% drop in GDP. What does this mean for digital infrastructure in Africa? Kevin Zhang, the Chief Marketing Officer of ICT Infrastructure at Huawei, shares his thoughts.

    What’s the latest outlook?

    Economists have proposed different models of economic recovery: a V-shaped (where the economy recovers quickly after bottoming out, provided the pandemic is well-controlled), U-shaped (similar to a V-shaped recovery except that the recession lasts longer), and even a K-shaped model (where different sectors of the economy recover at different rates and times if the pandemic is not controlled well). We hope that the pandemic will be well-controlled in Africa and that life and work can get back to normal as soon as possible.

    In order to better control the pandemic and minimise person-to-person contact, a digital approach connects supply and demand. Shopping, office work, and education have to move online, which requires strong digital support. In Africa, we are seeing more demand for digital infrastructure than ever before. Traffic from online video conferencing has increased by 30 times, carrier network traffic has increased 15%, and in South Africa ecommerce orders per day have increased by between two and five times. However, less than 20% of students have been able to learn online.

    How have different countries responded?

    In this unique time, COVID-19 has made the value of digital infrastructure clear and a number of countries are taking action. In April, the Chinese government expanded its “new infrastructure” strategy to boost the country’s digital foundation. In March, the Thai government approved a policy for subsidised broadband. It awarded the equivalent of $320 million in subsidies to help get people’s lives and the economy back on track. Also in March, Kenya reduced mobile money handling fees to encourage economic activity.

    In 2011, in its “Broadband China” strategy, the government set out an eight-year broadband development roadmap running from 2013 to 2020. It expanded the “Broadband Strategy” from industry priority to national priority. Then, in 2018, China started planning its new infrastructure strategy. In April 2020, it began accelerating implementation. This strategy will focus on information infrastructure, converged infrastructure, and innovation infrastructure. By working with all sectors of society, China can increase its supply of the digital resources for productivity. This will bring new opportunities for traditional industries. Led by the government, China can also coordinate key stakeholders, provide policy and financial support, and build an ecosystem to develop the digital economy.

    The other case is from Thailand, where the Thai government is building a Public Private Partnership (PPP) model that encourages private enterprises to invest in digital infrastructure. Provincial governments, major operators, and top industry associations are collaborating to support the “Thailand 4.0” strategy for economic growth. Under the PPP model, the Thailand 4.0 strategy can achieve fast support from various resources. It enables stimulus benefits like favourable tax policies, fund sponsorships, and talent development. The PPP model also helps implement national strategies more quickly. As we can see from these two cases, both the Chinese and Thai governments focus on digital infrastructure as economic enablers, although the models differ in the two countries.

    Examing Africa

    Huawei’s Global Connectivity Index (GCI) report measures the maturity of national digital infrastructure and its impact on the economy. According to our 2020 report, we are happy to see that digital transformation in Africa is accelerating. Over the past five years, this digitalisation has occurred faster than the global average. The GCI score of African nations has increased by 4.8% on average, compared with the global average of 4.2%.

    Our research shows that, on average, a one-point increase in a nation’s GCI score correlates with a 2.1% increase in national competitiveness, a 2.2% increase in national innovation, and a 2.3% increase in national productivity. So it’s clear that a strong digital infrastructure drives economic growth. And even though we are facing historic challenges, I believe that by working together we can overcome them and build a better connected, digital Africa.

     

     

    Vodacom