Here’s how digital transformation is shaping Africa’s development agenda

Africa's journey towards economic recovery amidst the COVID-19 crisis is increasingly leaning on digitization to drive productive transformation and align with Agenda 2063, the African Union's blueprint for development. A recent report by the OECD Development Centre and the African Union's Commission for Economic Affairs highlighted the significant expansion of digital transformation across various economic sectors on the continent. The potential of harnessing this digital shift to accelerate Africa's post-pandemic recovery was the focal point of a discussion with Mario Pezzini, Director of the OECD Development Centre, on CNBC Africa. Pezzini emphasized the crucial role of digitalization as part of a broader industrial revolution that encompasses both digital and non-digital sectors to realize the goals of Agenda 2063. While acknowledging the positive strides in digital adoption, particularly evident in the high mobile account penetration in Africa, Pezzini also underscored the need for a more robust strategy to create job opportunities for the burgeoning youth population on the continent. The report also highlighted emerging risks to financing Africa's development, indicating a decline in foreign direct investment and remittances due to the global economic downturn. As a result, African countries are facing constraints in mobilizing internal resources, impacting their capacity for public policy implementation and infrastructure development. Pezzini raised concerns about the increasing debt levels in African nations, pointing out the urgency for revising the financial systems and enhancing mechanisms for debt management. To address the challenges and leverage the opportunities presented by digital transformation, Pezzini proposed four key actions for boosting Africa's digital ecosystem. These actions include preparing the workforce for digital integration, removing regulatory barriers that hinder innovation in smaller firms, and fostering an environment conducive to digital entrepreneurship. Pezzini stressed the importance of industrial policies that facilitate the adoption of digital technologies across all sectors to create a more inclusive and sustainable job market. In response to the pressing need for strategies to empower Africa's youth and drive innovation post-COVID-19, Pezzini outlined the essential pillars of such initiatives. He emphasized the significance of digital literacy across all levels of the workforce to ensure a common technological language among industry players. Additionally, Pezzini highlighted the critical role of providing support services to small businesses, including quality control, logistics, and financial services, to enhance their competitiveness in the digital landscape. While acknowledging the resource constraints faced by African nations, Pezzini proposed a targeted approach to implementing these strategies, focusing on specific zones where small firms are clustered and sector-specific interventions can yield maximum impact. Drawing parallels to successful industrial policies in countries like Ethiopia and Archive Okuvai, Pezzini advocated for a concentrated effort to scale up these initiatives and drive holistic digital transformation across the continent.