By Amitabh Kant and Abhiskek Sudke
Marked by the rise of digital solutions, digitalisation is our era’s transformative opportunity. From progressing towards the SDGs, tackling climate change, to broadening financial access and enhancing agricultural outputs, the digital era is transforming how we live and work. However, more than 1.4 billion in Africa are miles away from leveraging this potential. Digital exclusion is a significant impediment to socio-economic development. The average global internet penetration rate stands at 67%, while it stands at 43% in Africa.
This disparity is even more pronounced when comparing high-income countries, where over 90% of the population used the internet in 2022, to low-income countries, where only one in four individuals have internet access. 850 million people lack any form of identification globally and an estimated 470 million people only belong to sub-Saharan Africa.
With a significant portion of Africa’s population still digitally excluded, there’s an urgent need to bridge this gap. Digital inclusion goes beyond internet access; it encompasses tools, skills, and infrastructure needed for these nations to compete in the global digital economy. The manifold benefits of Digital Public Infrastructure (DPI) range from improved governance and transparency to enhanced economic opportunities and a better quality of life.
Africa, with its young population and fast-growing markets, is poised to be an economic powerhouse. The continent is home to six of the world’s 12 fastest-growing countries. With the African Continental Free Trade Area (AfCFTA) representing a $16.12 trillion opportunity by 2050 and over 600 active tech hubs for start-ups, the continent’s digital future looks promising. Scaling DPI can catalyse rapid and inclusive economic growth in Africa, replicating India’s model.
The African Union’s (AU) Digital Transformation Strategy for Africa (2020-2030) aligns seamlessly with India’s vision, aiming to transform Africa into a digitally empowered continent by 2030. India is promoting knowledge and resource sharing ranging from harmonising policies, capacity building, to implement DPI globally. All synergies with Africa should inherently have a digital component, and efforts need to be made to advance this collaboration.
India, with its vast population and diverse challenges, has made significant strides in addressing digital exclusion. Jan Dhan accounts brought more than 500 million people into the formal banking system with approximately 55.5% accounts belonging to women, and 67% accounts opened in rural/semi-urban areas. DPI took the benefits of Aadhar a step ahead by linking bank accounts and mobile phones to leverage financial sector, health, jobs, and urban data to access services. DPI paved the way for fast and easy digital payments and credit, catalysing both demand and consumption.
According to a 2022 report by the World Bank, nations that have invested in DPI have observed an average increase in GDP growth of 1.5%. DPI accelerated India’s start-up ecosystem, which grew from about 900 start-ups in 2016 to more than 90,000 (including 100+ unicorns) in 2022. Over the years, India’s start-up ecosystem has burgeoned and will contribute 4-5% of India’s GDP in the coming three to five years.
Recent studies by global institutions such as the Bank for International Settlements (BIS), World Bank, and the IMF have lauded India’s efforts in financial and digital inclusion of people noting that with DPI, India achieved in a decade what might have taken half a century otherwise. India Stack has leveraged DPI to create digital solutions in finance, health and education that reach the last mile at low cost. This has improved the ease of living, business, and governance.
During its G20 Presidency, India signed Memorandums of Understanding (MoUs) with Armenia (Asia), Sierra Leone (Africa), Suriname (South America), and Antigua and Barbuda (Caribbean) to implement India Stack in these countries. India has been instrumental in promoting DPI globally with all G20 countries agreeing on a definition and framework for DPI for the first time. G20’s focus on DPI marks a significant milestone in the global digital inclusion journey. India highlighted the importance of DPI for digital health, start-ups and MSMEs, halving the gender digital divide by 2030, and harnessing data for development (D4D).
Furthermore, the G20 leaders agreed on a common framework for the development, deployment, and governance of DPI. This includes the establishment of the Global Digital Public Infrastructure Repository (GDPIR), a virtual repository of all DPIs, and a significant push to support digital transformation in low and middle-income countries (LMICs) at G20.
The declaration also underscores the need for significant financing to bridge the digital divide. This monumental task cannot be shouldered by the public and multilateral funds or private sector alone, it necessitates a collaborative approach. The convergence of expertise and financing from partners including donors, investors, and multilaterals is required to scale DPI in LMICs.
Africa and India can together take a holistic and economy-wide approach that empowers individuals, bolsters startups and MSMEs. Kenya has emerged as a leader in financial inclusion in sub-Saharan Africa. In 2006, just before M-Pesa was launched, only 26.7% of Kenyans had access to formal financial services and by 2016, that had risen to over 75%. India and Africa are strongly positioned to together design and roll out digital transformation strategies for Global South.
With both India and AU in G20, there’s a unique opportunity to drive Global South-led digital transformation. The G20 presidency will continue to be with the Global South until 2025, with Brazil taking the helm in 2024, followed by South Africa. In 2025, we will have an opportunity to demonstrate progress and achieve ambitious outcomes on DPI-enabled digital transformation during the first G20 that will be hosted in Africa.
Bringing together multiple stakeholders to design and fund action-oriented projects to implement and scale DPI in LMICs, the Global South can provide a new model of digitalisation for the world. This model of digitalisation will be low-cost, leave no one behind and achieve human-centric globalisation through technological advancement. If we can solve problems for Global South, we can solve them for the entire world.
The authors, Amitabh Kant and Abhiskek Sudke, are respectively India’s G20 Sherpa and policy officer to the G20 Sherpa. Views are personal.