Expert views

Empowering Africa’s young people in the digital economy

19 December 2019
Ibrahima Nour Eddine Diagne, president, African Performance Institute

Africa’s new open trade area has the potential to generate jobs, growth in the services market

The African Continental Free Trade Area (AfCFTA) is an ambitious endeavour that should transform all of the economies on the continent. It will open new frontiers in opportunities and position Africa as a force to be reckoned with in the global economy.

Liberalizing trade in goods is typi­cally portrayed as the main aspect of this agreement. Trade in services tends to be a question of secondary importance in the eyes of observers who are not experts in the issue.

In truth, since trade in services does not face the same obstacles as trade in goods, it is often subject to different considerations; notably it depends to a great extent on regulatory issues. The digital economy, which mostly involves services, is probably the greatest source of opportunities for Africa and its young people.

The digital economy constitutes an instrument for accelerating and amplifying job creation possibilities for the young people of the continent. This essentially hinges on five factors: skills, markets, regulations, cost competitiveness and availability of infrastructure and support services.

In-demand skills are determined by international standards. The capacity to deliver training that meets these standards on the continent will enable young people to put their skills to good use in the African market and outside it. Emphasis must also be placed on innovation and business incubators, firstly to bring solutions to the specific issues of the continent and secondly to give young people a framework within which to express their ideas and test their capacities.

Integrating international markets is a delicate issue due to the regulatory aspect. Bold regulations must be implemented that favour the birth and emergence of African digital giants without infringing the rules of multilateralism. Effectively, the universal nature of the regulations is often linked to the political weight of the countries proposing or imposing them.

The current context of multilateralism, characterized by tensions on trade rules, must not lead Africa to impose market conditions that are incompatible with its ambition to make digital trade a main factor in its development. It is therefore urgent to work with African experts who are qualified to define the regulatory strategy for the continent, which must be compatible with the ambitions of the AfCFTA.

Concerning competitiveness, this will depend on the costs of financial services, logistics, energy, telecommunications, taxation and so on. All of these factors will impact heavily on the competitiveness of African digital offers. There are national or regional regulations for each of these sectors.

However, investment strategies to enhance the quality and reduce the costs of these services are not keeping pace with the continent’s ambition for development. Between operators’ willingness to maximize their profits and countries’ weak negotiating capacities, there is almost no room for private African players to get a foothold in these sectors.

It is undoubtedly by addressing these factors that support services and infrastructure will be available in quantity and quality, enabling young people to profit fully from the digital economy in the context of AfCFTA.

Now the fundamental question is how young people might benefit from this market. There are a number of possibilities open to them, including salaried jobs and launching a start-up, perhaps as exporters of digital services.

Success in each of these areas will require concerted efforts from the private sector, government and the academic community. The digital economy must be vastly propagated across all training courses and at all levels. It is also necessary to innovate, by implementing certification programmes based on new needs and new technologies. This will enable the continent to meet not only its own needs but also international demand.

Governments must create conditions for the emergence of very large African digital undertakings. This can be achieved through appropriate regulation; promotion of industrialization, specifically in the digital economy; a taxation policy favouring intracommunity trade; and promoting investment in such a way that costs are reduced and availability and performance are improved.

The African private sector must commit to digital transformation to benefit from opportunities that will be generated by the AfCFTA. Existing undertakings must not be weakened or they will put the continent in a situation where the potential in terms of job creation will be negated by job losses.

The dream of a prosperous Africa is within reach. It is a promise for African young people, who must be active stakeholders in the process as decisions being taken today will determine what kind of world they will live in. They will have to take the trouble to understand the issues facing them to better express their needs and, above all, prepare themselves for this great meeting that must exclusively serve their interests.

The poverty that leads to great tragedies as a result of the perilous adventures of emigration must progressively give way to an Africa of opportunities that retains its best and brightest.