Economies in Sub –Saharan Africa can now leverage on the emerging digital economy to cushion their economies from commodities price fallbacks and various macro-economic instability, a latest World Bank report suggests.
This comes in the wake of subdued growth which saw the regional average growth drop to 2.3 percent in 2018 from 2.5 percent growth experienced in 2017.
According to the April 2019 issue of Africa’s Pulse, the World Bank’s bi-annual analysis of the state of African economies released yesterday, growth remained below population growth for the fourth consecutive year.
“The slower than expected overall growth reflects ongoing global uncertainty but increasingly comes from domestic macroeconomic instability including poorly managed debt, inflation and deficits, political and regulatory uncertainty and fragility that are having visible negative impacts on some African economies,” says the report.
Zimbabwe’s economy is undergoing inflationary pressures coupled with political and regulatory uncertainties that has led to plummeting investment flows in recent years.
But for economies in the region, the emergence of technologies and subsequent rise of the digital economy presents a window of opportunity for most resource-based economies to get cover.
“The digital transformation can increase growth by nearly two percentage points per year and reduce poverty by nearly one percentage point per year in Sub-Saharan Africa alone. This is a game changer for Africa,” said Albert Zeufack, World Bank Chief Economist for Africa.
Zimbabwe’s Information Communication Technology (ICT) sector has recorded tremendous growth in the past five years, making a strong case for a digital economy.
In 2017, the country’s ICTs sector recorded US$ 1 billion revenue up from around US$ 600 million in 2010.
This was also buoyed by massive investments in the sector which recorded development of fibre covering 8 765 km across the country.
But for Zimbabwe, the success of a digital economy still suffers several drawbacks including poor internet coverage and the high cost of internet in the country.
Early this year, owing to political instability, government shut down internet for close to five days, a case that left most businesses counting losses.