Transform Africa Summit 2023: the key takeaways
4,000 participants convened in Victoria Falls, Zimbabwe for the three-day Transform Africa Summit. Beginning in 2013, the 2023 edition was the first time the summit was held outside Rwanda. With start-ups, established companies, news agencies, investment funds, EU representatives and heads of state participating in the event, the summit explored the opportunities and challenges ahead for Africa’s digital transformation. Here are five key takeaways from the summit, and what they mean for the short-term and medium-term future for all relevant stakeholders:
1.Digitalisation is picking up speed: It’s been ten years since the creation of the Smart Africa Alliance and the first ever Transform Africa Summit. Since then the Alliance has grown to include 36 member states, with Malawi being the latest to join. With more than 100 partner organisations (such as the EU, the World Bank and the Norwegian Agency for Development Cooperation), the Smart Africa Alliance has made considerable progress in its goal to create a single digital African market by 2030. It’s progress that mirrors developments on the ground. Mobile penetration across the continent has steadily increased, with 495 million people in sub-Saharan Africa subscribed to mobile phone services by the end of 2020. Digital connectivity has increased by 45%, with Nigeria, South Africa, Egypt, Kenya and Ethiopia having the highest number of internet users and data penetration rates. However, there are still barriers. 60% of people who can access broadband services do not use it. The cost of going online is still high: although Northern Africa enjoys some of the most affordable mobile data prices globally, five of the top ten most expensive countries in the world are in Africa. A lack of evenly distributed infrastructure and high taxation are stalling a more widespread adoption of internet access, which is foundational to the creation of thriving digital markets and economies.
2.Domestic and international partnerships are key to digital development: Participants in a session on the role of foreign investment explored how different stakeholders could collaborate on and benefit from digital transformation in Africa. Mariin Ratnik, the Undersecretary for Economic and Development Affairs in Estonia’s Ministry of Foreign Affairs' Undersecretary, spoke of how Estonia stands as an example of digital integration on a private and public level, and how the country is working with African governments and countries to support their own digitalisation initiatives. From working on Botswana’s tax system, to assisting Nigeria in building a clearly managed state financial system, public and private partnerships present many benefits: not only would digitalisation be a money saver for the state, it contributes to a country’s GDP and can prove to be profitable for the investors. It can also establish and improve relations across different jurisdictions and states, creating a global network that all the stakeholders can use to better position themselves in the dynamic nature of the global digital economy.
3.African start-ups are gaining momentum. But they need more funding: Day One of the summit opened with keynote addresses from King Mswati III (eSwatini), Presidents Lazarus Chakwera (Malawi), Hakainde Hichilema (Zambia), Paul Kagame (Rwanda) and Emmerson Mnangagwa (Zimbabwe). Their message was resoundingly clear: investing in entrepreneurshipis integral to digital development and transformation. In a session chaired by Mozilla, researchers and Mozilla’s Senior Director for Africa Mradi Alice Munyua presented their findings on the infrastructure and financing behind start-ups and tech companies. Venture capital funding is currently the biggest source of foreign investment and is stillgrowing, with collective investments of USD$6 billion. Approximately 60% of this funding comes from American-based companies, with 30% coming from European companies and the rest from other sources. Fintech start-ups accessthe majority of this funding, and for good reason: a 2022 McKinsey reporthighlights that an expanding financial services market, increased smartphone ownership and growing urban populations make fintech companies a sound investment. However, there are still gaps in funding. The $6 billion is a paltry sum compared to the $164 billion worth of investments globally in 2022. Start-ups struggle to access fundingat the pre-seed and seed levels, resulting in novel concepts struggling to get past the ideation phase. Although the significant backing behind fintech is logical, it’s to the detriment of start-ups in other sectors (although agritech did emerge as an area of interest at the summit). This gap is a challenge, but it also presents an opportunity for would-be investors to get in early on emerging companies working in e-commerce, agritech and clean energy.
4.The EU is investing heavily into digital transformation: The EU aims to invest €300 billion in digital transition by 2027. Part of this investment plan is the Global Gateway, which is meant to “boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.” Digitalisation is a priority area of investment with a clear focus on physical infrastructure and the general enabling environment.This area includes the Human-Centred Digitalisation Initiative in Kenya, the Africa Europe Digital Innovation Bridge and the EurAfrica Gateway cable. Although infrastructure and high data costs are a challenge, there is opportunity for European countries to get involved to address funding gaps and support private initiatives.
5.The digital and green transition go hand-in-hand: The future is digital. The future is also green. Ensuring that digital transitions are intertwined with sustainable, climate-friendly practices. The EU-AU Data Flagshipincludes development of Green Data centres, powered by renewal energy and limiting the impact on power supplies – all while protecting and fostering data sovereignty, enhancing processing capacities and data storage. Initiatives that combine the digital and the sustainable may gain momentum, and start-ups and companies that address both would be well positioned for support.
Gatherings such as the Transform Africa Summit highlight all the partnerships, work and research behind Africa’s digital present and future. Although the summit is over, the networks and insights gained from the interactions and discussions will guide and inform future projects and investments.
Photo by Ghazan Global.