According to the world bank group- IMF spring meetings, studies shows that there has been strong interest in the African Union’s New Digital Transformation. The international community underlined the need for game- changing cooperation and partnerships to be able to achieve the objective to digitally enable every individual in Africa, business and government by 2030. As we are entering a ‘decade of action’, ambitions and plans must turn into reality. Traditional plans and strategies and market responses are not the only ways that will get us there fast enough, especially at a time when the African society is increasingly fractured. Digital transformation is creating extraordinary opportunities for Africa to grow its economy, more creation of jobs, and transform people’s lives.
A strategy which has been proposed by the World Bank Group is that this digital initiative will help reach the UN Sustainable Development Goals by ensuring that developing countries in Africa will benefit fully from the new digital solutions. For instance, Africa is known for having a higher rate of poverty. Access to services like deposits and credit facilities offered by financial institutions to the small and medium enterprises may be a crucial element to alleviate poverty. The special themes for this decade is focus on bridging the opportunity gap, especially for the poorest people and for women. Extreme poverty in the region of Sub- Saharan Africa, is defined as the percentage of people living below US1.90/day. This is due to the rising level of standard of living between 1995 and 2015. However, as the population of the region continued to expand rapidly, Africa has witnessed an increased in the number of poor people from 278 million in 1990 to 416.4 million in 2015. If Sub Saharan African countries were to continue growing at a fast pace, the poverty rate would decline only to 23 % by 2030. If no drastic actions are taken to boost economic growth, Africa’s share of the world’s poor will rise from 55% in 2015 to 90 % in 2030.
African women continue to encounter problems in education, health, empowerment and income generating activities. They have lower human capital endowments than men. In other words, they have worse access to labor markets, lower wages, they have limited access to productive assets and more extreme constraints on mobility and socially acceptable activities. And hence, poverty aggravates these disadvantages. All participants in the IMF meeting, without any opposition called for a digital transformation agenda by prioritising digital inclusion, including the focus on women. This digital initiative should have a right perspective whereby women should have the right to have access to the digital systems. Furthermore, the current level of cooperation is not enough. UNCTAD examines the African Economic Development from a global context, builds agreement at international level on the challenges that African countries are facing, and therefore promoting economic development in Africa. Despite impressive growth, the African countries continues to struggle with challenges such as poverty, unemployment, inequality, commodity dependence and environmental degradation.
Digital Revolution in Financial Technology presents great opportunities to accelerates the Sustainable Development Goals financing, i.e. providing financial support to the citizens. Fintect companies can leverage quality and user-friendliness of financial information and can empower the African citizens in making their financial decisions. In addition, Financial Technology companies help reduce the financial intermediation which does not add any value for the customers. The innovation in digital Fintech is creating opportunities for the African non-inclusive population to move up the ‘Financial Services Value Chain’. Africans are now gaining more access to the financial services using technology such as mobile payment, digital wallet and micro lending. The development and growth in technology on the continent also helped in the growth of the economy of Africa overall.
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Source of information: World Bank Report 2019