Can Africa genuinely become a digital economy powerhouse?

Your insight into alternative thinking

Many countries worldwide have embraced the digital economy and the rapid advancements of the Fourth Industrial Revolution (4IR).

Africa is no different; Nigeria, Egypt, and South Africa all have bustling digital economies that show tremendous promise for budding entrepreneurs. However, Africa’s vulnerability and overreliance on existing infrastructure will be a significant challenge if it wants to emerge as a digital economy powerhouse.

The recent damage to the undersea cables that connect the world’s second-largest continent to the internet highlighted these challenges.

Significant disruption

A News24 article points out that internet disruptions across the continent caused by multiple undersea cable faults are showing just how precarious Africa’s connection to the digital economy really is.

South Africa is still seeing the effects, but many other countries are worse affected. Since last week, outages or poor performance have occurred in Ivory Coast, Liberia, Benin, Ghana, Nigeria, and Cameroon.

The article adds that in February, three critical cables (AAE-1, EIG, and SEACOM) connecting Africa’s east coast to Europe were disrupted, purportedly due to Houthi sabotage. Then, on 14 March, four of the five west coast cables — SAT3, WACS, ACE, and MainOne — were apparently damaged by an underwater rock fall near the Ivory Coast.

These developments exposed Africa’s general lack of capacity, said Edward Lawrence, co-founder of the Workonline Group, one of Africa’s largest Internet Protocol (IP) transit networks. Particularly outside South Africa; at present, SA too is poorly served compared to the rest of the world.

High traffic, low capacity

The article points out that Lawrence said South Africa was connected to the world by 10 undersea cables, of which only three are in operation currently due to the breakage crisis.

He added: There are 574 active and planned submarine cables worldwide, yet South Africa only has 10 that connect it to the rest of the world, and seven of these are currently out of action.

The damage to the Seacom cable ahs exposed the fragility of Africa’s digital capabilities
Image By: ITWeb

Capacity restrictions are further hampered by the time it takes to not only repair underwater cables but also build new infrastructure.

The article adds that the World Bank has the Digital Economy Initiative for Africa (DE4A), which aims to ensure that every individual, business, and government in Africa will be digitally enabled by 2030.

According to the European Investment Bank, the emergence of an African digital economy could improve millions of lives and swiftly reshape societies.

The bank says Africa has a unique chance to become more sustainable and generate economic growth by making better use of data rather than relying on outdated technologies that consume fossil fuels.

Digitalisation has numerous advantages: it accelerates the spread of information, brings people closer together, creates jobs, and improves societal efficiency.

Long horizon ETR

Another News24 article points out that it will be a matter of months before all the damaged subsea cable internet infrastructure connecting South Africa to the rest of the world is fully repaired, assuming no further issues or complications.

However, it is difficult to gauge the extent to which problems continue to persist for different service providers as a result of the cable breaks.

The article adds that while there is optimism that the four cables on the African West Coast will be repaired in a matter of weeks, it will likely take months before the Seacom cable that snapped in the Red Sea is repaired.

Repairs to the Seacom cable, which runs along the east coast of the continent, are only likely to proceed in the second quarter of the year, Seacom said on 8 March.

The company said at the time that it was applying for repair permits, which it said at the time could take up to eight weeks.

Entrepreneurs cannot afford log periods of no connectivity
Image By: Canva

Where do we go from here?

For Africa to take its place as a digital economic powerhouse, there needs to be a significant shift away from the overreliance on the undersea cables that connect the continent to the internet. Companies and emerging entrepreneurs cannot afford to take substantial breaks from critical infrastructures that take months to repair.

There has always been talk about the interest of international companies seeking a footprint in Africa and partnering with African companies (and countries) to build an infrastructure backbone that would benefit multiple parties.

Granted, we have experienced one of the most volatile economic environments since the Great Depression in the 1930s. During this time, it was only natural for companies to embrace austerity over growth. However, with many economists predicting that this volatility will wane over the next two years, perhaps it is time for these companies to put their money where their mouth is and stop paying lip service to accelerating growth programmes that will benefit multiple parties.

The Mystery Practitioner is an industry commentator focusing on the shifting dynamics and innovative thinking that BRPs and turnaround professionals must embrace to achieve business success.