December 9, 2016 — Yesterday, global technology firm, Siemens released a report on digitalisation in four countries on the African continent. The newly released report titled African Digitalisation Maturity Report, contains over 40 pages and assesses digital maturity across different industries (manufacturing, energy and transportation) in Ethiopia, Kenya, Nigeria and South Africa.
In order to assess the readiness of South Africa, Nigeria, Kenya and Ethiopia to capitalize on digitalisation, the study relied on 26 individual indicators grouped into four pillars: Economic Maturity, Environment (which measures the protection of intellectual property and innovation), Infrastructure, and Skills and Digital Literacy.
Key highlights from the report are summarized below:
- South Africa topped the list on economic maturity with a score of 43 out of 100 followed by Kenya with 33, Ethiopia at 26 and Nigeria with 18.
- South Africa also ranked first with regards to ICT infrastructure with 82, followed by Nigeria with 49, Kenya at 44 and Ethiopia with 33. The Infrastructure pillar assessed the extent to which the country has invested in the ICT infrastructure that is required to support the digital economy. Indicators under this pillar assessed the use of infrastructure, as well as affordability. Indicators include access to international bandwidth, mobile-network coverage, internet and mobile-phone penetration, the costs of broadband and mobile-phone access.
- With regards to Skills and Digital Literacy, South Africa came in first with 53, Kenya second with 38, Nigeria had a score of 35, and Ethiopia scored 20. Skills and Digital Literacy reflects the human capital endowment of a country.
- With regard to Environment, South Africa ranked first at 60, followed by Kenya with 55, Nigeria at 46 and then Ethiopia with 27.
- On digital protection South Africa and Kenya both topped the list scoring 53. According to the report, the government of Kenya has done a lot towards improving the regulatory environment for ICT, including removing VAT and import duties on handsets in 2009. The private sector, namely Safaricom, has also played a key role by investing in affordable access and technology literacy. The Environment pillar measured the extent to which the country has a business, legal and regulatory environment that supports and protects the development of digital business. Indicators under this pillar assessed the overall ease of doing business, ability to enforce contracts, the presence and enforcement of ICT-related laws, the protection of intellectual property and evidence of ICT-related innovation and start-up activities.
- McKinsey & Company reported that Nigeria’s economy, like South Africa, is highly reliant on imported technology. However, as part of government’s support for local content, Nigeria is expanding into hardware manufacturing and software development. Nigeria manufactures laptops, and is looking to expand into affordable mobile phones for the domestic and regional market.
Kenya and South Africa fare much better than Nigeria and Ethiopia when it comes to educational attainment with scores of 43 and 65 respectively. The scores however are well below 100, meaning that both countries are still quite far off the international benchmark for educational attainment. This is particularly evident in the gross tertiary education enrollment rate which is 4% for Kenya and 20% for South Africa compared against an international maximum score of 98% and minimum score of 2%.
Existing policies relating to the ICT sector in Nigeria, as stated in the National ICT policy (2012), require a review. There are currently, various uncoordinated policies guiding different facets of the Nigerian ICT sector.
A survey by GSMA on the mobile economy in Africa suggested that nearly 50% of Nigerians make use of Internet Protocol messaging services (e.g. WhatsApp, Snapchat, and WeChat), while 12% make use of Facebook.
Interestingly, while Nigeria scores much lower on the access and use measure than South Africa (a score of 44 as opposed to 94), the proportion of Nigerians using Internet Protocol messaging is the same as it is in South Africa (close to 50%).
With regard to access and use indicators for Nigeria, the report showed that close to 100% of the population have mobile network coverage in Nigeria while 55% have access to a 3G network.
On internet penetration in Nigeria (defined as consistent access all the time to the internet via mobile or fixed line) the report showed that it is relatively low at 8.5% of the population.
Nigeria performs particularly poorly when it comes to the sophistication or complexity of its economy, with a score of less than 10 out of 100. This suggests that it remained too heavily reliant on a single commodity, oil, for export revenue.