As the era of digital transformation continues to evolve, Africa is learning to navigate its intricacies and benefits for the development and growth of the economies within the continent. Digital transformation refers to the adoption and integration of modern technology that delivers value to receivers. It has the ability to auto-speed processes and operations typically handled manually, which results in the creation of new opportunities that can stimulate and promote inclusive growth. It also plays a huge role in reducing environmental health issues in Africa, through the creation of sustainable energy systems that don’t harm the environment.
The modern technology connected to the essence of digital transformation includes computer technologies, software engineering and telecommunications networks, identified as information technology infrastructure (or IT infrastructure).
How IT infrastructure supports economic growth
The evolution of IT infrastructure has seen different stages of development, from the traditional mainframe systems to the current mobile and cloud computing. All of the components of IT infrastructure; servers, web servers, routers, content management systems, and interconnected networks, among others, play a role in the function of organisations and ultimately, in economic activity.
For example, the availability of the internet gives individuals and organisations access to valuable information and participation in global value chains. It also offers access to interprovincial and intercountry networks as well as an opportunity to work collaboratively towards similar goals, such as innovation building, which can boost job creation.
However, the continent faces several challenges in relation to technology based-infrastructure, and this comes in various forms such as; lack of access to existing infrastructure due to the digital divide, the lack of adequate infrastructure and sufficient investment procurement for infrastructure development.
This article explains how, despite South Africa having 64 percent of internet penetration, broadband and mobile internet speed is below the global median. It further explains that digital payment capabilities are not inclusive. And, this is a reflection of the entire African social structure landscape.
DBSA’s role in IT infrastructure development in Africa
The Development Bank of Southern Africa (DBSA) is mandated to promote inclusive and sustainable socio-economic development, growth and regional integration through infrastructure finance and development that improves the quality of life for people in Africa. The promotion of interregional integration and cooperation between SADC and the adjoining Regional Economic Communities in Africa is key in helping achieve our mandate.
And, through project planning and development, advocacy and partnership building, we’re able to successfully mobilise necessary resources.
We further play a supporting function to project owners across the public sector to prepare blended finance projects. We assist with identifying and developing appropriate funding structures and sources of revenue, financial models and financial delivery mechanisms and incentives for the projects.
We also engage with financial institutions and the market to develop financial instruments that will enable investments for infrastructure development. Our areas of operation include Information and Communications Technology (ICT), wherein we facilitate infrastructure projects through investments.
As mentioned above, ICT investment, such as broadband infrastructure, is vital to support economic growth, increase competitiveness, create decent work and improve nation-building and social cohesion for local, national and regional integration.
Connectivity infrastructure across the SADC region has expanded significantly in the last decade, augmented by the undersea cables that connect Africa with the rest of the world. Africa’s sea cables cover four connectivity corridors; Africa-Europe, Africa-Latin America-US, Africa-Asia and African-region. Enhanced global connectivity has stimulated opportunities to address the gaps in the access network, the so-called last-mile infrastructure.
But despite this success, research showed that the rural areas and some urban areas with high population density lack sufficient connectivity, and this is a challenge that spans across Africa. As such, we’ve identified opportunities to transform connectivity in these areas to ensure connectivity stability. We facilitate this through projects such as the Internet 4All programme in Africa, SA Connect and municipal connections.
ICT infrastructure is one of the key drivers of economic growth in Africa. It provides access to information flows and global networks, which encourages numerous opportunities for innovation. This is why investing in ICT infrastructure can make a huge difference in Africa’s socio-economic development and participation in the increasingly competitive global markets.