Digital transformation is revolutionizing Africa’s business landscape, offering vast opportunities for growth, innovation, and job creation. It is now a “must-have” in businesses across Africa! Digital transformation is a business strategy that incorporates digital technology across all areas of an organisation’s operations. It evaluates and modernizes an organisation’s processes, products, services, operations and technology stack to enable continual, rapid, customer-driven and profit-driven innovation. Digital transformations across nations are strategies for economic development. The African Union’s Digital Transformation Strategy (2020-2030) aims to unlock the continent’s potential by creating a harmonized digital marketplace, fostering e-commerce, cross-border payments, and digital exchanges.
Through these, it will leverage digital technologies to drive inclusive growth, create jobs, reduce poverty, and deepen continental integration, while ensuring Africa’s ownership of digital tools. The African Union (AU) sees digital transformation as a priority project.
Based on African Union Executive Council Decisions related to ICT1, ECA Resolution (812 –XXXI) on the African Information Society Initiative and the Smart Africa Board meeting held on the margins of the 32nd African Union Assembly of Heads of State and Government which took place in Addis Ababa, Ethiopia in 2024, that highlighted the need for the ICT sector to lead the process, the AU Commission undertook to develop a comprehensive Digital Transformation Strategy for Africa in collaboration with the UN Economic Commission for Africa, Smart Africa, AUDA-NEPAD, Regional Economic Communities, African Development Bank, Africa Telecommunications Union, Africa Capacity Building Foundation, International Telecommunication Union and the World Bank.
The Digital Transformation Strategy for Africa will build on the existing initiatives and frameworks such as the Policy and Regulatory Initiative for Digital Africa (PRIDA), the Programme for Infrastructure Development in Africa (PIDA), the African Continental Free Trade Area (AfCFTA), the African Union Financial Institutions (AUFIs), the Single African Air Transport Market (SAATM); and the Free Movement of Persons (FMP), to support the development of a Digital Single Market (DSM) for Africa, as part of the integration priorities of the African Union. The Smart Africa Initiative has set the creation of a Digital Single Market in Africa as its strategic vision. Digital transformation is prominent in Africa in e-commerce, financial technology (fintech), agricultural technology (agritech), fashion technology, transport technology, education technology (edutech), media and entertainment technology, property technology (proptech), as well as health technology (healthtech), etc.
Key trends of digital technology in Africa are:
- Cloud computing: Cloud computing leads technology adoption in Africa, with 61 percent of organisations using cloud services to enhance scalability, performance and cost efficiency.
- Artificial intelligence (AI): AI is transforming industries, from real estate to healthcare to finance, with applications like predictive analytics, customer service chatbots and precision farming.
- Digital payments: Digital payment solutions like credit and debit cards, mobile wallets like Apple Pay, Google Pay, peer-to-peer (P2P) apps like Venmo, PayPal and M-Pesa, are revolutionizing financial transactions and enabling businesses to operate seamlessly without traditional banking infrastructure.
- E-commerce: E-commerce is redefining retail in Africa, providing businesses access to millions of consumers who prefer digital shopping experiences.
Challenges, opportunities of digital transformation
Digital divide: Despite progress, over 900 million people in Africa remain offline, and 76 percent face a “usage gap” due to limited digital skills and affordability issues.
Cybersecurity: Cyber threats and data privacy concerns are significant challenges for African businesses, requiring robust security measures and regulations.
Talent gap: The continent faces a shortage of skilled professionals in emerging technologies like AI, machine learning, and cybersecurity.
High rate of poverty: Poverty is a bane of digital transformation of most companies in Africa.
Despite these challenges, opportunities of digital transformation include:
Job creation: Digital transformation can create millions of jobs, particularly among African youth, who make up a significant portion of the population.
Economic growth: Digital transformation can contribute significantly to Africa’s GDP, with estimates suggesting it could add $712 billion to GDP by 2050.
Innovation: Digital transformation can drive innovation, entrepreneurship, value-for-money and competitiveness in various industries, from fintech to edutech to agritech.
The four (4) main areas of digital transformation are:
Customer experience: Looking at customer experience (CX) holistically, it refers to how a business engages with its customers at every point of their buying journey — from marketing to sales, to customer service and everywhere in between. In large part, it is the sum total of all interactions a customer has with an organisation’s brand. Customer experience is not just a set of actions. It also focuses on feelings. How do your customers or prospective customers feel about your brand? At every customer contact point, an organisation can improve or destroy its contact. It is how customers feel about an organisation that matters especially for repeat buy and referrals. So there are important decisions to make at each point in the process of selling goods, products or services, and those decisions influence how successful an organisation business will be as a result.
Data and analytics: Data and analytics (D&A) refers to the ways organisations manage data to support all its uses, and analyze data to improve decisions, business processes and outcomes, such as discovering new business risks, challenges and opportunities.
Business model transformation: Business model transformation refers to the process of changing the fundamental way a company operates and delivers value to customers, in order to improve its performance, competitiveness and adapt to changing market conditions. It involves rethinking the company’s strategy, operations, financials, and organisational structure, in order to create a new and more effective business model. The goal is to create new sources of revenue, lower costs, and increase the overall value the company provides to its customers and stakeholders.
Digital operations: Digital operations are a range of activities intended to manage, regulate, and organise every aspect of operations in the organisation, but digitally or online. The goal is simple, to keep the organisation running smoothly, and productively. By transforming most of the operational processes into digital, organisations will be able to achieve efficient and effective production. Activities will become more transparent and under control, as an organisation is able to see more things at once from its screen (dashboard).
By transforming into the digital world, organisations will be able to collect and recall everything about their operations with ease.
To harness the potential of digital transformation, African businesses, governments, and stakeholders must collaborate to address challenges, invest in digital infrastructure, and develop the digital skills of Africans for the digital economy.
Olufemi Adedamola Oyedele, MPhil. in Construction Management, managing director/CEO, Fame Oyster & Co. Nigeria, is an expert in real estate investment, a registered estate surveyor and valuer, and an experienced construction project manager. He can be reached on +2348137564200 (text only) or femoyede@gmail.com
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