Biashara Afrika 2024: Advancing Africa’s economic integration and digital transformation

In charting its own development path towards an "integrated, prosperous and peaceful Africa [which is] driven by its own citizens…" Agenda 2063, Africa's development blueprint, in its aspirations recognises the need for inclusive and sustainable development[1]. For Africa to meet these development ambitions the African Development Bank (AfDB) informs us that Africa must reach a sustained growth path of at least 7%. Last year Africa recorded a 3.1% growth, which is a deterioration from the 4.1% recorded in the previous year.

In seeking to facilitate for growth and development in adopting Agenda 2063, the African Union 12 Flagship Projects, amongst them the Africa Continental Free Trade Area (AfCFTA), which seeks to create a single market for the benefit of the 1.3 billion people in Africa with a combined annual GDP of $3.4 trillion.

As in East Asia where intra-regional trade was over 40% by 2021, growth can be impactfully realised through intra-regional trade[3] - a key objective of AfCFTA's mandate to eliminate trade barriers and boost intra-Africa trade. Unfortunately, in Africa in the same period such trade was only 14.5% after rising from 11% in 2016. Currently it has declined to 13.7%. Since the successful implementation of AfCFTA could generate an additional US$450 billion in revenue by 2035, a step change is required in investing in the digital economy, because much of this growth will be driven by digital technologies that facilitate trade, remove barriers and open new opportunities for businesses across the continent.

With this growing recognition and the potential transformative role that can be played by the private sector, the AfCFTA Secretariat in partnership with the Government of Rwanda convened the Biashara Afrika 2024 Forum from 9 to 11 October. Convened under the theme "Dare to invent the future of the AfCFTA", the Forum sought to rally the private and public sectors behind AfCFTA and chart a course towards addressing "the structural obstacles and policy challenges that need to be actively addressed to spur investments and realise Africa's full potential." Thus, the name 'Biashara' which means 'business' or 'trade' in Ki Swahili. MTN was represented at the Forum by Acting Group Chief Sustainability & Corporate Affairs Officer, Thato Motlanthe; as well as MTN Rwanda CEO, Mapula Bodibe.

It is within the firm belief statement of MTN to ensure that MTN reimagines a future where everyone benefits from a modern connected life … no matter how impossible it may seem. This belief is rooted in the 30-year journey of the MTN Group which has seen the Group at the forefront of promoting localisation and intra-Africa trade across 17 African markets and beyond. MTN's role in providing the digital infrastructure that underpins these activities is essential to unlocking Africa's potential.

Consequently, MTN's more than 280 million subscribers, stand to uniquely position the Company to support the integration that AfCFTA requires. Be it the small female trader (who is a MoMo customer), or youth medium-sized entrepreneur (who is connected through Ayoba), or even big business (whose trade is facilitated by the Bayobab infrastructure). Most of the connected Africans along the 8 000 North/South or 7 400 km East/West stretches of the continent are agents of change who are benefiting from MTN. It is the collective power of its networks and platform businesses across the continent that have positioned MTN as a partner of choice for multilateral organisations such as the AfCFTA Secretariat or Governments.

Thato Motlanthe highlighted to the Biashara Forum the need for transformative regulatory and investment governance reforms, which if implemented can facilitate for the expeditious closing of both the coverage and usage gaps, whilst catapulting Africa's economies into a new and sustained growth path. He commented: "By reforming policy, affordability for consumers and investments by operators can be improved. For instance, given that taxes and fees account for 30% of industry revenues, it speaks to the additional resources can easily be invested[4]". While this may not be the means to an end, he also acknowledged the need to create a healthy competitive environment through other reforms such as voluntary infrastructure sharing, national roaming and fair share frameworks, amongst others.

Thato Motlanthe also took note of the perennial infrastructure gap, which the African Development Bank estimates at about $100 billion, adding: "This calls for the redoubling of cross-sector efforts and investment actions. Thus, the Biashara Africa, which is by and for Africans, is an important platform by which can facilitate for cross-sector collaboration to close the infrastructure gap."

Considerations also ought to what one can call "soft infrastructure" which includes the likes of education and digital skills, that also have their own gender dimensions. Noting that Africa has the biggest digital skills gap in the world, despite the fact that it is estimated that Sub Saharan Africa will have over 230 million digital jobs by 2030, he informed the Forum that "MTN has launched the MTN Skills Academy, which seeks to up Africa's digital skills in the up and down streams of the industry".

We do believe that the Academy will complement the inroads we have made, especially as it relates to affordable communications and financial inclusion, which have seen MTN collaborate with the World Bank and IMF in some of its 16 markets where MoMo operates.

One of the critical discussions at the Forum revolved around cross-border digital payments. Mapula Bodibe noted that "the ability to facilitate seamless, affordable and secure cross-border transactions is essential for the success of AfCFTA. Small and medium enterprises (SMEs), which account for 80% of Africa's businesses according to the World Bank, stand to benefit enormously from streamlined payment systems." MTN Group, through its pioneering role in Mobile Money, is working to develop digital payment systems that reduce transaction costs and enable businesses to reach new markets. This aligns with the goals of AfCFTA to remove barriers to trade, unlock economic potential, and create a more integrated and competitive continent.

Consequently, amongst others, the Forum considered mechanisms by which the digital economy can contribute to increasing intra-African trade and promoting financial inclusion whilst integrating Africa's economies. Key amongst the binding constraints in utilising the digital economy to unlock potential has been the limitations to conducting business and promoting investments. Whereas there have been poles of excellence, overall, the policy and regulatory environment has been constraining.

The success of AfCFTA depends on collaboration between governments, private companies and international organisations. MTN has a long history of working with both public and private sector partners to expand connectivity and drive economic growth. At Biashara Afrika 2024, MTN emphasised the need for public-private partnerships to accelerate the development of digital infrastructure. By working together, stakeholders can overcome the challenges that hinder Africa's progress, such as inadequate infrastructure and limited access to digital services in rural areas.

As conversations progress, one message remains clear: the journey towards a more integrated and prosperous Africa is a shared responsibility. By working together, African leaders, businesses and international partners can create a future where connectivity enables economic progress and inclusive growth. MTN's active participation in this transformation demonstrates the company's commitment to supporting Africa's digital future and contributing to the realisation of "The Africa We Want."

[1] See African Union, Agenda 2063: The Africa We Want, www.au.int

[2] See: https://www.gsma.com/mobileeconomy/wp-content/uploads/2024/02/260224-The-Mobile-Economy-2024.pdf

[3] See: https://www.brookings.edu/articles/asias-trade-at-a-turning-point/

[4] See: GSMA Mobile Tax Policy and Digital Development Report

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