A little Internet goes a long way in Africa; and the strange case of South Africa vs. Rwanda

Even with a similar level of government policies and “official” commitment to promote ICTs in a country, the outcomes can be wildly divergent.

A NEW report by the World Economic Forum (WEF) measuring how economies use opportunities offered by ICT for increased competitiveness and well-being has the majority of African countries at the bottom of the rankings, given high poverty levels and poor infrastructure.

Only Mauritius makes it into the top half of the rankings, at position 45 overall, and the list shows a high correlation between a country’s income and its position on the WEF’s Networked Readiness Index (NRI).

Rich countries have more access to ICT and are able to leverage it effectively, and poor countries, less so. Essentially, ICTs are neither as ubiquitous nor spreading as fast as many believe, and this explains in part the persistence of the digital divide across and within countries.

You might think that that’s the end of the story – too bad if you’re poor.

But digging deeper into the data reveals that it’s more complex than that; a little Internet can go a long way in Africa.

Even with a similar level of government policies and “official” commitment to promote ICTs in a country, the outcomes can be wildly divergent.

Take South Africa and Rwanda as an example. On the overall NRI rankings, they occupy position three and six in Africa respectively, although South Africa is 14 times richer per capita than Rwanda.

When we break down the index into its constituent indicators, some interesting trends emerge.

At government level, the two are the clear leaders pro-ICT policies.

Rwanda is first in Africa (and an impressive 19th globally, ahead of even the US, France and South Korea) in how much the regulatory and legal framework facilitates ICT penetration and business development, taking into account factors such as property rights and the rule of law; South Africa comes second.

World Cup 2010 and IT

But South Africa has a much more developed technology infrastructure than Rwanda does, partly because South Africa is richer and so has more money to invest on its fibre optics and networks, and also because it is not landlocked, unlike Rwanda.

The other reason is that South Africa has a much more globalised economy, so there is high external demand for ICT infrastructure from people wanting to invest in the country, and internal demand from those South Africans for whom connecting with the global economy is an integral part of their lives.

In fact, when South Africa won the bid to host the World Cup in 2010, FIFA began to put major pressure on it to upgrade its Internet infrastructure to “Western” standards, so that European audiences would be able to live-stream the games.

With that, a kind of undersea cable arms race began, starting in South Africa and quickly spilling over to the eastern and western coasts of the continent.

That puts South Africa in fifth place in ICT infrastructure in Africa, after Seychelles, Libya, Mauritius and Algeria. Rwanda is 13th.

But when we look at the economic and social impacts of ICT – in other words, its actual outcomes on the ground – the two countries are very  far apart.

South Africa is first in the continent in the economic impact of ICT, mainly because business usage is so high. Because the economy is highly formalised (just 15% of jobs in South Africa are in the informal sector), there’s a big demand for technology to streamline business and make it more efficient.

In fact, nearly a quarter of South Africa’s GDP is drawn from the financial services, where there’s a huge need for automating and monitoring transactions down to the last second.

Transporting bananas to market in Rwanda. Agriculture accounts for 70% of Rwandan exports, 80% of employment, and a third of GDP.(Photo: IFPRI/Gwendolyn Stansbury)

But in Rwanda, the informal sector accounts for 79% of all non-agricultural jobs, and many of them are in small trading and services, therefore the business demand of technology as a critical component of operations (once you have actually opened the business) is lower.

In any case, agriculture accounts for the bulk of employment and exports, and the key inputs in the agricultural sector are land, rainfall and labour - not internet technology as such.

Rwanda beats South Africa

But when it comes to the social impact, the rankings are reversed. Rwanda is now first in Africa in the social impact of technology, measured by improvements in wellbeing, with a particular focus on education, energy consumption, health and the environment. 

Rwanda’s high performance on this indicator is boosted by the government’s use of ICT in providing services to citizens, as well as the One-Laptop-Per-Child policy that has seen over 200,000 laptops distributed to pupils in grade school. South Africa is 15th.

In other words, a little Internet in Rwanda goes a long way in improving the wellbeing of citizens, while in South Africa, technology does not have broad social benefits as such, and tends to reward capital.

Countries like Kenya and Senegal display a similar trend of doing more with less – the two are 10th and 19th in their policy and regulatory environment, not particularly good, but not so bad either.

Their infrastructure is fairly good – Kenya at position 9, and Senegal at position 20.

But technology has outsized economic and social impacts. Kenya is second on both counts, and Senegal is fifth on both.

But perhaps the country which is punching the most above its ICT weight, in economic terms at least, is Nigeria.

Nigeria does not feature in Africa’s top 20 rankings with regard to policy, regulation or infrastructure. But it still manages to be eighth in the economic impact of technology.

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