MORE households in Africa own a mobile phone than have access to electricity or clean water, and nearly 70% of the poorest fifth of the population in developing countries own a mobile phone.
It is perhaps not surprising, on the back of revelations last year that in most African countries, mobile phone networks are near-universally available, and the poor would rather skip a meal than be short of airtime.
READ: The mobile phone comes first in Africa; before electricity, water, toilets or even food
Digital technologies – including the internet, mobile phones, and all the other tools we use to share information digitally – have spread quickly: the number of internet users globally has tripled in the past decade, from 1 billion in 2005 to an estimated 3.2 billion by the end of last year.
But digital dividends – the broader development benefits of using these technologies have lagged behind expectation, says a new report from the World Bank.
In some cases, the benefits are clear: they have boosted growth, expanded opportunities, and improved service delivery. But overall, their impact has been unevenly distributed, and sometimes, offset by emerging risks, such as cybercrime and government control.
We draw 20 big lessons from this year’s World Development Report, titled Digital Dividends:
1. On average, 8 in 10 people in the developing world own a mobile phone, and the number is steadily rising. Even among the poorest fifth of the population, nearly 70% own a mobile phone. The lowest mobile penetration rate in sub-Saharan Africa is 73%, in many countries, mobile network coverage is universal or near-universal.
2. Still, internet adoption lags behind considerably: only 31% of the population in developing countries had access in 2014, compared to 80% in high income countries.
3. In Africa, the digital divide across demographic groups remains considerable. There’s a 12-percentage point difference in access between youth (20%) and those more than 45 years old (8%). Women, and rural people are also less likely to have access.
4. Governments are increasingly going digital, and a greater share of government jobs in developing countries is ICT-intensive than in the private sector. By 2014, all 193 UN member states had national websites: 101 enabled citizens to create personal online accounts, 73 to file income taxes, and 60 to register a business. But so far, developing countries have invested more in automating back-office functions (such as financial management and customs processing) than in services directed at citizens and business.
5. The number of direct jobs created by digital technologies is fairly modest, but the number enabled by it can be very large. In developing countries, the ICT sector accounts for only about 1% of the workforce on average: less than 0.5% in Ghana, for example; and in high income countries, it’s just about 3-5%.
Instagram, the phenomenally successful photo sharing app with over 400 million users at the end of 2015, had just 13 employees in 2012 when it was bought by Facebook for $1 billion.
But indirect job creation by digital technologies can be huge. In Kenya, the M-Pesa mobile money system creates employment for more than 80,000 agents.
6. People’s perceptions are that digital technologies have certainly made them better off. In 12 countries surveyed in Africa, 65% of people believe that their family is better off because they have mobile phones, while 20% disagree (14.5% not sure). And nearly three-quarters say that mobile phones help save on travel time and costs, with only 10% saying otherwise. Two-thirds believe that having a mobile phone makes them feel more secure and safe.
7. The internet has also improved efficiency and productivity through automation and data-driven management. MajiVoice is a SMS-based complaint mechanism for water and sewerage services in Nairobi. Before it was initiated, the Nairobi water company received on average 400 complaints a month. Since its launch in 2013, the utility has been getting about 3,000 complaints a month, resolution rates climbed from 46% to 94%, and time to resolution dropped by 90%.
8. Much of the benefit from the internet (and arguably, the most important impact of the Information Age) is unmeasured, as it is not able to be captured in gross domestic product (GDP) statistics, such as time saved, consumer convenience, expanded choice, better quality leisure time, and access to more knowledge.
9. But many problems and failures of the internet surface when digital technology is introduced but the important analogue complements remain inadequate – that is, regulations that ensure a high degree of competition, skills that leverage technology, and institutions that are accountable.
10. When the internet delivers scale of economies for firms but the business environment inhibits competition, the outcome could be excessive concentration of market power and rise of monopolies, inhibiting future innovation. In Morocco, for example, politically connected firms are able to get preferential access to digital technology, thus entrenching their dominance and discouraging other firms from innovating, the report states.
11. When the internet automates routine tasks but workers do not possess higher-order skills (such as creativity and interpersonal skills) that technology enhances, the outcome is greater inequality as many workers compete for low-paying jobs.
12. When the internet helps overcome the barriers that impede service delivery but governments remain unaccountable, the outcome will be greater control, rather than greater empowerment and inclusion.
13. One curious paradox of the digital age is that autocratic governments have promoted e-government while censoring the internet. It’s called the “dictator’s dilemma” – if rulers permit open discourse on the internet, they risk challenges to their authority. If they don’t, they risk isolating themselves from the global information economy.
This is a delicate balancing act, and countries are becoming more sophisticated in calibrating their control – for example, censoring content that might encourage collective action, but not individual criticism.
14. Firms’ use of the internet in Africa can vary widely among countries, even in the same sector. A 2014 study showed that among manufacturing firms in Kenya, 41% used it to manage their inventories, compared to 27% in Zambia and 6% in Uganda. Of service firms in Kenya, 41% used it to manage their inventories, compared to 15% in Zambia, 12% in Uganda, and 8% in Tanzania and the Democratic Republic of Congo.
15. Although governments are keen to leverage digital technology for better results, many public sector digital projects fail. Although data is scarce, various estimates from surveys of government officials, audit reports and country cases suggest about 30% of e-government projects are total failures, with the project abandoned before completion.
16. Another 50-60% are partial failures, with significant budget and time overruns and a limited number of project objectives achieved; fewer than 20% are successes.
17. For example, Maji Matone, which facilitates SMS-based feedback about rural water supply problems in Tanzania, received only 53 SMS messages during its first six months of operation, far less than the initial target of 3,000, and was then abandoned.
18. The high failure rate is possibly because of a large gap between the regulatory, political and skills realities in government, and the ambitions of e-government projects. Others point to the “dangerous enthusiasms” of technological infatuation and faddism for large IT projects.
19. There’s a high geographical penalty for internet access in Africa. In Africa, being landlocked adds an average $232 to the monthly price of fixed broadband access – the average for coastal countries is $206, while for landlocked countries is $438.
20. ICT is one bright spot in Somalia’s economy, which had its fixed telecom infrastructure destroyed by war. With seven mobile operators and multiple internet service providers, the country has a higher penetration rate than its monopolistic neighbours, such as Ethiopia and Eritrea. Some 55% of Somalis used mobile phones to receive remittances; this has become indispensable as other financial channels such as hawalas, have been blacklisted as part of a crackdown on their suspected links to terror.