Afreximbank Report: Digital economy set to contribute $180bn to Africa’s GDP Growth

The African continent is experiencing a transformative digital revolution, as outlined in Afreximbank’s 2023 report, which is enhancing the business environment by boosting productivity, competitiveness, and driving investment.

Mobile technology and services have played a pivotal role, contributing 8% to Sub-Saharan Africa’s GDP in 2021, with additional indirect productivity benefits of 5% in non-ICT sectors.

By the middle of this decade, Africa’s digital economy has the potential to contribute nearly US$180 billion to the region’s overall growth.

These figures exemplify the wide-ranging positive effects of digitalization across various sectors and highlight how technology empowers entrepreneurial thinking. The digital transformation has been instrumental in propelling African start-ups, propelling the region into one of the world’s fastest-growing innovation ecosystems.

Between 2015 and 2022, the number of African start-ups witnessed an impressive surge, multiplying more than fourfold from 125 to 564.

Encouragingly, assessments measuring the impact of digitalization have yielded favorable results. Per the report, when high-quality internet access was available for a minimum of three years, there was a noticeable increase in labor force participation. In Nigeria for instance, labor force participation rose by three percentage points, while Tanzania experienced a remarkable eight-point increase.

According to the report, the digital revolution is expected to sustain growth on the continent in the coming years, particularly as countries adopt innovative solutions developed during the current information and communications technology (ICT) era to unlock their development potential.

Source: norvanreports