Digitalization in Sub-Saharan Africa

Sub-Saharan Africa is rapidly becoming digitally connected and closing gaps with the rest of the world. Digital solutions have taken on added importance as countries grapple with the unprecedented fallout of the COVID-19 pandemic. While countries have leveraged digital solutions and policy responses, the connectivity gap between sub Saharan Africa and the rest of the world suggests that greater digital readiness could have allowed the region to do even more. Analysis conducted before the pandemic found that a one percentage point increase in internet penetration in the region can raise per capita growth by 0.1–0.4 percentage points. There does not appear to be an impact on overall employment, although the share of service sector jobs increases. Evidence suggests that digitalization can help reduce corruption, improve public sector accountability and efficiency, and support financial development. However, digitalization brings new risks (e.g., cybersecurity, business continuity) and challenges to macro-policy making (e.g., monetary policy transmission, changes to the tax base). As attention turns to policies for the recovery, the pandemic will likely serve to accelerate the digital transformation. Policies to enable and leverage greater connectivity include investing in complementary infrastructure and human capital; developing legislative and regulatory frameworks; and supervisory powers to ensure consumer protection and address risks.