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Home , Leapfrogging

LEAPFROGGING DEVELOPMENT THROUGH ADOPTION

MWANGI S. KIMENYI & NELIPHER MOYO

lthough agriculture and natural resources has helped to reduce the cost of communication, will continue to be important drivers of increase market information, formalize capital, in- AAfrica’s in 2011, it is the crease productivity, and facilitate capital accumula- application of modern that will have tion in Africa. Th erefore, it is now easier to do busi- the most signifi cant impact on the growth trajec- ness in the region. tories of most African economies. Specifi cally, the greatest opportunity for growth will come from Th e most striking advances in ICT have been in technological and the adoption of new the use of technology. Africa is now technologies in services sectors, such as banking, touted as the world’s fastest growing mobile phone insurance, health, and agriculture. New market, as the number of mobile phone subscrip- opportunities have arisen that make it possible for tions increased from 16 million in 2000 to half a bil- low-income economies to leapfrog other countries lion by 2010. One of the areas where technology has by adopting technologies that are suitable to their had a signifi cant impact on the lives of the poor is in specifi c circumstances. Th ose countries that em- mobile banking. have made it possible brace and invest in technology will be able to sustain for millions of poor Africans to have access to fi nan- growth and be competitive regionally and interna- cial services through their mobile phones. However, tionally moving forward. despite the impressive growth rates in Africa over the last decade, the region continues to lag behind In the last decade, Africa saw rapid growth in the the rest of the world in terms of access to fi nancial information and communication technology (ICT) services. Only 1 in 5 households in Sub-Saharan sector, resulting in major transformation of African Africa have access to formal fi nancial services. business operations and processes. Th e ICT sector

The Brookings Institution 13 14 Foresight Africa: The Continent’s Greatest Challenges and Opportunities for 2011

Although mobile banking has the potential to ex- information about market prices at a relatively low tend fi nancial services to Africa’s poorest, it contin- cost. ues to be underutilized in many countries. Evidence suggests that mobile banking has been less success- Technology also presents business opportunities ful in countries that do not have a widespread na- for Africa’s entrepreneurs. Wages in emerging mar- tional identifi cation system. Th erefore, it is critical kets have been increasing, which makes Africa well that African governments invest in national identi- placed to become the next signifi cant destination fi cation systems in order to reap the benefi ts of mo- for outsourced IT services. Th e region has a large bile banking. Indeed, having an identity is becoming English- and French-speaking population that is increasingly more important as Africa enters the literate in information technology and earns wages digital age. much lower than its counterparts in India and Chi- na. Th ese factors make Africa an ideal destination for ICT outsourced jobs. Exploiting these oppor- Mobile phone technology also has the potential to tunities promises to be very important in boosting transform the delivery of health services in Africa. growth in 2011. About 64 percent of Sub-Saharan Africans live in rural areas where health services are scarce. Mo- PUBLIC‐PRIVATE PARTNERSHIPS TO bile-health, or m-health, could improve the health CLOSE THE of millions of Africans at a fraction of the cost of While there has been tremendous progress in the traditional delivery methods through more effi cient last decade, Africa’s adoption of modern technology transmission of information about drugs, diagnosis still lags behind other nations. For many countries, and faster identifi cation of disease outbreaks. investments in new technologies have been largely Although the agricultural sector is important for neglected. Underinvestment in technology in Africa growth and development in Africa, agricultural represents serious market and government failures productivity in Africa remains far below the region’s that can be overcome through public-private part- potential. One of the most eff ective ways to increase nerships. African governments must invest in im- agricultural productivity in Africa is through the proving the business climate and more specifi cally, use of high-yield seed varieties. In a recent study, the regulatory environment. Th ey should also invest the African Development Bank found that the use in complementary infrastructure, such as roads and of high-yield variety seeds and fertilizers would in- electricity, in order to take advantage of and have crease cereal production by 75 percent in Africa. Use proper access to new technologies. Th ere is scope to of new high-yield seed varieties, chemical fertilizers utilize public and private partnerships especially as it and other inputs must be prioritized if Africa is to pertains to large infrastructural projects, such as ex- achieve higher growth rates and food security. Tech- tending fi ber optic cables. Also critically important nology off ers the opportunity to transmit important is to increase investments in and extension information about new seeds, new inputs and also services to improve access to information of clients, such as farmers and patients. Technological innova- The Brookings Institution 15

tions must be prioritized by African governments so that accelerated and sustainable growth can be achieved in 2011.

SELECTED REFERENCES Kimenyi, Mwangi S. and Njuguna S. Ndung’u (2009). “Expanding the Financial Services Frontier: Lessons From Mobile Phone Banking in Kenya,” Brookings Institution Publication.

Moussa, Sami Zaki (2002). “ for Agriculture Growth in Africa,” Abidjan: African Development Bank.

OECD, AfDB and UNECA (2009). Th e African Eco- nomic Outlook (AEO) 2009 on Innovation and New Technologies in Africa, OECD Printing Press.