Finance Minister Ken Ofori-Atta has indicated that the digital economy that has been championed by the Akufo-Addo administration has come to stay.
He explained that the digital economy will effectively represent 5.9% of African GDP growing to approximately 8.8% by 2050.
“Digital economy is here, and it is here to stay. The IFC and google estimate that by 2025, the digital economy could contribute hundred and eighty billion a year to the African economy. Increasing to seven hundred and twelve billion a year by 2050. Assuming GDP growth is sustained at 45% a year by 2025.
“The digital economy will effectively represent 5.9% of African GDP growing to approximately 8.8% by 2050.
“Across the African continent, the relentless spread of network sensors at which intelligence and automation are already driving a revolution, the same revolution is happening here at home in Ghana,” Mr. Ofori-Atta said during a Business and Policy Dialogue, dubbed, ‘The Kwahu Summit on Africa’s Prosperity’, organized by The African Prosperity Network (APN) in collaboration with the Presidency and the AfCFTA Secretariat, on January 28, 2023.
At the same event, Vice President Dr. Mahamudu Bawumia proposed three broad areas of focus, which he believes will help the AfCFTA to bring about the transformation Africa needs.
Dr. Bawumia said eventhough the AfCFTA has set the stage for the transformation of Africa, its full prospects can only be realised through decisive steps by key African stakeholders, and a focus on some key broad areas he proposed.
“Like the vision of our forebears, the African Continental Free Trade Area has set the stage for Africa’s industrialisation drive, but, it will take concrete, strategic actions by governments and businesses on the continent, the right mix of policies, a greater sense of purpose for more robust intra-African trade to happen to support economic diversification and the much-needed industrialisation of the continent,” Dr. Bawumia said.
To bring about the transformation we need, I propose three broad areas that we need to prioritise,” he added.
“First is the need for smart investments in critical infrastructure. As a continent, we need to produce and trade our way out of poverty and underdevelopment, and we cannot do that without investing in smart infrastructure across the continent. While the last decades have seen some positive investments, there is the need for additional resources to finance the ‘arteries for trade’, which include the physical infrastructure such as roads, rail, and energy; digital infrastructure such as data centres to facilitate the digital transformation and financial infrastructure to allow for integration financial markets.”
These investments, Dr. Bawumia noted, will be critical to delivering the success of the AfCFTA.
The second proposal the Vice President made “is to unleash the productive capacities across the continent.”
“We must create platforms for knowledge brokerage and access to information on critical products and services on the continent to allow 445 million small businesses across the continent to plug into the value chains of these mega industries. We need to develop Africa into a manufacturing zone that will facilitate the trade of value-added products. These, in my view, will be critical to leapfrog Africa’s industrialisation and the enormous socio-economic benefits.”
Dr. Bawumia added that the third broad area of focus should be mobilising finance and investments.
“Africa needs between US$ 130 billion and US$ 170 billion annually to bridge its infrastructure gap and generate sustainable growth at 5% per annum or more. This presents immense opportunities for the private sector investment,” he noted.
“Attracting private sector participation through Public-Private Partnerships (PPPs) is therefore, essential for the delivery of various infrastructure projects. Furthermore, there is a need for innovative policies to mobilise and allocate resources more effectively, and for better coordination amongst all African stakeholders and international partners.”