Nigeria, Others Not Prepared For Digital Economy – World Bank

The President of the World Bank Group, Dr. Jim Yong Kim, has said policy makers in Nigeria and other African countries are ill-prepared to compete in the digital technology space, expressing concern over the continent’s low level of investment in human capital.

Kim, who made the statement at the 2018 IMF/World Bank spring meetings opening press conference in Washington D.C., pointed out that investment in human capital would assist Nigeria and others in the region to drive growth.

The World Bank chief also lamented the rising level of public debt in the region.

“We are extremely concerned that many African countries are not prepared to compete in what is increasingly becoming a digitalised economy.

“We also see evidence that many of the low-skilled jobs will be taken over by technology and there is also tremendous hope for technology in many African countries.

“We just have to find new ways of driving economic growth. There is no getting away from the need to invest much more effectively in health and education,” he said.

Kim said there was need to adequately prepare youths on the continent to be able to compete favourably with their peers from other continents in the future.

According to him, “Human capital is a huge issue. If we look at all the difficulties in terms of increasing resources for targeted infrastructure like roads and energy, we also need to look at increasing investments in human capital.

“I think every African country has to look more seriously at how to increase its own domestic resources. In other words, they should be better at collecting taxes.

“To provide basic resources, every country should collect at least 15 per cent of tax-to-GDP. Many countries have not reached that level. Also, if African countries were to remove fossil fuel subsidy that are regressive, helping the rich more than the poor.

“Even some agricultural subsidies are regressive, they don’t help the small holding farmers.”
In his opening remarks, Kim noted that the global economy was showing solid momentum.

He said the World Bank had projected global growth to edge up to 3.1 per cent in 2018 – its strongest performance since 2011 – as the recovery in investment, manufacturing, and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.

“The challenge now is to ensure that strong growth will translate into inclusive growth, so that the benefits of global economic integration are enjoyed by all members of society.

“This period of robust growth is a great opportunity to invest in human and physical capital. Filling infrastructure gaps, improving education and health outcomes, and increasing female labour force participation could continue to drive growth.

“If policy makers around the world focus on these key initiatives, they can increase their countries’ productivity, boost workforce participation, and move closer to the goals of ending extreme poverty and increasing shared prosperity,” he added.
In a related development, the Founder of the Tony Elumelu Foundation (TEF) Thursday pointed out that without the development of critical infrastructure on the continent, it would be difficult to achieve a successful digital economy.

Elumelu, who spoke during a session on Digital Technology, which was moderated by the World Bank president, said: “The truth is that the population of Africa presents opportunities. We have 60 per cent of our working population at the age of 30 and we have 65 per cent of our economy in the informal sector.

“But this presents quite interesting opportunities for a digital economy. In my interactions with young Africans, I have seen people who are determined, energetic, hungry to succeed and make a difference and are extremely intelligent, but the environment makes it difficult for them to succeed.

“You can’t talk about a digital economy in Africa without fixing critical infrastructure. Digital connectivity is a major issue in Africa and you can’t fix it if you don’t have reliable access to electricity.

“So, if we want to truly address the issue of a digital economy in Africa, these challenges have to be fixed.

“Secondly is the issue of governance. Governments need to understand that if we prioritise the young ones and make the operating environment conducive, they would be able to optimise the required intellect, they would do well, and we would be able to solve some of the problems on the continent.”

Elumelu, who is also the Chairman of the United Bank for Africa Group, also highlighted regulation, intellectual property and the need to incentivise investors, as other factors that would help drive the digital economy on the continent.
“For the entrepreneurs in Africa, I will say let’s not look at the challenges, but the opportunities. There are lots of opportunities in the continent and we need to look at these opportunities.

“Let’s fix policy issues and all these issues I have identified and investors will come to Africa,” Elumelu added.