African Digitalization Maturity Report 2017 - Digital Asset ...

 
African Digitalization Maturity Report 2017 - Digital Asset ...
African
Digitalization
Maturity
Report
2017
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African Digitalization Maturity Report 2017 - Digital Asset ...
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                                                                  INDEX (Click on categories to navigate)

                                                                    Disclaimer

                                                                    Foreword

                                                                    Introduction

                                                                    Research Methodology
This document is based on statistical research and contains
prognoses and personal views. The statements made in this
                                                                    Country Analysis
document furthermore are of a general nature and not intended
as a guideline for business decisions.
                                                                    Industry Analysis
Siemens neither assumes responsibility for the correctness or
completeness of the statements made in this document, nor any       Industry Analysis: Manufacturing
liability for loss or damage suffered in reliance on any of the
statements made in this document.                                   Industry Analysis: Energy

                                                                    Industry Analysis: Transport

                                                                    Key insights and recommendations

                                                                    Conclusion

                                                                    Glossary of terms

                                                                    References
African Digitalization Maturity Report 2017 - Digital Asset ...
Foreword
                            Driving African development through smarter technology
                            The world has never been so closely linked           customer offerings is to be expected.                     a broader energy mix is the distribution of
                            – or as digital – as it is today. Digitalization     While we are seeing growing adoption of                   populations across African countries. The
                            has found a home in everything from                  advanced analytics within certain industry                cost of transmission to customers is excessive     INDEX (Click on categories to navigate)
                            personal devices to complex industrial               sectors, such as the automotive sector, the real          and there is therefore a bias to decentralized
                            systems. Our world is taking on a digital            opportunity lies in sectors where it has not yet          distributed power.                                   Disclaimer
                            dimension wherever you look.                         been explored.
                                                                                                                                           In the transport industry, digitalization can        Foreword
                            But what does this digital world look like           Manufacturing, while the most mature in                   facilitate the moving of people and goods from
                            in the African context? Is it on the same            its transformation and adoption of digital                an efficiency, customer experience and safety        Introduction
                            trajectory as developed economies? Is it right       technologies in Africa, remains a marginal                perspective. Never before has technology
                            to assume it is playing catch-up or is there an      player struggling to make a bigger impact on              complemented transport so eloquently.
                                                                                                                                                                                                Research Methodology
                            opportunity for digitalization on the continent      country GDPs. The question governments                    Data, and the ability to interpret it is as much
                            to create its own route to developing new and        need to ask themselves is how they align a                a part of the transport ecosystem as roads
                            transformative technologies that ultimately          ‘here-and-now’ emphasis on job creation with              and rails. Digitalization has the potential to       Country Analysis
                            increase the competitiveness of Africa’s             the necessary focus on digitalization. This               turn predictive maintenance into real-time
                            economies?                                           will enable Africa to create a niche within the           monitoring and allow transport operators             Industry Analysis
                                                                                 global economy. If we fail to pro-actively select         across the continent to deliver services
                            If Africa is to compete in the digital               our place within the global manufacturing                 efficiently and safely.                              Industry Analysis: Manufacturing
                            age, we need to shift our traditional                industry we run the risk of continuing on this
                            thinking. Competing against each other               path of non-industrialization.                            For Siemens, digitalization is much more than        Industry Analysis: Energy
                            is counter-productive. The collaboration                                                                       a business field; it is a growth driver. With
                            between government, business (local and              In the energy industry, a stable supply of                our broad range of offerings across energy,
                                                                                                                                                                                                Industry Analysis: Transport
                            international), labor and academia has the           electricity is critical for digitalization to flourish.   manufacturing and transportation, we’re
                            ability to change mindsets, implement policy         By providing high levels of infrastructure and            ideally equipped for the era of digitalization.
                            and create an environment for knowledge              power supply Africa will be able to attract the           We have much to offer Africa.                        Key insights and recommendations

Sabine Dall’Omo             sharing and execution.                               necessary investment across various industry
                                                                                 sectors. Diversification of energy is critical.           It is against this backdrop that Siemens has         Conclusion
Siemens CEO, Southern and   With these shifts it is possible and highly likely                                                             collaborated with an external service provider
Eastern Africa              that digitalization will happen quite rapidly        Based on the report’s findings, the                       to conduct a Digitalization Maturity Report          Glossary of terms
                            in Africa, and bring about developmental             understanding of energy diversification                   in Africa. The findings from the study are
                            changes on the continent. One need only look         across the continent is not very high. In some            just a starting point. We hope it will begin a
                                                                                                                                                                                                References
                            at the impact of cellphone technology and            countries, paraffin lamps are considered as               dialogue and provide a frame to some of the
                            smart phones in Africa to see how innovation         alternative energy sources indicating the                 unique opportunities that exist. We hope you
                            can leapfrog older technologies at an almost         level of gaps in infrastructure which exist.              enjoy reading through the findings and look
                            breathtaking speed.                                  However, to a greater extent, countries are               forward to sharing further insights related to
                                                                                 beginning to realize they can no longer rely on           specific countries and industries.
                            Varied levels of maturity across industries and      one primary source of energy. This thinking
                            markets and the extent of cultural innovation,       is opening up opportunities for a diversified
                            adoption of digital operations as well as digital    energy ecosystem. Also driving the need for
African Digitalization Maturity Report 2017 - Digital Asset ...
Introduction
Digitalization refers to leveraging digital            business models, are integrating their digital
technology and insights from data for concrete         strategy with the organization’s overall strategy1.
customer benefits.
                                                       Organizations in Africa are digitalizing, although
In today’s ever-changing business world, competitors   the level of digital maturity is not the same in         INDEX (Click on categories to navigate)
are no longer the traditional large organizations.     all countries. The purpose of this report is to
They are agile organizations and entrepreneurs that    understand the relative degree to which digital is         Disclaimer
are embracing new and exponential technologies to      present within organizations in Africa and assess
compete and disrupt markets through digitalization.    maturity across different industries (manufacturing,       Foreword
Large, established organizations need to create        energy and transport) and countries (Ethiopia,
a business construct and culture that is quick to      Kenya, Nigeria and South Africa).                          Introduction
recognize these challenges; to adapt, innovate
and compete successfully in an ever-accelerating       Ultimately, the question we asked was: “What is
                                                                                                                  Research Methodology
business environment.                                  the state of digital maturity in Africa?” The research
                                                       methodology used has been tailored to assess
Mass market disruption was considered fringe           digitalization-relevant macro-economic, micro-             Country Analysis
science for a long time. However, disruptive           economic and industry-specific indicators for Africa.
technologies and business models have become                                                                      Industry Analysis
a common discussion around the boardroom               There is an opportunity for developing nations
table. These technologies need to be enabled           to understand how digitalization can assist in             Industry Analysis: Manufacturing
by strategically aligning the development of           solving challenges which are often unique to the
digital capabilities of the organization’s people,     continent. The findings from this report can be used       Industry Analysis: Energy
culture, activities and structure to fundamentally     by industry professionals, and government-owned
dematerialize traditional concepts of products,        entities operating within industry, to understand
                                                                                                                  Industry Analysis: Transport
services and knowledge. Digitally advanced             considerations when approaching digitalization in
organizations, where digital technology has            Africa
transformed processes, talent engagement, and                                                                     Key insights and recommendations

                                                                                                                  Conclusion

                                                                                                                  Glossary of terms

                                                                                                                  References
African Digitalization Maturity Report 2017 - Digital Asset ...
Research Methodology
                                      5
      Macro-
    Economic                   Infrastructure
    Indicators                                                                                                                        INDEX (Click on categories to navigate)
                     9                                  7                            10                                                 Disclaimer
                 Environment                    Digital Literacy                Manufacturing
                                                                                                                                        Foreword
                                     4                                                               10
      Micro-                     Economic                            Digital
                                                                                                  Transport                             Introduction
    Economic                                                        Industry
    Indicators                   Maturity                          Indicators                   (Road & Rail)
                     4                                  4
                   Products
                                                                                     8                                                  Research Methodology
                                                   Culture of
                 & customer                                                        Energy
                                                  innovation
                 engagement                                                                                            KEY:             Country Analysis
                                     4                                                                        Country Specific
                                   Core                                                                   Organization specific         Industry Analysis
                                 operations
                                                                                                              Industry specific
                                                                                                                                        Industry Analysis: Manufacturing
                                                                                                   Number of Digital indicators   #
                                                                                                                                        Industry Analysis: Energy
Figure 2: Research methodology overview

                                                                                                                                        Industry Analysis: Transport
Digital Maturity Assessment (DMA) Approach
The research conducted combined both primary and            C-suite, engineering and technical roles across the                         Key insights and recommendations
secondary methods within Africa. The primary research       manufacturing, energy and transport industries. Limited
tool was made up of an assessment that included             responses from the other African countries were received                    Conclusion
questions to understand organization and industry-          and were discounted from the findings. Qualitative
specific digital indicators. The assessment was sent        interviews were conducted with industry representatives                     Glossary of terms
to existing and potential Siemens’ customers across         from Siemens and an external service provider across
South Africa, Nigeria, Kenya and Ethiopia. The method       South Africa, Nigeria, Kenya and Ethiopia. The purpose                      References
of contact included both email and SMS with the             was to validate research findings and gather insight into
assessment being accessible for completion on PCs or        the relative potential state of digital maturity in Africa.
mobile devices.
                                                            Respondents’ and interviewee’s inputs and insights were
105 responses were received from South African              kept confidential and as such stakeholders have not been
organizations with respondents being in ownership,          cited nor directly referenced in this report.

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African Digitalization Maturity Report 2017 - Digital Asset ...
Research Methodology
Country Analysis
To assess the readiness of South Africa, Nigeria, Kenya and Ethiopia      and publications produced by the following international
to capitalize on digitalization, we created a macro-economic digital      organizations and firms:
maturity assessment (DMA) comprising of 26 individual indicators                                                                         INDEX (Click on categories to navigate)
                                                                             International Monetary Fund (IMF)
grouped into four pillars:
                                                                             World Economic Outlook, October 2016                          Disclaimer
1 Economic Maturity: size, growth and sophistication of the
  economy.                                                                   World Economic Forum (WEF) Global Information Technology
                                                                             Report, 2016                                                  Foreword
2 Environment: the extent to which the business, legal and
  regulatory environment is conducive to digitalization.                     United Nations Development Programme (UNDP) Human
                                                                             Development Index, 2015                                       Introduction
3 Infrastructure: the extent of Information and Communication
  Technology (ICT) infrastructure that is currently in place for             GSMA Mobile Intelligence, various publications
                                                                                                                                           Research Methodology
  connectivity as well the affordability and use thereof.                    World Bank, Doing Business Survey 2016
4 Skills and Digital Literacy: the extent and quality of a                   Facebook penetration rate
                                                                                                                                           Country Analysis
   country’s human resources and current use of digital                      ITU, various publications
   technology and platforms.
                                                                             Alliance for Affordable Internet (A4AI)                       Industry Analysis
Data for the individual indicators were sourced from surveys
                                                                             Harvard Atlas of Economic Complexity, 2014
The computation of the overall DMA score is based on the following formula: Macro-economic DMA = Average                                   Industry Analysis: Manufacturing
(Economic Maturity + Environment + Infrastructure + Skills & Digital Literacy)
                                                                                                                                           Industry Analysis: Energy
Industry Analysis
The industry-specific analysis looked at digital capabilities          3 Established: countries/organizations have reliable digital        Industry Analysis: Transport
which contribute towards digitalization of the industry across           adoption but with room for important advances in some
a micro-economic and industry-specific perspectives. Levels of           areas. Where quantified, agreement or strong agreement            Key insights and recommendations
digitalization were classified into four maturity levels:                to indicators were found to be between 65 and 90 percent.
                                                                       4 Advanced: countries/organizations were categorized as             Conclusion
1 Emerging: countries/organizations are facing critical
                                                                         having very high-levels of digital maturity and adoption.
  challenges in pursuing digital transformation in basic
                                                                         Where quantified, Agreement or Strong Agreement to                Glossary of terms
  aspects. Where quantified, agreement or strong agreement
                                                                         indicators were found to be >90 percent.
  to indicators were found to be
African Digitalization Maturity Report 2017 - Digital Asset ...
Research Methodology
Industry Analysis continued
                                                                  digitalization objectives. Performance frameworks, and
In this state of maturity, organizations create a culture         setting of associated personal and business objectives that
of innovation according to a defined digital vision across        take into account both linear/analogue/legacy and new digital     INDEX (Click on categories to navigate)
executive leadership. The vision includes direction and           elements of the organization, are defined and supported by
clarity about the position the organization seeks within the      activities related to the training and increasing of awareness      Disclaimer
digital ecosystem (e.g. platform, provider, retailer, etc.).      needed to deliver in a digitalized environment.
Furthermore, buy-in and oversight from executives for                                                                                 Foreword
developing a leading digital business is present and includes     Agile and proactive development of new and existing products
visible commitment, linkage to overall corporate objectives       with a focus on innovation is found. In Advanced maturity           Introduction
and executive metrics linked to digital initiatives.              organizations, these product approaches are taken in relation
                                                                  to customer or consumer billing and account management to
                                                                                                                                      Research Methodology
Once executive leadership is aligned, there is a transition to    ensure a well-coordinated product and service strategy. These
digitalization that is supported by a strategic approach and      strategies are in turn supported by coherent and consistent
roadmap that balances transitioning from the legacy business      approaches to process and workflow, across the core value           Country Analysis
to the digital business. These advanced organizations typically   chain, in order to support the creation and distribution of
engage with outside entities to shape standards and practices     both legacy and new products. Inclusion of digital strategy in      Industry Analysis
to support the business’s product and market objectives. The      overall technology and infrastructure planning and decision
organization has robust financial budgeting and support and       making is also paramount. Underpinning the process, is              Industry Analysis: Manufacturing
prioritizes digitalization business cases as they emerge.         a technology architecture that considers both digital and
                                                                  physical strategy architecting for agile, extensible and open       Industry Analysis: Energy
The organization’s business model is defined and matches          technology environments. Architectures are designed to
product offerings coordinated across digital and physical         evolve as required by the organization including rapid scaling
                                                                                                                                      Industry Analysis: Transport
platforms, to avoid cannibalization. There is often a strategy    in support of new business models, products and platforms.
for pricing digital offerings across channels and/or platforms,
taking existing, new, and future offerings as well as routes to   Finally, Advanced maturity organizations within the energy,         Key insights and recommendations
market into account. The business model strategically targets     transport and manufacturing industries have industry-unique
customer segments and includes cross-segment marketing            characteristics. Assessment of digital maturity was based on        Conclusion
campaigns with separate but coordinated physical and              understanding the extent of individual and combined states
digital segmentation approaches. Business model evolution         of Electrification, Automation and Digitalization per industry.     Glossary of terms
is supported by analysis of customer and consumer data and        This concept to approach digitalization is used by Siemens and
behavior to identify and realize revenue, margin or other         practically allows organizations to progress their maturity.
                                                                                                                                      References
brand-value opportunities across all customer engagement
platforms.                                                        As an example, digitalization of the manufacturing industry
                                                                  has progressed through different levels of industrialization.
Employees in Advanced state organizations are a key               Once production is electrified and automated, digitalization
ingredient to their success. These organizations are able to      can be achieved by connecting machinery in a ‘smart’ way and
proactively evaluate, determine, acquire, retain and reward       allowing software to intelligently improve productivity, speed
the roles and responsibilities required in order to meet          and flexibility of production.
African Digitalization Maturity Report 2017 - Digital Asset ...
Country Analysis
Much has been said, in recent years, about the influence         related and knowledge-intensive activity takes place
of information and communication technology, or ICT,             which in turn, drives the demand and uptake of digital
on economic growth and social development. The World             technology.
Economic Forum Global Information Technology Report2
suggests that the global economy is entering a fourth            The second pillar, Environment, is a measure of the              INDEX (Click on categories to navigate)
industrial revolution, driven by exponential growth in           extent to which the country has a business, legal and
the adoption of digital technology and unprecedented             regulatory environment that supports and protects                  Disclaimer
increases in access to knowledge and innovation in data          the development of digital business. Here we have
processing and storage capabilities.                             included indicators such as the overall ease of doing              Foreword
                                                                 business, ability to enforce contracts, the presence
Countries that embrace new technological developments            and enforcement of ICT-related laws, the protection                Introduction
and deal with risks strategically are more likely to prosper     of intellectual property and evidence of ICT-related
and achieve inclusive growth. However, those who do              innovation and start-up activities.
                                                                                                                                    Research Methodology
not foster an environment in which digital technologies
can flourish are likely to fall behind. They run the risk        The third pillar, Infrastructure, assesses the extent to
of facing increasing inequality and greater chances of           which the country has invested in the ICT infrastructure           Country Analysis
economic divisions.                                              that is required to support the digital economy. Here
                                                                 we have included indicators on access to and use of                Industry Analysis
The aim of this chapter is to assess the ability of selected     infrastructure, as well as affordability. Indicators include
sub-Saharan economies to capitalize on digitalization            access to international bandwidth, mobile-network                  Industry Analysis: Manufacturing
given the prevailing macro-economic and business                 coverage, internet and mobile-phone penetration, the
environment. The countries that have been included are           costs of broadband and mobile-phone access.                        Industry Analysis: Energy
the largest economies in Sub-Saharan Africa (SSA) viz.
Nigeria, South Africa and two East African economies             The fourth pillar, Skills and Digital Literacy, reflects the
                                                                                                                                    Industry Analysis: Transport
(Kenya and Ethiopia, which were identified as countries          human capital endowment of a country. The rationale for
that had recently made great strides in ICT adoption).           including this pillar is that digital technologies flourish in
                                                                 knowledge-based economies which also typically boast               Key insights and recommendations
Composition of the Macro-economic Review                         higher levels of educational attainment and provide
                                                                 better quality education. The current use of common                Conclusion
The first pillar, Economic Maturity, is an assessment of         digital platforms such as social media also provide an
the size, growth and sophistication of the economy.              indication of how ‘digitally literate’ the population is.          Glossary of terms
The rationale for the inclusion of this pillar is that digital
technologies are likely to be more rapidly adopted in            The computation of the overall DMA score is based on
                                                                                                                                    References
larger and faster growing economies that boast an                normalized scores of individual indicators.
established or growing middle class (proxied roughly as
GDP per capita).                                                 This is done by taking an average across the respective
                                                                 categories. Categories are aggregated into the four sub-
In addition, the more sophisticated the economy                  indices which are then averaged to produce the overall
the more likely it is that a diverse range of services-          DMA score.

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African Digitalization Maturity Report 2017 - Digital Asset ...
Country Analysis
Where possible, the country scores per indicators       Global benchmark depending on the indicator. Equal
have been normalized relative to the minimum and        weighting has been assumed on all indicators within
maximum score for the full assessment sample,           a category, and all categories within a sub-category.
which varies between a group of between 14
African countries (e.g. for GSMA indicators3), or       The only exceptions are the scores for GDP and
185 international countries (e.g. World Bank Doing      GDP per capita. These were multiplied by 10 to give       INDEX (Click on categories to navigate)
Business Survey4).                                      them a reasonable weight in the Economic Maturity
                                                                                                                    Disclaimer
                                                        pillar score, as all four countries were very distant
The normalized score out of 100 therefore               from the Global benchmark in terms of size of the
represents the distances from either the African or     economy and per capita income.                              Foreword

                                                                                                                    Introduction
  Pillar                        Sub-category          Indicator

  Economic maturity Size and growth                   GDP, current prices, $US billions.                            Research Methodology
  		                                                  Forecast GDP growth rate (2017 to 2012).

                                Complexity            Economc complexity index.                                     Country Analysis

  Environment Digital protection                      Laws relating to ICTs. To what extend does the regulator      Industry Analysis
  		                                                  and/or competitions commission enforce the country’s
  		                                                  ICT licencing requirements and regulations?
                                                                                                                    Industry Analysis: Manufacturing
    Business and                                      Intellectual property protection. Judicial independance.
    regulatory environment                            Overall ease of doing business. Number of procedures
  		                                                  to enforce a contract. Number od days to enforce a            Industry Analysis: Energy
  		                                                  contract. Number od active tech hubs. Tech start-up
  		                                                  funding landscape ($US million).
                                                                                                                    Industry Analysis: Transport
  Infrastructure Access and use                       International internet bandwiths bit/s per internet user.
  		                                                  Unique mobile subscribers, % population.                      Key insights and recommendations
  		                                                  Mobile Netwotk coverage, % population. 3G network
  		                                                  coverage. Percentage of households with internet.
                                                                                                                    Conclusion
    ICT affordability                                 WEF NRI ICT affordability score.
  		                                                  (prices for mobile, broadband and competition).
                                                                                                                    Glossary of terms
  Skills and Digital Literacy   Digital training      Internet access in schools.

                                Digital tools usage   Use of IP messaging. Facebook penetration rate.               References

    Skills                                            Secondary and Tersiary education gross enrolement rate.
  		                                                  Population with some secondary education.
  		                                                  Primary school teachers trained to teach.

Table 1: Summary of the macro-economic assessment indicators

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African Digitalization Maturity Report 2017 - Digital Asset ...
Country Analysis
Overall results
A summary of the overall DMA scores by country, and               South Africa emerges as the country with the highest
scores for each of the four pillars and sub-categories is         potential to realize digital maturity followed by Kenya,
provided in Chart 1.                                              Nigeria and Ethiopia.                                          INDEX (Click on categories to navigate)

                                                                                                                                   Disclaimer
 100
  90                                                                                                                               Foreword
  80                                                                                      82
  70
                                                                                                                                   Introduction
  60
                                                        60
  50                                      55                                                                             53
                                                                                  49                                               Research Methodology
  40                        43                    46                         44
  30          33                                                    33
                                                                                                            38                     Country Analysis
  20    26                          27                                                                             35
                    18                                                                             20
  10
   0
                                                                                                                                   Industry Analysis
        Economic Matirity           Environment                      Infrastructure               Skills & Digital Literacy

                         Ethiopia           Kenya                 Nigeria               South Africa                               Industry Analysis: Manufacturing

Chart 1: Overall DMA Results                   Results from the above chart are discussed in greater detail under each pillar.
                                                                                                                                   Industry Analysis: Energy

Economic Maturity pillar                                   100
                                                                                                                                   Industry Analysis: Transport
                                                             90

The Economic Maturity pillar takes the size,                 80                                                     36
                                                                                                                                   Key insights and recommendations
growth and complexity of the economies                       70

into account. Overall, South Africa ranks                    60
                                                                                        29                                         Conclusion
number one, followed by Kenya, Ethiopia                      50             30                                      51
and finally, Nigeria (Chart 2).                              40
                                                             30                         37             31                          Glossary of terms
There are three components to the size and                   20             22
growth indicator - GDP (current prices, US$                  10                                                                    References
billions), expected GDP growth between                        0
                                                                                                     4
                                                                      Ethiopia         Kenia      Nigeria        South Africa
2017 and 2021, and finally, GDP per capita
(current prices, US$).                                                   Economic Complexity       Size and Growth
                                                          Chart 2: Overall economic maturity pillar results

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Country Analysis

 Forecast GPD growth (2014 to 2017)
                                      100
                                       90
                                       80
                                       70        $686.59 , 7.4                                                                                                 INDEX (Click on categories to navigate)
                                       60              $1 434.36 , 6.4
                                       50
                                                                                                                                                                 Disclaimer
                                       40
                                                                                                                                                                 Foreword
                                       30
                                                                                      $2 763.14 , 2.5
                                       20
                                       10                                                                                                                        Introduction
                                                                                                                               $5 726.88 , 1.8
                                       0
                                                                                                                                                                 Research Methodology
                                            $1 000.000     $2 000.00      $3 000.00       $4 000.00    $5 000.00      $6 000.00     $7 000.00
                                                                       GDP per Capita $US/anum
                                                                                                                                                                 Country Analysis
                                                Ethiopia (GDP $62B)    Kenya (GDP $63B)    Nigeria (GDP $494B)   South Africa (GDP $315B)

Chart 3: Three components (GDP, GDP growth and GDP per Capita) of the Economic Size and Growth indicators                                                        Industry Analysis

The relative performance of the four countries in terms                                      worldwide. On this basis it clarifies why a sizeable economy        Industry Analysis: Manufacturing
of these three measures is summarized in Chart 3. While                                      like Nigeria would be lagging. Unlike South Africa, Kenya
Nigeria has a larger economy than South Africa and is                                        and Ethiopia, Nigeria has a relatively undiversified trade          Industry Analysis: Energy
forecast to grow at a slightly faster rate over the next five                                profile. It is currently experiencing several policy challenges
years, it has a much lower per capita income so comes                                        in diversifying the economy beyond oil.                             Industry Analysis: Transport
second to South Africa. The Ethiopian economy is roughly
the same size as the Kenyan economy but scores slightly                                      McKinsey & Company6 report that Nigeria’s economy, like
                                                                                                                                                                 Key insights and recommendations
higher as it is expected to achieve faster average annual real                               South Africa, is highly reliant on imported technology.
GDP growth (7.2% over the next five years).                                                  However, as part of government’s support for local content,
                                                                                                                                                                 Conclusion
                                                                                             Nigeria is expanding into hardware manufacturing and
The economic complexity indicator provides an indication                                     software development. Nigeria manufactures laptops, and
of the sophistication and diversity of economic activity in                                  is looking to expand into affordable mobile phones for the          Glossary of terms
a country and is taken from the Harvard Atlas of Economic                                    domestic and regional market.
Complexity5. On economic complexity Kenya is strides ahead                                                                                                       References
of both Ethiopia and Nigeria. The Harvard Atlas on Economic                                  Kenya is the largest economy in East Africa. It acts as a
Complexity measures how a country’s total trade dynamics                                     port of entry for goods destined for most East and Central
(imports, exports, growth and emerging industries, etc.)                                     African countries6. Despite this it too faces high levels
change over time. The atlas further explores a country’s                                     of unemployment and inequality. Due to it being a hub
potential for trade growth over the next five to ten years,                                  for trade in the region, it carries a higher ranking than a
and measures this against more than 100 countries                                            country like Ethiopia, which is land-locked and therefore

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Country Analysis
dependent on neighboring countries to support trade.                   significant demographic dividend, means that opportunities
Ethiopia’s geographic position on the continent means that             exist for these countries to grow exponentially. Much of
it is highly reliant on Kenya to facilitate its trade. Eritrea,        this, however, is highly dependent on developing and
Djibouti and Somalia are in conflict (and in most instances            implementing the right polices, legislation, and institutions
under sanction), and extremely under-developed in terms                to take advantage of this potential. These aspects, when        INDEX (Click on categories to navigate)
of industry and trade. It is unclear whether Kenya’s score             grouped with the ICT ‘revolution’, mean that countries like
in the atlas has been adjusted for the trade that would be             Kenya, Ethiopia, Nigeria and South Africa, have the opening       Disclaimer
in-transit to Ethiopia. The 2016 African Economic Outlook7             to leapfrog economic development and compete with more
states that over the next three to five years, economies               developed economies across the globe. Of course, bear in          Foreword
on the continent are expected to continue to strengthen                mind that there are several context-specific indicators that
their business environments, and expand regional markets               work together to create favorable outcomes. Findings in this      Introduction
to benefit from increased intra-regional trade, economies              report should not be taken outside of consideration of these
of scale and lower transaction costs. This, along with a               indicators.
                                                                                                                                         Research Methodology
Environment pillar
                                                                                                                                         Country Analysis

 100
  90                                                                                                                                     Industry Analysis
  80
  70                                                                                                                                     Industry Analysis: Manufacturing
  60                                                                                                                    67
                             53                        53                                       58
  50                                                                                                                                     Industry Analysis: Energy
                                                                                                            50
  40                                     42
  30            30                                                                                                                       Industry Analysis: Transport
  Environment
  20          pillar                                                                23
  10                                                                                                                                     Key insights and recommendations
   0                   Digital Protection                                 Business and Regulatory Environment
                             Ethiopia          Kenya              Nigeria             South Africa                                       Conclusion
Chart 4: Overall results for the environmental pillar
                                                                                                                                         Glossary of terms
Environment in this instance refers to the kind of regulation          that simply by the nature of their lower income status, and
that exists to enable a prosperous ICT sector, as well as              sometimes poor human development indicators, countries
                                                                                                                                         References
the ease of doing business in the country. Investors need              like Nigeria, Ethiopia, Kenya and South Africa do not offer
an environment that allows them to engage in business                  the best returns for investors and entrepreneurs. Chart
activities with a tolerable amount of risk and favorable               4 indicates the rankings of the four countries for digital
return. Ideally, there should be stable institutions, low              protection and the business and regulatory environment.
transaction costs and a flexible regulatory environment that           Digital protection combines indicators for (i) laws relating
lends itself to opportunities for foreign direct investment            to ICTs, (ii) the extent to which regulator or competition
and social entrepreneurship. Anecdotally, it is often believed         commission enforces the ICT licensing requirements

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Country Analysis
and regulations in the country, and (iii) intellectual property        telecoms, retailers, etc.) have stepped in to fill the gap. As a
protection.                                                            result, many services such as bank payments and transfers,
                                                                       billing, and so on are available through mobile and digital
Overall South Africa ranks first, followed by Kenya, Nigeria and       technology.
then Ethiopia. On digital protection South Africa and Kenya both       Existing policies relating to the ICT sector in Nigeria, as stated   INDEX (Click on categories to navigate)
score 53 and sit tied at number one (Chart 4). The government          in the National ICT policy (2012)8, require a review. There are
of Kenya has done a lot towards improving the regulatory               currently, various uncoordinated policies guiding different            Disclaimer
environment for ICT, including removing VAT and import duties          facets of the Nigerian ICT sector. Ethiopia still faces a gap
on handsets in 20096. The private sector, namely Safaricom,            between its ICT ambitions to support economic growth and the           Foreword
has also played a key role by investing in affordable access and       policy and regulatory instruments to enable fulfilment9.
technology literacy6.                                                                                                                         Introduction
                                                                       According to the World Bank Group’s Doing Business survey4,
Similarly, the South African government’s Department of Trade          South Africa ranks 74 out of 190 countries. Nigeria received a
                                                                                                                                              Research Methodology
and Industry (dti) has implemented initiatives to improve the          ranking of 169; Kenya 92; and Ethiopia 159. A high (i.e. closer
ICT environment, albeit within a rather fragmented policy              to one) ease of doing business ranking means the regulatory
environment. For example, the dti partnered with the Business          environment is more conducive to starting and operating of a           Country Analysis
Trust to increase the availability of skills, provide incentives and   local firm. The rankings are determined by sorting the aggregate
attract new investment to launch a successful business process         distance to benchmark scores on ten topics, each consisting            Industry Analysis
outsourcing industry6. This may have partly assisted, but high         of several indicators, giving equal weight to each topic4. The
connectivity costs and poor access in many parts of the country        rankings for economies are benchmarked to June 2016.                   Industry Analysis: Manufacturing
mean that ICT development does little to lower inequality in the
country.                                                               While this survey considers different indicators than what             Industry Analysis: Energy
                                                                       has been included above, it does provide a snapshot of the
Due to several challenges within the ICT policy environment            likelihood of improved digital maturity and its influence on the
                                                                                                                                              Industry Analysis: Transport
in South Africa, as well as service delivery issues experienced        ability of the ICT sector to create the foundation for inclusive
by government, several private sector organizations (banks,            and rapid economic growth.
                                                                                                                                              Key insights and recommendations
Infrastructure pillar
                                                                                                                                              Conclusion
There are two dimensions to the Infrastructure pillar – Access         4 3G network coverage
and Use, and ICT Affordability. In terms of Access and Use,
                                                                       5   the percentage of households with internet access                  Glossary of terms
South Africa ranks first, followed by Nigeria, then Kenya, with
Ethiopia lagging far behind with a score of 7 (Chart 5). The
Access and Use measure takes account of:                               The World Economic Forum’s Global Information Technology               References
                                                                       Report (2015)2 explains that initiatives taken by countries
1 international internet bandwidth bit/s per internet user             to expand inclusive internet can be broken down into two
2 unique mobile subscription as a percentage of the                    groups. The first group is made up of initiatives that facilitate
  population                                                           investments in networks in existing and new areas. These
3 mobile network coverage also measured as a percentage of             may be urban or rural, but mostly urban. The second group
  the population                                                       comprises plans and projects that increase the unconnected

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Country Analysis

 100
  90                                                   94
  80                                                                                                                               INDEX (Click on categories to navigate)
  70
                                                                                                                       70            Disclaimer
  60
                                                                                 60
  50                                                                                          55             55
                                                                                                                                     Foreword
  40                                      43
  30                        33
  20                                                                                                                                 Introduction
 Environment
 10
             pillar
   0
                7                                                                                                                    Research Methodology
                         Access and Use                                                            ICT Affordability
                            Ethiopia           Kenya              Nigeria           South Africa                                     Country Analysis
Chart 5: Overall results for the infrastructure pillar
                                                                                                                                     Industry Analysis
population’s demand for internet services. In many parts           inhabitants, let alone providing internet connectivity.
of the continent, a huge divide exists between well-               The United Nations Human Rights Council passed                    Industry Analysis: Manufacturing
connected urban centers and off-the-grid rural areas.              a resolution in June that condemns countries that
                                                                   intentionally take away or disrupt its citizens’ internet         Industry Analysis: Energy
While several individuals in SSA may own more than                 access. Central to this resolution is the argument that
one phone, most mobile phones are still of the older               internet access is a basic human right10. There is therefore      Industry Analysis: Transport
generation. The 2016 smartphone penetration for Africa is          a role for government and the private sector to roll-out
30% compared to a 51% global average3.                             internet access to rural centers in the same way that
                                                                                                                                     Key insights and recommendations
                                                                   traditional infrastructure – like basic services, sanitation,
This creates limitations around the penetration of more            transport and energy – are delivered.
modern applications and uses for mobile technology.                                                                                  Conclusion
Places like Kenya, however, have progressed towards                Furthermore, ICT infrastructure providers need to be aware
creating old-generation-friendly services to facilitate more       that as urbanization happens, population growth takes             Glossary of terms
inclusive infrastructure for the population.                       off, progressively opportunities become available through
                                                                   city development and the urban-rural mix changes11.               References
Africa’s rapid urbanization represents an opportunity for          This means that the needs of the population change. As
the extension of information technology and improvement            a result, ICT infrastructure foundations should be flexible
of digital maturity. However, as we have seen in places            enough to provide for these opportunities and take
like Johannesburg, Lagos, Nairobi and Addis Ababa,                 advantage of changes in the structure of economies (both
urban hubs are often unable to cope with the influx of             formal and informal).

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Country Analysis
The second element of the Infrastructure pillar is ICT            the information technology sector.Even though South
Affordability. According to the World Economic Forum’s            Africa ranks number one in this category in comparison
Networked Readiness Index ICT12 affordability score,              to more developed countries, the cost of internet access
South Africa also ranks number one, followed by                   is still relatively high particularly in relation to mobile
Ethiopia, and Kenya and Nigeria tied in third.                    data and broadband. Service providers argue that, in          INDEX (Click on categories to navigate)
                                                                  terms of the mobile network, prices are kept high to
This may very well have to do with the penetration                maintain connectivity speeds.                                   Disclaimer
of smart phones in the South African and Nigerian
market, as well as the number of service providers. This          The cost to service providers is minimal but by lowering        Foreword
ranking includes measures of the price for mobile and             the price, the network would be unable to support the
broadband connectivity, as well as competition within             demand for access.                                              Introduction

Skills and Digital Literacy pillar                                                                                                Research Methodology

 100                                                                                                                              Country Analysis
  90
  80
                                                                                                                                  Industry Analysis
  70
  60                                                                                                               65             Industry Analysis: Manufacturing
  50                                                                          58
  40         45      48                                              47                                43
                                                                                                                                  Industry Analysis: Energy
  30                        33       37
  20                                                         23                                               24
  10
                                                                                                                                  Industry Analysis: Transport
                                                                                               13
                                                    2
   0
                  Digital Training                Digital Tools usage                                Skills                       Key insights and recommendations
                             Ethiopia         Kenya                 Nigeria           South Africa

Chart 6: Overall results for the skills and digital literacy pillar                                                               Conclusion

The Skills and Digital Literacy pillar consists of three           measure of the availability of internet at schools, but        Glossary of terms
categories, Digital Training, Tools Usage and Skills which         educational attainment in Ethiopia is quite low. For
is a measure combining educational attainment with                 example, only 12.5% of the population over the age
                                                                                                                                  References
some indication of the quality of education provided in            of 25 years reported that they have some secondary
each country.                                                      (high school) education. Use of digital tools such as
                                                                   Internet Protocol (IP) messaging and Facebook is also
South Africa ranks first once again, followed by Kenya             relatively low. Only 5% of the population of Ethiopia are
then Nigeria and finally Ethiopia. Ethiopia does relatively        reported to use Facebook while less than 10% use IP
well in providing digital training which is proxied by a           messaging services which is one of the lowest figures

                                                         Continue
Country Analysis
among the 14 African countries surveyed by GSMA3                    international benchmark for educational attainment.
(hence the low normalized score of two). This calls                 This is particularly evident in the gross tertiary
for action to be taken to provide access to the internet            education enrolment rate which is 4% for Kenya and
and make the shift to smartphones more affordable                   20% for South Africa compared against an international
in these countries. Kenya and South Africa fare much                maximum score of 98% and minimum score of 2%.
better than Nigeria and Ethiopia when it comes to                                                                                  INDEX (Click on categories to navigate)
educational attainment with scores of 43 and 65                     Kenya achieved the highest score in Digital Training
                                                                                                                                     Disclaimer
respectively. The scores however are well below 100,                which was reflective of the high indicator scoring found
meaning that both countries are still quite far off the             in relation to internet access in Kenyan schools.
                                                                                                                                     Foreword
Summary of DMA scores by country
                                                                                                                                     Introduction
 Summary of DMA scores                                                     Ethiopia       Kenya        Nigeria      South Africa
                                                                                                                                     Research Methodology
 Economic                 Assessment of size, growth and
 Maturity                 sophistication of the economy                      27            55           46            60             Country Analysis

                                                                                                                                     Industry Analysis
                          Extend to which the country has a
                          business, legal and regulatory
 Environment              environment that supports and protects             33            44           49            82             Industry Analysis: Manufacturing
                          the development of digital business
                                                                                                                                     Industry Analysis: Energy
                          Infrastructure: extent to which the
 Infrastructure           country has invested in ICT infrastructure         20            39           37            55             Industry Analysis: Transport
                          required to support the digital economy

                                                                                                                                     Key insights and recommendations
                          Digital literacy and skills: assessment
 Digital
 Literacy                 reflecting the human capital                       26            33           18            43             Conclusion
                          endowment of a country

                                                                                                                                     Glossary of terms

 Country Macro-economic DMA                                                 26            43           37            60              References

Figure 3: Summary of country macro-economic Digital Maturity Assessment
A summary of each country’s DMA scores relative to the international or regional benchmark (i.e. score of 100) as
well as the average score achieved by the four countries is provided in the figures that follow

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Country Analysis
South Africa
                                Digital
                                                                               access to the internet (which is defined as access any time over
                              protection                                       mobile phone or computer).
                                                                                                                                                                  INDEX (Click on categories to navigate)
                                                           Business and        Despite the roll-out of initiatives to connect schools to broadband
       Complexity                                          regulatory          by government in Gauteng and Western Cape, most schools                              Disclaimer
                                                           environment
                                                                               do not have internet access in the classrooms. The Gauteng
                                                                               government’s ‘Gauteng Online Schools Programme’13 project                            Foreword
                                                                               launched in 2002 aimed to connect 100% of schools in the
 Size and                                                          Access
                                                                               province. However, an internal audit of the R1 billion programme                     Introduction
  Growth                                                           and Use     revealed that the appointed contractor fell short of delivering
                                    0                                          on its mandate in many respects. The Gauteng Government
                                                                                                                                                                    Research Methodology
                                                                               is currently busy with the roll-out of a provincial broadband
                                   20                                          network to several government buildings and hopes to migrate
                                                                               the school programme onto the new network in time.                                   Country Analysis
                                   40
      Skills                                                    ICT
                                   60                          Affordability   The Western Cape government in partnership with Neotel and                           Industry Analysis
                                                                               the Cape Digital Foundation (a government agency) aims to
                                   80                                          connect all schools in the province with broadband. By March                         Industry Analysis: Manufacturing
                    Digital                     Digital
                                                                               2016 it had connected over 692 schools and created 3,300 smart
                                   100
               Tools Usage                      Training                       classrooms.                                                                          Industry Analysis: Energy

                         Average        South Africa                           South Africa is relatively close to the international benchmark
                                                                                                                                                                    Industry Analysis: Transport
                                                                               in the areas of ICT Affordability and the general Business and
Chart 7: Summary of South Africa’s DMA Scores in each
category relative to four-country average                                      Regulatory environment. South Africa scores close to 70 out
                                                                               of 100 on both counts. The WEF’s ICT Affordability measure                           Key insights and recommendations
South Africa scores above the four-country average in all areas                includes prepaid mobile cellular tariffs in PPP $/min* , fixed
except for Digital Training (internet access in schools). South                broadband Internet tariffs in PPP $/month** and a measure of                         Conclusion
Africa’s score is very close to the international benchmark in                 competition in the internet and telephony industry12.
the area of Access and Use. This is largely because of very good               While mobile data and broadband costs in South Africa have                           Glossary of terms
mobile network access. The South African population has 100%                   fallen substantially in recent years, an assessment by the SA
mobile network coverage and 93% have 3G coverage.                              Institute of Race Relations in 2015 suggested that the average
                                                                                                                                                                    References
                                                                               monthly mobile broadband fees in South Africa were still 10
In terms of mobile phone usage, South Africa also does well                    times higher than those in the United Kingdom and 5 times
by international standards. The number of unique mobile                        higher than American fees with lower levels of service offered14.
subscriptions are 71% of the adult population. However, when it                * Prepaid mobile cellular tariffs in Purchasing Power Parity (PPP) $ per minute
comes to internet access, only 37% of households have consistent               ** Fixed broadband Internet tariffs in Purchasing Power Parity (PPP) $ per month

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Country Analysis
Nigeria
                                Digital
                                                                                 A survey by GSMA on the mobile economy in Africa3
                              protection                                         suggested that nearly 50% of Nigerians make use
                                                                                 of Internet Protocol (IP) messaging services (e.g.         INDEX (Click on categories to navigate)
                                                             Business and        WhatsApp, Snapchat, and WeChat), while 12% make
       Complexity                                            regulatory          use of Facebook.                                             Disclaimer
                                                             environment

                                                                                 It is interesting to note that while Nigeria scores much     Foreword
                                                                                 lower on the access and use measure than South
 Size and                                                            Access
                                                                                 Africa (a score of 44 as opposed to 94), the proportion      Introduction
  Growth                                                             and Use     of Nigerians using IP messaging is the same as it is in
                                    0                                            South Africa (close to 50%).
                                                                                                                                              Research Methodology
                                   20                                            Taking a closer look at the access and use indicators
                                                                                 for Nigeria, it is apparent that close to 100% of the        Country Analysis
                                   40
                                                                                 population has mobile network coverage in Nigeria
      Skills                                                      ICT
                                   60                            Affordability   while 55% have access to a 3G network.                       Industry Analysis

                                   80                                            Internet penetration in Nigeria (defined as consistent       Industry Analysis: Manufacturing
                    Digital                       Digital
                                                                                 access all the time to the internet via mobile or fixed
                                   100
               Tools Usage                        Training                       line) is relatively low at 8.5% of the population.           Industry Analysis: Energy

                         Average        Nigeria                                  Nigeria performs particularly poorly when it comes to
                                                                                                                                              Industry Analysis: Transport
                                                                                 the sophistication or complexity of its economy, with
Chart 8: Summary of Nigeria’s DMA Scores in each category                        a score of less than 10 out of 100. This suggests that
relative to four-country average                                                 it remained too heavily reliant on a single commodity,       Key insights and recommendations

Nigeria only scores above the four-country average in one                        oil, for export revenue.
area – Digital Tools Usage. Nigeria however scores close to,                                                                                  Conclusion
or on the four-country average in the areas of Business and
Regulatory Environment, Digital Protection, ICT Affordability                                                                                 Glossary of terms
and Size and Growth.
                                                                                                                                              References

                                                                 Continue
Country Analysis
Kenya
                                Digital
                                                                               exports, growth and emerging industries and so forth)
                              protection                                       change over time. Kenya has a well-diversified economy
                                                                               with services accounting for roughly 60% of GDP.               INDEX (Click on categories to navigate)
                                                           Business and
       Complexity                                          regulatory          Tourism is Kenya’s largest services industry and a               Disclaimer
                                                           environment
                                                                               mainstay of the economy but the country also has a
                                                                               relatively large and diverse agricultural industry. As the       Foreword
                                                                               largest economy in East Africa, Kenya is also a vital port
 Size and                                                          Access
                                                                               of entry for goods destined for most East and Central            Introduction
  Growth                                                           and Use     African countries6 and while its manufacturing industry
                                    0                                          only accounts for 14% of GDP it is the largest in the
                                                                                                                                                Research Methodology
                                                                               region.
                                   20
                                                                               Kenya is recognized as one of the most computer                  Country Analysis
                                   40
                                                                               literate societies in Africa and for the adoption of
      Skills                                                    ICT
                                   60                          Affordability   mobile-based services such as mobile money. This is              Industry Analysis
                                                                               reflected in part in relatively high scores for Digital
                                   80                                          Training and skills. However, in this context the relatively     Industry Analysis: Manufacturing
                    Digital                     Digital
                                                                               low scores on Access and Use and Digital Tools Usage
                                   100
               Tools Usage                      Training                       are quite surprising and may reflect unequal access              Industry Analysis: Energy
                                                                               between people living in the relatively affluent urban
                         Average        Kenya                                  areas and poor rural communities.
                                                                                                                                                Industry Analysis: Transport
Chart 9: Summary of Kenya’s DMA Scores in each category
                                                                               Data from GSMA suggest that only 23% of Kenya’s
relative to four-country average                                                                                                                Key insights and recommendations
                                                                               population use IP messaging services (as compared to
Kenya scores relatively well (above the four-country average) in the           nearly 50% in Nigeria and South Africa) while 15% use
areas of Business and Regulatory Environment, Digital Protection,              Facebook. 89% of Kenya’s population have access to               Conclusion
Complexity (or sophistication of the economy), Skills and Digital              a mobile network but this was the lowest of the four
Training. The country performs relatively poorly when it comes to              countries. As a result, Kenya received a normalized              Glossary of terms
Access and Use, Digital Tools Usage as well as the Economic Size and           score of zero. This in part explains the oddly low overall
Growth indicator.                                                              access score. 64% of the population have access to a 3G
                                                                                                                                                References
                                                                               network which is relatively high compared to Ethiopia
As noted above, Kenya is ahead of both Ethiopia and Nigeria on                 and Nigeria. Kenya is also well ahead of Ethiopia and
the economic complexity measure. The Harvard Atlas on Economic                 Nigeria when it comes to internet penetration – 16% of
Complexity measures how a country’s total trade dynamics (imports,             the population have consistent access to the internet.

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Country Analysis
Ethiopia
                                Digital
                                                                                  uptake of digital services. Ethiopia’s score on the
                              protection                                          Access and Use measure is only 7 out of 100.
                                                                                                                                            INDEX (Click on categories to navigate)
                                                              Business and        While 90% of the Ethiopian population have access
       Complexity                                             regulatory          to a mobile network, access to the internet (fixed or       Disclaimer
                                                              environment
                                                                                  mobile) is very limited. Only 7% of the population
                                                                                  have access to a 3G network while only 2.9% of              Foreword
                                                                                  households have consistent access to the internet
 Size and                                                             Access
                                                                                  (fixed or mobile).                                          Introduction
  Growth                                                              and Use
                                    0                                             As a result, less than 10% of the Ethiopian
                                                                                                                                              Research Methodology
                                                                                  population currently make use of IP messaging
                                   20                                             services and less than 5% use Facebook.
                                                                                                                                              Country Analysis
                                   40
                                                                                  Ethiopia does relatively well on the ICT Affordability
      Skills                                                       ICT
                                   60                             Affordability   measure where based on the WEF measure it scores            Industry Analysis
                                                                                  slightly higher than both Kenya and Nigeria but
                                   80                                             less than South Africa. The WEF’s ICT Affordability         Industry Analysis: Manufacturing
                    Digital                        Digital
                                                                                  measure includes prepaid mobile cellular tariffs in
                                   100
               Tools Usage                         Training                       PPP $/min, fixed broadband Internet tariffs in PPP $/       Industry Analysis: Energy
                                                                                  month and a measure of competition in the internet
                         Average        Ethiopia                                  and telephony industry12.
                                                                                                                                              Industry Analysis: Transport
Chart 10: Summary of Ethiopia ’s DMA Scores in each category
                                                                                  Ethiopia achieves a similar score to Nigeria in the
relative to four-country average                                                                                                              Key insights and recommendations
                                                                                  World Bank’s Ease of Doing Business survey4, with
Ethiopia is the smallest and least developed of the four                          a relatively low score of 47 out of 100 and tech
economies assessed. It is not surprising to find that it is                       innovation scores show that it currently attracts           Conclusion
the laggard in most areas of the DMA. The exceptions                              very little tech start-up funding relative to the other
are ICT Affordability and Digital Training where it slightly                      four countries; although there are evident signs of         Glossary of terms
outperforms the average.                                                          government driving activity in this space.
                                                                                                                                              References
The lack of supporting ICT infrastructure in Ethiopia is likely
to be one of the major indicators hindering growth and

                                                                  Continue
Country Analysis
Conclusion of Macro-economic findings
The DMA provides an overview of the readiness of               supports and drives the expansion of digital services.
selected Sub-Saharan African countries to capitalize on        While the Nigerian economy remains heavily reliant on
the digitalization in four key areas – Economic Maturity,      oil for export revenues and on that basis is a relatively   INDEX (Click on categories to navigate)
ICT Infrastructure, Skills and Digital Literacy.               unsophisticated economy, it has also benefitted from
                                                               extensive investment in ICT and particularly 3G network       Disclaimer
While larger and more developed economies tend to              coverage. This infrastructure appears to have supported
be more digitally mature. The analysis has shown that          widespread uptake and the use of digital tools such as IP     Foreword
there are many other indicators that can influence a           messaging and social networking.
country’s ability to capitalize on digitalization. If done                                                                   Introduction
correctly it can drive entrepreneurial competition in the      South Africa with its relatively large and diverse
market.                                                        economy and extensive and high-quality mobile
                                                                                                                             Research Methodology
                                                               broadband infrastructure, remains the leader of the four
For example, while the Ethiopian and Kenyan                    countries in most areas. There remains significant room
economies are of a similar size and are growing at             for improvement when compared to the international            Country Analysis
similar rate, Kenya is ahead of Ethiopia in terms of           benchmark in the areas of consistent and affordable
digital maturity. This is attributed firstly to Kenya having   internet access and the provision of digital training         Industry Analysis
far more extensive ICT Infrastructure and particularly         (internet in schools) and skills.
mobile internet or 3G infrastructure to support Access                                                                       Industry Analysis: Manufacturing
and Use and secondly because it is a much more                 South Africa therefore has the highest digitalization
diverse and services-oriented economy, which typically         Maturity of the countries assessed.                           Industry Analysis: Energy

                                                                                                                             Industry Analysis: Transport

                                                                                                                             Key insights and recommendations

                                                                                                                             Conclusion

                                                                                                                             Glossary of terms

                                                                                                                             References
Industry Analysis
The manufacturing, energy and transport industries             to provide a relevant comparative understanding for
showed varied levels of maturity across micro-                 Africa. South Africa’s digital maturity can be classified
economic digital indicators. Focus should be placed            as Established. It has a reliable digital adoption but
on better customer engagement through orchestrated             with room for important advances in areas which will
digital solutions to drive revenue generation with             be explored in this section.                                                                    INDEX (Click on categories to navigate)
digitally enhanced product offerings.
                                                               The micro-economic indicators were structured to                                                  Disclaimer
 The research conducted yielded 105 qualified                  assess digital maturity across three dimensions:
responses around micro-economic digital indicators                                                                                                               Foreword
from various industries. While responses were received          1 Culture of Innovation
from outside South Africa, these were removed from              2 Digital Operations                                                                             Introduction
the analysis as the number was not significant enough           3 Digital Customer and Offerings
                                                                                                                                                                 Research Methodology
                  Select research outcomes:                                     Manufacturing     Energy        Transport      Other       Cross-industry
                                                                                                                                                                 Country Analysis
                 Leadership indicators included the existance of a
Culture of       long term plan for how digital will help to deliver
                                                                                                                                                                 Industry Analysis
                 organizational objectives. There was also agreement
Innovation       among respondents that leaders embrace digital
                 change within their organizations.                              Established     Established   Established   Established    Established          Industry Analysis: Manufacturing

                 Near unanimous agreement that digital skills were required                                                                                      Industry Analysis: Energy
                 in order to be successful and that their organization fully
Digital          enabled employees by providing them with the digital
Operations       tools they needed. Below average maturity in Energy and                                                                                         Industry Analysis: Transport
                 Transport with reference to integration of systems              Established     Established    Developing   Established    Established

                                                                                                                                                                 Key insights and recommendations
                 On average 4 in 10 respondents from the entire sample
Digital          agreed to having launched revenue generating digital
Customer &       solutions into the market. Around single view of customer,                                                                                      Conclusion
                 Energy was aligned with the industry norm, Manufacturing
Offerings        was 10% higher and Transport 20% less than the average.         Developing      Developing     Emerging     Developing     Developing
                                                                                                                                                                 Glossary of terms

Micro-economic Digital Maturity                                                   2.8/3 2.6/3 2.2/3 2.6/3 2.7/3                                                  References
Focus should be placed on better customer engagement through
orchestrated digital solutions and to drive revenue generation with
digitally enhanced product offerings.
                                                                                      •              •              •            •                •
                                                                                                                                           Delta from Cross-
                                                                                     +0.1           -0.1           -0.4          0.1       indistry Average

Figure 4: Micro-economic Digital Maturity (South Africa)

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