Accelerating Digital Transformation in Central Africa: What Levers for Industrialization and Youth Employment?

By Stéphane Mbiankeu Nguea and Wirajing Muhamadu Awal Kindzeka

Executive Summary

Mobile connectivity in Central and West Africa continues to expand, reaching nearly half the population. This increase in internet access, however, has not yet translated into structural transformation. Millions of users are being connected, but the marketplace remains fragmented and costly, which limits industrial growth and formal employment. Recent 2025 policy frameworks – including the Cotonou Declaration’s employment targets and ECCAS’s digital trade protocols – represent a continuation of regional ambition, but their impact will depend on addressing longstanding implementation obstacles. This brief argues that the primary blockage is the dual constraint of regulatory fragmentation and cross-border payment friction. National data laws are written independently, which impedes the free flow of information that modern supply chains depend on. A small business in Douala cannot easily accept a digital payment from a customer in N’Djamena without encountering significant delays and foreign exchange costs. The paper proposes a shift in emphasis from infrastructure quantity to economic integration quality, defined by interoperable payments and law. The near-term priority is a regional payment settlement switch and the mutual recognition of data regulations over the next 24 months.

Key Messages

• The region’s industrial stagnation is not solely attributable to broadband targets. Digitalisation cut Douala Port waits from 15 to 8 days by reducing control points. Without a functional regional payment rail, the digital infrastructure being built cannot fully support regional commerce.
• Divergent national data localisation laws are acting as non-tariff barriers to trade. For a logistics firm tracking cargo across three countries, compliance with three separate data regimes imposes a regulatory burden that adds cost and complexity to regional value chains.
• Achieving the target of 2 million jobs for youth is unlikely to rest on coding and business process outsourcing services alone. The labour absorption capacity of the digital services sector is limited by the current size of the region’s formal economy. One industrial lever is local PC and smartphone assembly. Without tax and component-import incentives calibrated for this sector, the risk is that workforce training programmes will primarily prepare young people to import and resell foreign technology, rather than building domestic industrial capacity.

1. Introduction

For a decade, digital policy in Central Africa has been framed around the potential of the internet to enable leapfrog development. Indicators of SIM card penetration and new user numbers are regularly cited as evidence of progress. However, after ten years of mobile growth, intra-regional trade remains below 7 percent. The region’s ports continue to handle high volumes of imported consumer electronics, with limited export of regionally assembled technology. The policy question this brief addresses is the following: Why has the rapid expansion of mobile internet not yet altered the region’s fundamental economic structure of raw commodity export and finished goods import? The analysis suggests that the focus has been on connectivity rollout, while the transactional and productive dimensions of the digital economy have received less attention. This paper draws on recent ECA and ECCAS documentation to examine the specific policy failures that prevent, for instance, a Douala-based manufacturer from selling to a Kinshasa-based retailer via a frictionless digital channel. To do so, the brief: 1) diagnoses current challenges, 2) identifies the mechanisms through which digital tools can strengthen the productive economy, and 3) lays out policy interventions for the short, medium and long term.

2. Diagnostic: The Binding Constraints to the Regional Digital Industry

2.1. From Fragmentation to Paralysis

The Cotonou Declaration and the ECCAS Digital Trade Policy represent renewed political commitment. However, they echo commitments made in Libreville in 2015 and N’Djamena in 2018, and the implementation challenge remains significant. The difficulty is not primarily technical but one of political economy. Harmonising data protection regimes involves negotiations that touch on sovereign decisions over server location and security oversight. Past frameworks have struggled because they attempted broad harmonisation across multiple pillars simultaneously, triggering coordination challenges that delayed implementation. The most immediate binding constraint is the interoperability of mobile money and banking rails across the CEMAC and DRC corridors. A trader moving goods on the Bangui–Douala corridor often defaults to cash because converting Central African CFA to Congolese Francs via mobile platforms remains expensive and unreliable. This is a hard infrastructure and governance failure in the financial switch layer. Unless this constraint is addressed, the viability of regional e-commerce targets is questionable. Addressing this requires a narrower, more technical focus than previous broad-based harmonisation attempts.

2.2. National Initiatives and Regional Scalability

The inventory of national digital initiatives is notable. The DRC’s $1.5 billion digital plan and Congo-Brazzaville’s CARIA AI centre indicate national-level ambition. However, these initiatives do not easily scale across borders. CARIA, for instance, is a China-backed facility with intellectual property arrangements that do not automatically extend to neighbouring ECCAS states. The DRC’s data centre investments are designed primarily to serve Kinshasa’s bandwidth needs, rather than to function as a redundancy hub for Gabon or Equatorial Guinea. The missing link is a regional procurement and hosting policy. Without an ECCAS directive encouraging a proportion of government data to be hosted within the region’s own interconnected backbone – rather than on distant servers in Europe or North America – these national centres will operate in isolation. They are likely to generate employment for a limited technical workforce, but will not produce the broader industrial spill-over of an integrated regional data market.

3. Mechanisms: How Digitalisation Feeds Industrial Value Chains

Digitalisation does not automatically generate industrialisation. It requires specific, sequenced pathways.

3.1. The Douala Port Digital Corridor

Currently, a container entering the Port of Douala can require physical stamps from up to seven different agencies, a process that is time-consuming and lacks transparency. Digitalisation in this context is not about introducing a standalone “Smart Port” application. It is about Single Window Interoperability. If the digital customs system of Cameroon cannot communicate with the transit monitoring system of Chad, trucks face multi-day border delays. These delays represent a direct industrial cost that makes Central African manufacturing less competitive relative to goods shipped directly from Asia. The opportunity lies in using the ECCAS digital trade policy framework to mandate API integration between port community systems and customs administrations. This is a technical, back-end fix. If implemented, the potential reduction in logistics costs could be significant, with comparable reforms achieving 36% reductions costs in Goli/Mahagi border, for example. That margin can determine whether a local furniture maker in Yaoundé can export competitively to Libreville or remains confined to the local market. Digital tools can modernise the economy by reducing the frictional costs of state bureaucracy at key transit points.

3.2. The Assembly Argument: Skills Are Not Enough

The Cotonou target of 2 million jobs is not realistically achievable through digital services alone. The formal service sector’s capacity to absorb labour at that scale remains limited. The industrial lever is hardware assembly. The mechanism is straightforward in principle: import duties on fully built units (smartphones, laptops) could be adjusted upward, while duties on components (screens, boards, casings) could be eliminated within designated Special Economic Zones. This structure could create a cost advantage for local assembly. This is not solely about consumer device affordability; it is about creating the repetitive, process-oriented, middle-skill jobs that facilitate the transition from informal trading to formal, export-oriented manufacturing. Furthermore, any adjustment to import duties must be designed within the constraints of CEMAC’s Common External Tariff, WTO bound rates, and AfCFTA tariff liberalisation schedules. This limits the scope for unilateral tariff action and underscores the need for a coordinated regional negotiation on technology product classification.

4. Regulatory Coherence and Sovereignty

This brief is critical of fragmented national data sovereignty clauses when they function as non-tariff barriers to regional trade and supply chain integration. At the same time, it advocates for regional local-content and data hosting mandates. These two positions are not contradictory, but they require a clear distinction. The problem identified is passive, fragmented sovereignty – where uncoordinated national rules create compliance costs without generating regional industrial capacity. The recommended solution is active, collective sovereignty – where ECCAS member states jointly agree to host and process data within the region’s shared infrastructure. In the first case, sovereignty is a defensive barrier; in the second, it is a deliberate industrial policy instrument designed to create a demand signal for regional data centres and value chains.

Conclusion and Policy Recommendations

The window for action is limited. If cross-border payments and logistics data sharing are not substantially addressed by 2027, the momentum generated by the 2025 frameworks risks dissipating. The recommendations below are sequenced to match the constraints identified.

Short Term (Next 24 Months): Fix the Transaction Rails

ECCAS, in partnership with the Bank of Central African States (BEAC), should initiate work on a Regional Instant Payment Switch. This is a technical bridge between existing national mobile money ledgers, not a new currency. Governance clarity is essential: BEAC would logically lead on the settlement layer, given its existing role in the regional payment system, while ECCAS provides the legal and policy mandate for interoperability. Financing could be explored through a small levy on regional SWIFT transfers or through blended finance facilities.

Member states should adopt a Mutual Recognition directive for Data Protection Laws. Rather than pursuing a new, fully harmonised law – a process that has historically taken a decade or more – ECCAS should issue a directive under which a company compliant with Country A’s data law is deemed compliant in Country B for the purposes of cross-border e-commerce.

Medium Term (3-5 Years): Industrial Policy for Hardware

The CEMAC Commission should review the Common External Tariff (CET) to create a tariff differential between CKD (Completely Knocked Down) tech kits and finished devices. This should be done in coordination with Ministers of Finance and in a manner consistent with AfCFTA and WTO commitments. The objective is a deliberate, legal tariff structure that incentivises regional assembly.

Spine interconnection should be accelerated using a Pay-As-You-Go model. Instead of relying entirely on donor grants for the full backbone, private data centre operators should be permitted to build cross-border links in exchange for long-term right-of-way concessions and anchor government cloud-hosting contracts.

Long Term (5+ Years): Data Sovereignty for Industry

A Local Content Hosting Mandate should be introduced. The requirement would apply to companies receiving government procurement contracts or mining concessions, obligating them to host their operational and geological data within a regional ECCAS-certified data centre. This creates the demand signal necessary to make regional data centres commercially viable

. The feasibility of this mandate depends on the prior availability of reliable, cost-competitive hosting infrastructure within the region; phasing it in as capacity is built will be critical to avoid imposing disproportionate costs on SMEs and to manage investor concerns regarding data security.