Challenges and Opportunities of Digitalisation on the Future of Work in Africa

By Dr Parfait Bihkongnyuy Beri (Download pdf)

Challenges and Opportunities of Digitalisation on the Future of Work in Africa

Introduction

Digitalisation is a rapidly evolving field, and it can be challenging for countries to keep up with the latest developments. This makes it difficult to predict how it will affect the workforce in future. Over the past few decades, intense debates have emerged about whether digitalisation could replicate the successes of previous inventions.

This has divided researchers and policymakers into different groups with contrasting opinions on how it affects economic outcomes (Gordon, 2012; Brynjolfsson & McAfee, 2014). However, a greater part of the concerns stems from the fact that digitalisation could potentially undermine the place of humans in the workplace.

This paper explores the state of digitalisation in Africa, its challenges, and opportunities for the future of work. The study provides policymakers, businesspeople, and other stakeholders interested in digitalisation with information that can help them embrace and manage the transition into the digital economy by reviewing literature on published papers and reports about digitalisation.

The rest of the paper is structured into three sections. The first section reviews the state of digitalisation in Africa. The second section zooms into the challenges and opportunities of digitalisation, while the last section concludes the paper by reflecting on the way forward.

The State of Digitalisation in Africa

Several factors influence the adoption and use of digital technologies. These include the level of investment in digital technologies by businesses and the government, availability of digital infrastructure, knowledge of digital skills among the population, and the regulatory environment. According to a joint AU and the Organisation for Economic Co-operation and Development (OECD) report on digital transformation in Africa (AUC/OECD, 2021), the percentage of the population in Africa with a cell phone increased from 15.1% to 40.8% between 2013 and 2018. Access to 4G coverage increased from 23.8% to 57.9% between 2015 and 2020.

Regarding the digital economy, the same report indicates that sales from e-commerce increased from USD 3 748.0 to 3, 959.2 (USD million) from 2014 to 2018. In 2018, 72% of the population in Africa was using mobile phones regularly, 30% of women had access to the internet, 22.7% of the poorest 40% had access to the internet, while 25.6% of the rural inhabitants had access to the internet.

Between 2013 and 2018, the percentage of firms having their own website increased from 18.2% to 31.4%, while that of firms using emails to communicate with clients increased from 46.1% to 59.1%. The number of goods exported to the OECD that are vulnerable to automation in 2020 was estimated at 14.1%. Finally, an estimated 300 million people were using mobile money accounts in Africa in 2018, the largest in the world. The proliferation of mobile money services also pushed several banks to roll out mobile and internet banking services in most parts of the continent ().

Digitalisation constitutes a critical part of the AU digital transformation strategy. The objective is to build an African Digital Single Market by 2030 to facilitate the free movement of capital, people, and services in line with the African Continental Free Trade Area (AfCFTA). To that end, the AU has partnered with several organisations to navigate existing challenges and transform the African digital space. The statistics above shed some light on the speed of digital penetration into Africa, which is not without opportunities and challenges.

Opportunities of Digitalisation

According to Stuart (2017), new technology has introduced flexibility and fluidity into working environments, which brings several opportunities with wide implications for African economies.

Firstly, digitalisation can help African economies leapfrog traditional development pathways, enhance economic resilience, and accelerate the creation of new jobs. The adoption and use of digital technologies can increase wages due to more demand and productivity. In this regard, the adoption of digitalisation would free Africans from monotonous tasks and give them more room to concentrate on difficult ones, which is cost-effective and allows staff to communicate and collaborate on more complex projects. Digitalisation will also enable firms to measure user engagement, conduct surveys, and keep up-to-date with the well-being of staff.

In addition, many small businesses in Africa are rapidly embracing digital technologies. This is expected to enhance their efficiency, leading to an increase in the use of digital platforms and the creation of more jobs. The mobile money revolution presents a typical example of how digitalisation has drastically changed the business ecosystem in Africa, having recorded 300 million subscribers and millions of direct jobs as mobile money agents in 2018. Expanding such innovations into banking, healthcare, and governance will positively influence access to finance, healthcare, inclusive governance, and job creation.

To that end, some examples of new jobs that young Africans could benefit from include social media managers, cybersecurity experts, engineering, big data analysts, and virtual reality designers.

An even bigger opportunity for Africa is that an increasing number of its youthful population is gaining better and more practical education that will facilitate easy adaptation into the digital age. In Cameroon, for instance, mobile money services offer employment as agents to thousands of youths, especially to women and the vulnerable.

Challenges of Digitalisation

Despite the opportunities that come with digitalisation, the accompanying challenges are concerning. Firstly, digitalisation could displace people from work and exacerbate existing inequalities in the continent if routine and cognitive tasks are automated. The displacement of workers could lead to a decrease in the national, sectoral, or occupational wages. Jobs such as copy editors, typewriters, printers, content creators, and speech writers are already threatened by advances in AI.

Secondly, digitalisation is likely to be more beneficial to highly skilled workers relative to unskilled workers. While African countries have made enormous investments in education to bridge the skills mismatch, education in the continent still has a weak practical background that could impede youths, women, and vulnerable groups from fully exploiting the benefits of digitalisation.

Finally, digitalisation is also raising concerns about the protection of confidential data (data security), that has occasionally been compromised in many countries, especially by business rivals. In this regard, an equivalent investment must be made on cyber-security to protect confidential information.

There are several barriers currently impeding the adoption of digital technologies. These include inadequate political will, ineffective change management and the lack of digital skills. For African governments and policymakers to fully exploit the benefits of digitalisation, they must endeavour to circumvent these challenges.

Conclusion

This study examined the state, challenges and opportunities of digitalisation on the future of work in Africa by way of literature review. The African continent has made enormous progress in recent years on digitalisation, and it will profoundly influence the future of work.

While digitalisation is expected bring about positive changes such as increased productivity, flexibility, and user engagement, it could also lead to job displacements or losses and an overall decrease in the national or occupational wages. Based on these challenges and opportunities, it is important for African countries to embrace digitalisation while also being mindful of its potential negative effects on the labour market.