Naspers SA CEO tips digital economy to fuel restart of economy
Africa's digital transformation has the capacity to unlock the continent's potential, driving inclusive and sustainable growth, says Naspers SA CEO Phuthi Mahanyele-Dabengwa.
Mahanyele-Dabengwa made the comment during a virtual panel discussion at the World Economic Forum (WEF) on Friday, where she was joined by the president of Ghana Nana Akufo-Addo and Absa Group CEO Daniel Mminele.
The discussion focused on “Building inclusive, sustainable and job-creating growth in Africa” in the context of the African Continental Free Trade Area (AfCFTA) coming into effect at the start of this year. With a consumer market valuation of $3.4 trillion, AfCFTA has been described as a key pillar for the region's economic recovery as it aims to promote intra-African trade and economic integration.
The Naspers SA CEO noted that the COVID-19 pandemic has exacerbated the high levels of global inequality.
Referencing president Cyril Ramaphosa’s WEF address, Mahanyele-Dabengwa said the continent cannot afford to restore itself to where it was pre-COVID-19, but must rather forge a new path to address its most pressing challenges.
Digital transformation can help to create this new path, she told the panel. “Africa’s digital transformation has the potential to leapfrog many cycles of development; we can make significant advances enabling sustainable economic growth, ensuring we move forward collectively so that no one is left behind.
“The continent’s burgeoning centres of technology, which include Ghana, South Africa, Egypt, Kenya and Nigeria, among others, are the backbone of the tech ecosystem, developing innovative products and services that compete globally and can be scaled internationally.”
Mahanyele-Dabengwa said tech hubs across Africa are forming alliances and deepening networks to provide support to tech entrepreneurs across the continent to access new markets, adding that she believes governments and businesses can play an even bigger role in accelerating this momentum.
“Innovative financing methods that draw on public-private partnerships are critical to helping build the necessary infrastructure that creates the capacity to stimulate future growth in sectors such as manufacturing, ICT and e-commerce, fast-growing and youthful populations.
“The under-penetration of digital services and rapid adoption of smartphones creates massive opportunity to drive the continent's digital transformation. This can enable real progress to some of Africa's most pressing societal needs, so that we can build better for digital transformation.
“To achieve this promise, it will be important for governments to work together with each other bilaterally, as well as with the private sector to ensure the regulatory environment enables investment and growth.
“The African free trade agreement can play a key role in driving the kind of regulatory harmonisation required to place Africa's digital transformation at the cornerstone of its growth aspirations.”
Mahanyele-Dabengwa is of the view the digital economy can be a game-changer for business and consumers alike, as well as open up the potential for a more inclusive economy, especially for women and future youth to be empowered.
Closer to home, she is confident the digital economy will be a “huge source” of economic growth for SA.
Speaking to CNBC Africa on the same day, she said while the macro-economic environment has been very hard hit by COVID-19 and is under significant pressure, the tech space tells a very different story.
“There has been an acceleration of the digital economy, and people have changed their consuming habits, quite frankly, because they've had to,” Mahanyele-Dabengwa stated. “This is true across the globe. For some of the sub-sectors, the growth has been between good and phenomenal.
“The consequence of this has been brought about by significant behavioural change. The implication going forward is that while the digital economy is still relatively small, in some measure, with an Internet under-penetration of 63% in 2019 in South Africa, it will be a huge source of growth, nonetheless.
“We need to look at the proportion of growth that will come from this; it'll provide great opportunity going forward to fuel the restart of the economy. Increasing investment in digital transformation will form a fundamental part of the growth of South Africa's economy.”
Mahanyele-Dabengwa indicated SA has many opportunities, access to great technology talent, and a relatively low cost of doing business for new companies.
“As a society that is digitising rapidly, we see growth in e- commerce, fintech, educational technology platforms. The shift to e-commerce, for example, has been massively accelerated. Earlier forecasts had placed the growth between 5% and 9%, but it would appear that a conservative estimate would put the growth at 19%, and an optimistic view, say 25% growth over the next five years,” she concluded.