August 17, 2018

E-governance Challenges in Africa

Aare Lapõnin
The payment terminals of various Ethiopian banks at a checkout in a grocery store in Addis Ababa. As a rule, none of them work, most Ethiopians don’t have bank accounts, and no one pays by card. At the same time, there is potential for digitalisation Banks’ terminals just need to be compatible with the cards of other banks, people’s trust in banks should be increased, and competition needs to be created in the telecoms sector to increase the availability of the internet.
The payment terminals of various Ethiopian banks at a checkout in a grocery store in Addis Ababa. As a rule, none of them work, most Ethiopians don’t have bank accounts, and no one pays by card. At the same time, there is potential for digitalisation Banks’ terminals just need to be compatible with the cards of other banks, people’s trust in banks should be increased, and competition needs to be created in the telecoms sector to increase the availability of the internet.

Estonia has the opportunity to export its knowledge and information technology to Africa

Digital Africa

Building an e-state is extremely complicated in any part of the world, let alone Africa. It is a widespread cliché that there is no point in talking about innovation and modern digitalisation in Africa; that speaking about an e-state in a place where many people have no electricity makes no sense. In reality, all African capitals have millions of 3G smartphone users who are ready to consume e-state services. The numerous already functional e-services prove that innovation is going strong in Africa and that everything is possible.

Africa is made up of 55 countries that belong to the African Union (AU), plus the unrecognised self-declared state of Somaliland and some European overseas territories. No one argues about the fact that Africa’s first priority for the entire continent is to end conflict, but there are armed conflicts or post-conflict tensions “only” in some provinces of 15 countries (Somalia, South Sudan, Nigeria, Niger, Chad, Cameroon, Mali, Algeria, Libya, Democratic Republic of the Congo, Central African Republic, Burundi, Ethiopia, Sudan and Egypt).

In peaceful regions, the main priorities are primarily democracy and implementing best governance practices, reducing corruption, regularly organising free elections and promoting human rights. All of this is made easier by e-governance. As African countries usually don’t have a sophisticated, fully-fledged bureaucracy, they present an excellent possibility for leapfrogging straight into the digital age and new technologies, just like building the Estonian state in the 1990s when we were no longer hindered by the previous systems. Even today, Africa has digital champions like Rwanda, Mauritius, Morocco, South Africa and Botswana. The AU has acknowledged that e-governance should be a topic pursued at continent-wide level.

FiscalAdmin, an Estonian company that develops e-state solutions, has been advising a committee of the AU on how to start developing an e-state most effectively, and the risks that must be avoided during the process. However, a systematic approach, long-term advice and additional funds are needed to work out continent-wide guidelines and to train the member states. African countries need not remain alone in their e-endeavours; they should be supported by the AU, whose mandate covers the promotion of democracy and best practice in governance and public administration.

Having worked on democracy-related issues in the AU for four years, I have encountered a lot of distrust towards e-governance in Africa. The most frequent argument I have heard is that Africa must first alleviate poverty, build infrastructure, deal with food shortages and end armed conflicts before it can engage with creating e-governance systems. Some African governments have had bad experiences with Western consultants or digital projects realised with the help of development cooperation, the results of which have turned out to be useless and have tarnished the reputation of e-governance.

The Status of e-governance in Africa

I don’t think that the whole of Africa should wait until all conflicts have been resolved before initiating digitalisation.1 Despite the slow progress of the past few years, the root causes of conflicts in Africa are believed to be incompetent governance, corruption, electoral fraud and lack of democracy, and the AU’s Peace and Security Council agrees with this view. According to Africa’s own Ibrahim Index of African Governance (IIAG), the average rating of best governance practices has not improved in the past decade and remains at 50 points out of 100. Efficient public administration is also lacking.

According to the recently published 2018 UN report on e-governance, Africa is lagging far behind the rest of the world.2 According to thee-Government Development Index (EGDI), Africa’s average is on the rise (0.3433), but it is still lower than that of all other continents. Europe has the world’s highest average (0.7727), with Denmark being the global leader (0.9150). Estonia is in 16th place (0.8486), and Somalia is last (0.0566). Only six African countries belong to the group of states with a high level of e-knowhow: Ghana, Mauritius, Morocco, the Seychelles, South Africa and Tunisia. Many Africans cannot be part of the progress in IT since they do not have reliable access to the internet, the price of the service is too high, or they lack the necessary skills. The UN estimates that 22% of the African population has access to the internet; the corresponding figure in Europe is 80%.

At the same time, some African countries have made great progress in offering various e-services, even today. The small progressive island nation of Mauritius is even developing a regional e-governance academy. Some other examples: in Namibia, the Estonian company Cybernetica helped to realise the UXP interoperability platform, which, similar to the Estonian X-Road, allows various state institutions to be integrated into a single system and increases the efficiency of the public sector. Estonian company Nortal has supported Nigeria in launching a Government Integrated Financial Management Information System (GIFMIS), and Botswana in creating an e-tax management solution. In Ethiopia, cash registers are directly connected to the tax authority. Biometric polling cards have been used in at least 14 African countries; even iris recognition has been applied in Somaliland. In Zimbabwe, a public-sector financial management system that experts consider to be in certain respects even better than the Estonian State Treasury’s IT system has been in operation since 1999. About a half of African countries have some sort of electronic ID card. E-state portal Irembo is in use in Rwanda. There are also examples of e-services less familiar to Estonians, e.g. using drones for delivering pharmaceuticals to remote villages in Rwanda, sending text messages to warn about natural disasters in Madagascar, and mapping wells with potable water using a mobile app in Kenya.

One of the greatest African e-success stories is the Kenyan mobile phone-based money transfer, financing and microfinancing service M-Pesa, which has spread under various brand names to at least 15 African countries, where phone-based money transfers are used daily instead of debit cards or cash. It is estimated that M-Pesa has helped 2% of Kenya’s population escape poverty. Many African countries require a copy of an identity document for the issue of a mobile SIM card, which is simultaneously used to identify the local residents on the population register—also an e-service.

A mobile phone is the main device for accessing the internet and using e-services in Africa. It is especially important for African youth, who see digitalisation as an opportunity for development and want to live as well as their peers in the West and North. Forty-one per cent of the African population are under 15 and two-fifths of the inhabitants of Sub-Saharan Africa have mobile phones. I have seen young Ethiopian men who live in a hut built of dung with a mobile phone and an internet connection. If a person’s homeland doesn’t enable them to live comfortably, they set out on a dangerous, expensive and crime-ridden journey to Europe or the Arabian Peninsula to become an economic migrant.

Role of the African Union

I do not think that building an e-state needs to be a centralised endeavour. It wasn’t like that in Europe when Estonia started out in the late 1990s as a pioneer thanks to the enthusiasm of a few people. At the same time, I believe that the AU currently has a unique opportunity to offer its members guidelines and tools for building e-states due to the imminent arrival of the digital revolution. True, e-governance has not been mentioned in any AU regulations per se, but even without specific references the AU’s directives include provisions that allow the headquarters in Addis Ababa to require member states to offer digital public services, and citizens have the right to demand more transparency from their governments. For example, the AU has a Charter on Values and Principles of Public Service and Administration, and a Charter on Democracy, Elections and Governance, as well as a Convention on Cyber Security and Personal Data Protection, which unfortunately has not yet entered into force. That is the trouble with the acts of the African Union—many countries have not ratified them due to lack of political will, incompetence or simple ignorance. In addition, the AU to some degree copies UN conventions. The AU has adopted a vision called Agenda 2063, which describes what Africa should achieve in a hundred years from the establishment of the Union’s predecessor, the OAU (Organisation of African Unity). It mentions professional public services, e-services and e-governance as specific goals.

There are several global indices that measure the use of ICT in the public sector, but these only compare how a country ranks in relation to others. This isn’t much help for specialists in the field and e-state architects. Building an e-state is an extremely complex task. Hundreds, if not thousands, of modernisation programmes need to be realised to get e-services working in all important fields of life. The matter is further complicated because the e-services must be integrated under one service platform available to all citizens with an e-ID. Realising e-services in a specific field takes time and involves many risks, let alone creating an all-inclusive e-government system, which is a huge challenge. That is why clear and practical guidelines and training are necessary. I believe that such knowledge centres—so-called e-state academies—should be located in Addis Ababa at the AU’s headquarters and in the regional economic communities.

Why is e-governance Good for Africa?

The promotion of e-governance comes with a large number of other services. E-governance is important for the entire African economy since developing it will improve the economy of all countries on the continent. E-developments inspire entrepreneurs to come up with new solutions, but Africa’s economy will only benefit from this if governments order services from Africa’s own IT sector, rather than large Western corporations who are already actively offering their services in the continent.

I will now outline two specific business-related issues that have recently become very relevant in Africa and that could be solved through e-governance.

First, one of the priorities of President Paul Kagame of Rwanda, which presides over the African Union in 2018, is to reduce illicit financial flows out of Africa. Although it cannot be said for certain, various reports estimate that 50–73 billion US dollars flow out of Africa illegally each year. This includes the proceeds of crime as well as taxes not paid to the government on exports. According to the OECD, Africa received 42 billion dollars in development aid in 2016—a little less than the amount smuggled out of Africa. The African side blames either large Western corporations or corruption for the outflow of funds. I argue that they need to get their national tax collection systems fixed, and implementing an e-tax system would certainly help with that. At the same time, relevant reports by the UN, Financial Integrity or the AU do not mention digital tax collection. I wonder why they don’t think about digital solutions.

Second, to attract foreign investment into Africa, governments should set up one-stop-shops for investors, through which people can establish companies quickly, with less bureaucracy and perhaps even without entering the country. Since business overheads are higher in Africa compared to the rest of the world, at least entering the market could be made easier to attract investors. This doesn’t mean giving up the principle of “know your client”; it simply means doing away with paper bureaucracy and unnecessary procedures. Such digital windows to business are used in several places around the world, including Estonia, Hong Kong and Singapore. Kosovo and Kazakhstan are currently developing similar solutions.

Estonia’s Small Victory in Africa

I now move on to Estonia’s ability to export its digital solutions. There is relatively little competition in Africa and the digital marketplace is currently quite empty, but it is becoming more actively occupied. I think the question is whether the African e-services market will be flooded by American or European consultants and developers. Estonia has been very successful in promoting itself around the world as an e-state; even in Africa people have heard of Estonia in this context. However, the Estonian government doesn’t actively support the export of e-solutions to Africa. Estonia has only one embassy in Africa (in Egypt), and none in the Sub-Saharan region. There is no publicly funded Estonian business diplomacy in Africa, with the exception of a few visits and talks and the joint delegations of the Ministry of Foreign Affairs, the Estonian Chamber of Commerce and Industry and the ICT cluster Estonian Association of Information Technology and Telecommunications, which have already yielded positive results. The current campaign by the UN Security Council also opens up the possibility of selling e-state solutions. At this point I want to criticise the Estonian government because I think the Ministry of Entrepreneurship and Information Technology and the Ministry of Foreign Affairs haven’t done their homework in this field, and I hope the new IT minister will explore the possibilities for expanding IT exports. According to a rough estimate, with sensible action the Estonian IT sector could earn billions from the African market in the next decade.

The ICT cluster helps to promote the export of Estonian IT knowhow to Africa and the organisation says that cooperation with African countries is developing fast. In 2017, Estonian prime minister Jüri Ratas signed memoranda of understanding on ICT with Moussa Faki Mahamat, chairperson of the AU Commission, and President Pravind Jugnauth of Mauritius; the Estonian ICT cluster also has a memorandum of cooperation with Smart Africa.3 Estonian companies are active in the markets of Kenya, Ghana, Rwanda, Uganda, Botswana, Namibia and Zimbabwe, and maybe even elsewhere. In recent years, the Estonian Chamber of Commerce and Industry and the ICT cluster have organised joint visits for entrepreneurs to Rwanda, Uganda, Côte d’Ivoire and Ghana, as well as hosting visitors to Estonia. There will be a visit to Botswana and Namibia in the autumn and to the Smart Africa trade fair next year. The ICT cluster’s export portal (www.e-estoniax.com) provides a good overview of the e-governance services Estonia has to offer.

Exports are supported by shaping foreign policy, and Estonia has made some progress in this as well. I tried to get e-governance included in EU aid programmes when I worked in Addis Ababa, but encountered opposition from the External Action Service and the European Commission’s Directorate-General for International Cooperation and Development (DG Devco). The main explanation offered was, once again, that Africa wasn’t ready for e-governance. At the same time, Andrus Ansip, the European Commissioner for the Digital Single Market, and his cabinet members, together with the Directorate‑General for Communications Networks, Content and Technology (DG Connect) have done a remarkable job in introducing e-governance in Africa. The memorandum Estonia and the African Union signed should be used to help the AU create an e-governance academy for African countries. It is also a small victory that Estonian diplomats managed to get e-governance mentioned in the final declaration of the 2017 EU-AU summit.

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1 “Digitisation” is the presentation of data in digital form. It should not be confused with digitalisation, which is the process of implementing digital technologies in various social and individual activities.

2 I consider the methodology of the report faulty, but half of the countries (including Estonia) have not even bothered to reply to the survey questions.

3 The Smart Africa Alliance is a framework for implementation, monitoring and evaluation of the AU’s SMART Africa Manifesto, designed to make it actionable. It is currently a partnership bringing together all African countries adhering to the manifesto represented by the AU, the ITU, World Bank, AfDB, ECA, the GSMA, ICANN, Intelsat and the private sector.