Digital economy is here to stay – Finance Minister

The digital economy is still here – Minister of Finance

Finance Minister Ken Ofori-Atta has indicated that the digital economy that has been championed by the Akufo-Addo administration is here to stay.

He explained that the digital economy will represent 5.9% of Africa’s GDP effectively rising to 8.8% by 2050.

“The digital economy is here, and it is here to stay. IFC and google estimate that in 2025, the digital economy can contribute one hundred and eighty billion per year to the African economy. Increase to seven hundred and twelve billion per year in 2050. Assuming GDP growth remains at 45% per year in 2025.

“The digital economy will effectively represent 5.9% of Africa’s GDP growing to 8.8% by 2050.

“Across the African continent, the relentless deployment of networked sensors where intelligence and automation have led to a revolution, the same revolution happening at home in Ghana,” said Mr Ofori-Atta during the Business and Policy Dialogue, dubbed, ‘The Kwahu Summit on Africa’s Prosperity’, organized by The African Prosperity Network (APN) in collaboration with the AfCFTA Presidency and Secretariat, on 28 January 2023.

In the same event, Vice President Dr. Mahamudu Bawumia proposed three broad focus areas, which he believes will help the AfCFTA to bring about the transformation Africa needs.

Dr. Bawumia said that while the AfCFTA has set the stage for Africa’s transformation, its full potential can only be realized with significant steps by key African stakeholders, and focus on some of the proposed key areas.

“Like the vision of our ancestors, the African Continental Free Trade Area has set the stage to drive the industrialization of Africa, but it will take concrete, strategic actions by governments and businesses on the continent, the right mix of policies, a greater sense of purpose for intra-African trade that stronger to support the economic diversification and industrialization needed on the continent,” said Dr. Bawumia.

“To carry out the necessary transformation, I propose three areas that should be prioritized,” he said.

“The first is the need for smart investment in critical infrastructure. As a continent, we need to produce and trade our way out of poverty and underdevelopment, and we cannot do that without investing in smart infrastructure across the continent. While the last decade has seen some positive investments , there is a need for additional resources to finance ‘trade arteries’, which include physical infrastructure such as roads, rail, and energy; digital infrastructure such as data centers to facilitate digital transformation and financial infrastructure to allow financial market integration.

The investment, Dr. Bawumia noted, will be critical to the success of the AfCFTA.

The second proposal made by the Vice President “is to release productive capacity throughout the continent.”

“We need to create a platform for knowledge brokers and access to information about critical products and services on the continent to allow 445 million small businesses across the continent to connect to the value chain of these mega industries. We need to develop Africa into a manufacturing zone that will facilitate the trade of value-added products .This, in my opinion, will be critical to the industrialization of Africa and its enormous socio-economic benefits.

Dr. Bawumia added that the third focus area is financial mobilization and investment.

“Africa needs between US$ 130 billion and US$ 170 billion per year to close the infrastructure gap and generate sustainable growth at 5% per year or more. This provides a great opportunity for private sector investment,” he said.

“Attracting the participation of the private sector through Public-Private Partnerships (PPP) is essential for the delivery of various infrastructure projects. Furthermore, innovative policies are needed to mobilize and allocate resources more effectively, and for better coordination among all African stakeholders and international partners.

By Laud Nartey|3news.com|Ghana

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