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Africa may see $300 billion economic boost through digitalization

Jan 23, 2017

A potential $300-billion could be added to the African economy by 2026 through the adoption of digitalization in industrial sectors ranging from transport to manufacturing.

Digital technology will drive African development rather than disrupt it, and future business leaders will be drawn from the 200 million Africans aged between 15 and 25 who are early adopters of technology.

The Siemens 2017 African Digitalization Maturity Report benchmarks four countries at the forefront of the African digital revolution. The report found that disruptive digital technology has potential to serve more than industry. It can also help to meet development needs. Siemens sees digitalization as a growth driver in energy, manufacturing and transport. Its digitalization report measures the extent to which African countries have the business, legal and regulatory environments to support digitalization.

The report also measures infrastructure indicators such as access to international bandwidth, mobile network coverage, internet and mobile phone penetration and the costs of broadband and mobile phone access. South Africa’s diverse economy boasts high quality mobile broadband infrastructure, making it Africa’s digitalization leader. Siemens reviewed Africa’s manufacturing, energy and transport industries, based on their culture of innovation, digital operations and digital customer offerings. Manufacturing was found to be the most digitally mature. Smart technologies that can accelerate industrial digitalization remain at a foundation stage, though there is high awareness of the potential of digital technologies.

Digitalization and smart technology paves the way for new approaches to manufacturing and supply chains, creating opportunities to merge digital and physical worlds. This may include machinery that adjusts operations based on information from other machines, enabling manufacturers to create networks of advanced production capabilities with better performance, predictability and scalability.

Some of African industry’s main challenges include an unstable and costly power supply. Adoption of digital technologies can enable and support decentralised power generation using renewable energy, combined with intelligent grid management.

In the transport sector, rail and road sectors have the opportunity to move beyond electrification and automation to true digitalization which solves people’s mobility demands.

African digitalization in action

  • The Jeffrey’s Bay Wind Farm in the Eastern Cape is monitored 24/7 by a remote diagnostic centre in Denmark, which collects data from more than 10 000 Siemens wind turbines worldwide, thereby streamlining performance, maintenance and customer service.
  • The Gauteng Nerve Centre is a centrally-controlled operations facility which is a core part of a new signalling system built by Siemens for the Passenger Rail Agency of SA as part of the Gauteng Resignalling Project. It makes train operations safer and more efficient, enabling more trains to carry more passengers in Africa’s major economic hub of Johannesburg.

Digital impact on jobs

Concerns have been expressed globally about the impact of automation and digitalization on jobs. Yet digitalization does not mean an economy needs to suffer direct job losses.

Instead of making an employee obsolete, digital technology redefines the role of the worker, often leading to greater skills development. This essentially means that humans and machines are not competing for jobs, but working together and creating a new type of talent. 

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