Reimagining Africa’s Growth on Our Terms: lessons from Ghana’s digitalization story
Good morning, Distinguished Guests.
Let me congratulate the conveners of the African Development Conference, (African students at the Harvard Kennedy School of Government, and the Harvard Law School), for their work in creating an inspiring environment to discuss the future of Africa on the global market.
This is an important gathering of some of the brightest minds and most committed individuals from across Africa and beyond, and I am truly honoured to be speaking here today.
The broader theme of this conference, Reimagining Africa’s growth on our terms, is both timely and appropriate. For too long, Africa has been defined by external forces and influences, with little say in the direction of our own growth and development. We have been told what to do and how to do it, with little regard for our unique histories, cultures, and aspirations.
As a continent, we have endured 400 years of slavery with devastating consequences for our economic growth and development. We have also endured some 75 years of colonialism following the Berlin conferences where Africa was carved up amongst the European powers of Britain, Germany, France, Spain, Italy, Belgium and Portugal. The economic systems implemented by the colonizers in our countries were primarily designed to serve the economic interests of these countries and not the colonies. The development of Africa was not on our terms.
But today, at this conference, we are taking a different approach. We are thinking about reimagining our growth on our terms, with a clear vision of what we want to achieve and how we want to get there. We are embracing our diversity, creativity, and resilience and charting our own path toward a more prosperous and inclusive future.
At the heart of this vision is the transformative power of technology. We all know that technology is a powerful tool to drive innovation and competitiveness in all sectors of the economy, and we are determined to leverage this tool to its fullest potential.
By 20150 one in five people in the world (20% of humanity), will be African!!. Africa will also have have the largest population of youth in the world. Imagine if all these people are healthy, educated and productive. Imagine the economic effect of their aggregate demand and their cultural and creative influence and power. Imagine the influence of African Music and Art and general contribution to everything.
This is why ‘Reimagining Africa’s Growth on Our Terms’ is very timely and exciting.
I have no doubt that if we chart a course to fix our problems on the continent, it will translate into acquiring the voice and space we desire at the Global table. So far our failure to fix problems at home have made it easy for others to deny us the right voice and place, and even constitutes an unjustified excuse for others to look down on Africans everywhere. These and many reasons are why we absolutely need to fix our local issues urgently.
To do this effectively, Africa must deliberately figure out and chart its own course and make sure we get it right this time. For many centuries, Africa has been at the receiving end of other people’s ideas and dreams for us.
When it comes to Reimagining Africa, my imagination simply settles on Africa as a co-equal with other continents in the management of the affairs of humanity. An Africa which is in charge of its own issues and destiny and is respected for what it brings to the table which is a lot!!!
We should banish the Africa which is called to the table and told what to do, when indeed it is a major provider for everyone else, even though it is not rewarded appropriately.
We should banish the Africa which is descended upon by others, dug up everywhere and the treasures in its bowels ripped out and shipped off raw to power other people’s development, who then turn around and treat us as a basket case, only fit for charity.
I imagine Africa at a place where it can assert its true power for the benefit of its people and their dignity wherever they may be, (in or out of the continent).
What is clear to me is that many African countries are trying to grow and develop with very inefficient underlying systems that are not fit for purpose. These underlying systems are characterized by :
- A highly informal economy – the colonial powers were only interested in formalization to the extent that it furthered their objective of maximizing the resource exploitation of the African continent.
- No unique identification for the population – In addition, our citizens could not be properly and uniquely identified. It was possible to be born in Ghana, live a full life, die and be buried and there would be no trace of you or any documentation that you ever lived and died in the country.
- Many countries do not have functioning property address systems. Can you imagine what it would be like in the USA if the address system suddenly disappeared? The impact will be devastating for economic growth.
- The majority of the populations in many countries are excluded from the financial system with no access to bank accounts. This has a direct impact on financial savings, interest rates and economic growth.
- The payments system in many countries in many countries is dominated by cash which makes it very inefficient and not transparent.
- Public service delivery is largely based on manual system characterized by bureaucracy and corruption. The ports, drivers and vehicle licensing offices, passports acquisition, Health insurance registration or renewal, etc. are very frustrating processes for our citizens. There is a disconnect between government machinery and the lives of ordinary people. The system frustrates rather than help ordinary people.
- The majority of the population is not identified for tax purposes – In Ghana for example as at 2017 only 4% of the adult population had tax identification numbers. You cant tell who has filed their taxes or who has not filed and the population knows this. Without a property address system the collection of property taxes is also problematic. You do not have the data to tell which properties have paid their taxes or not. It is not surprising that in Ghana as at last year only 9% of properties paid property taxes and this is the case for many countries on the continent. How can you can you mobilize domestic revenue in these circumstances?
- The manual systems and lack of integration of existing databases has resulted in the proliferation of fake documentation – birth certificates, insurance stickers, vehicle registrations, drivers licenses, land title certificates (multiple land sales) etc. There is therefore constant suspicion around documentation. A deficit of trust results which makes the cost of doing business high.
- Ghost names on government payrolls is pervasive in many African countries because of the absence of unique identity.
- Many African countries do not have a working system of credit reference agencies to provide credit reports on individuals and businesses to lenders. They don’t have the data required to provide the credit reports. The potential for borrowers to abscond is high and therefore the cost of credit is high.
We have lived with these problems for 60 years since independence. Nobody or institution has insisted that we must have unique identity, property address systems, financial inclusion, etc. as a prerequisite for economic growth and development. But why should anyone tell us?
African countries made the mistake after independence of continuing to rely on natural resources (as the colonial powers did) instead of human resources for our development. The reliance on primary commodities has made African countries vulnerable to external shocks.
As a result, the focus of economic management by successive African governments since independence has been on crisis management as a result of factors such as collapse in commodity prices, increase in oil prices, debt unsustainability, political instability, macroeconomic instability, etc. Governments, have by and large, not focused on the underlying system that underpins economic activities and economic growth. African countries have been trying to transform their economies without data and transparent systems. Governments are taking critical decisions without the being informed by the data.
When our government assumed office in 2017, we made the ambitious decision to address all the problems of the lack of unique identity, address systems, etc. immediately and simultaneously. The question was what is the best way to do it?
Our decision was to quickly transform our economy by leveraging on technological innovations as a means to leapfrog the development process, overcome legacy problems, and improve both economic and public sector governance. This is why digitization has been a major area of focus for our government. If data is the new oil, digitization is the vehicle for generating the data.
Now, let me delve into the key areas of transformation that have been critical to Ghana’s digital revolution journey.
Unique Identification Numbers for the Population
The introduction of a biometric national identification system in Ghana has been a game-changer in several ways. More than 17 million people (over 80% of the targeted adult population) enrolled in the secured national database. With the Ghanacard, the identity of people (even dead people) can be established using their fingerprints. This is one of the most transformational projects implemented by any government since independence.
Address System for all properties and locations
The absence of an address system resulted in a landmark address system: pass the big tree, turn left at the blue house, etc. To solve the problem of a lack of a working address system in Ghana, we have leveraged on GPS technology to implement a digital address system for Ghana capturing every square inch of land.
In the process, we have identified and provided unique addresses for some 8.5 million properties in Ghana along with street names and house numbers. This new system has made it easier for businesses to locate their customers and vice versa and for emergency services to quickly respond to calls. Additionally, it has made it easier for the government to identify properties. We have therefore solved a major problem that we have lived with since independence through digital technology.
Financial Inclusion and the Payments System
One of the biggest problems that was impeding financial sector development in Ghana is the issue of financial exclusion. This means that most of the population is excluded from fully participating in the financial system because they are unable to open and operate bank and financial services accounts. This reinforces the dominance of cash payments.
As at 2017 the data showed that 70% of people in Ghana had no bank accounts but 80% of the adult population had mobile phones with 16 million active mobile money accounts. It was also not possible to send money to customers of different mobile money service providers. So we asked the following questions:
o why can’t we make it possible to send mobile money across different mobile money service providers and also
o why can’t the mobile money account function like a bank account ‘by making it interoperable with bank accounts?
The answer to these questions was the implementation of the ground-breaking mobile money interoperability system.
Mobile money payments interoperability has made it possible to transfer money seamlessly across different mobile money providers and between bank accounts and mobile wallets and in so doing we have provided mobile money wallets the functionality of traditional bank accounts.
As a result MMI, Ghana has the fastest growing mobile money market in Africa. I should note that Ghana is the first country in Africa and one of the few in the world to achieve this type of interoperability between bank accounts and mobile wallets. Even in the USA, the Federal Reserve Bank does not have interoperability in its Real Time Payments Network and has started the discussions to implement this type of interoperability.
Today, the payment system reforms we have put in place has made it easy to open a traditional bank account. For many banks, anyone can open a bank account remotely through their mobile phones without visiting a branch or filling out forms. Clients need only a valid national ID card and no additional documentation to open an instant account. We have put fintechs, banks and telcos on a common platform and this has helped Ghana become number one in Africa when it comes to Access to financial inclusion. Through digital technology we have practically solved the problem of financial exclusion, a problem we have lived with for over 60 years!
The digital payments infrastructure is boosting e-commerce in Ghana. Businesses are booming over Instagram, Facebook, Twitter, etc. Many people who cannot afford to rent or build shops are able to do business on the internet at little cost with deliveries helped by digital address and payments using mobile money interoperability.
Domestic Revenue Mobilization
Ghana has a major challenge in the area of domestic revenue mobilization. The tax/GDP ratio is 14.0% compared to 34% for the advanced (OECD) countries. Most adults are outside the tax net and compliance is very low. At the beginning of 2017, only 4% of the adult population of Ghana had Tax Identification Numbers (TIN).
In order to increase the number of people with TIN numbers, we took the decision to designate the Digital National ID card number as the TIN number. In doing this we increased the percentage of adults with TIN numbers from 4% to 86%! A few weeks ago, we made it easy for the 86% of people with TIN numbers to check their tax compliance status, file their taxes, pay their taxes and apply for tax clearance certificates on their mobile phones. At the end of the year we can now tell who has filed their taxes and who has not filed. Digital technology has therefore enable us to broaden the tax base, something we have not been able to do since independence. We expect this to enhance domestic revenue mobilization, reduce fiscal deficits and debt and increase economic growth.
National Common Platform for Property Tax Administration:
Most property owners in Ghana and Africa generally do not pay property taxes. Many do not even receive the bills to pay. Tax is paid on only 9% of properties in Ghana. This is because we lacked the key elements to implement and monitor an effective property tax regime.
However, thanks to our implementation of the national ID, National Digital Property Address System, mobile money interoperability, Ghana now has the infrastructure to implement a property tax system. Currently, we have developed a National Common Platform for Property Tax Administration for Ghana which will operate across all districts in Ghana. The Platform is now being rolled out and home owners will be able to receive their property tax bills, pay their property taxes and receive receipts on their mobile phones.
How is Digitization Addressing the Issue of Efficient Public Service Delivery and Corruption?
Our approach to improving the delivery of public services is to minimize human contact as much as possible. Therefore, we embarked on an aggressive digitization of the processes of service delivery across many public institutions with coordination from my office. So far we have:
Digitized the passport office and made passport applications online without the need for middlemen or for the payment of bribes to obtain a passport.
We have also digitized the ports, made it paperless and more efficient with a tremendously improved turnaround time.
We have also digitized Driver Licensing and Vehicle
Registration related services. Due to the digitization, a client no longer waits for several months to receive his/her license but can now get their license in a day once all the requirements are met.
Motor Insurance Database: The National Insurance Commission has also implemented the Motor Insurance Database. The objective of the introduction of the Motor Insurance Database is to curb the menace of vehicles with fake motor insurance stickers plying our roads, thus endangering lives and property.
With the digitization of motor insurance in Ghana, Members of the public can also self-check the authenticity of their insurance policy by dialing a USSD code. Also, our police and the general public can easily check from their phones and devices to find out which vehicles have insurance or not.
Ghana.Gov Platform: To make it easy to access government services, Government has launched the Ghana.gov portal, a one- stop shop for accessing government services. All government institutions are expected to be on the Ghana.Gov platform by the end of the year. This means that you should be able to apply for and obtain any government service online through the Ghana.Gov platform.
Integration of Government Databases:
The key to building a data-based economy is not only in generating data but it is even more important that the data does not sit in silos. The data should be integrated. This is a problem that currently exists in many advanced economies. Ghana however has the opportunity, in coming late to the game, to integrate the databases that we have generated from our ongoing digitization process.
In this regard, we are integrating the National ID card database with other databases such as Passports, SSNIT, NHIS, Ghana Revenue Authority, Bank Accounts, DVLA, SIM cards, Mobile money accounts, Controller and Accountant Generals Department, Registrar Generals Department, Births and Deaths Registry and the Police CID, Ghana.Gov etc. to create a centralized integrated database.
The integration of the databases will bring transparency, discipline and efficiency into our economy and society and also help law enforcement track down criminals. With a proper protection of privacy as provided by the Data Protection Act, employers should be able to do an online criminal background check on prospective employees for example.
The system we are building will make it easier for individuals and businesses to obtain loans because it provides lenders sufficient information about borrowers. Banks also know that the borrower cannot just disappear in the system. The system will also help reduce interest rates on loans because it will make credit reference bureau more effective and allow banks to distinguish the risk levels of various borrowers. This should increase economic growth.
Medical Drones
In many parts of Africa, hospitals and clinics in remote and largely rural communities have difficulty getting medical supplies especially in times of emergencies involving, for example snake bites, child-birth, blood supplies, floods, etc. Many lives are needlessly lost because the hospitals are unable to access critically needed supplies on time. To address this problem, Ghana opted to partner Sillicon Valley firm Zipline, the world’s largest automated on-demand delivery service for medical supplies.
Ghana was the second country in Africa (after Rwanda) to implement the delivery of medical supplies to remote areas through drones. I should add that Ghana currently has the largest medical drone delivery service in the world! What is even more impressive is that the drone centers are 100% manned by young talented Ghanaians.
Many lives have been saved as a result of the medical drones.
Interestingly, the US government has only recently contracted Zipline to also start the delivery of medical supplies by drones in the United States after Rwanda and Ghana took the lead.
E-Pharmacy – Digitization of Pharmacies in Ghana: Patients or people generally face difficulties when trying to find medicines in pharmacies. They have no way of knowing which pharmacies have the medicines. They could go to five pharmacies before getting lucky. Sometimes patients are directed to go to specific pharmacies to buy the medicine, denying them any advantage there might be of choosing from a lower priced shop.
People also don’t know what the prices of the medicines are at different pharmacies and tend in their time of vulnerability to just buy at the prices offered when they find the drug. It is also difficult to tell whether the medicines are genuine or fake. There is also the problem of drug abuse with prescription medicines.
To address this problem, we have implemented the E-Pharmacy platform. Basically, the digital E-Pharmacy platform offers the opportunity to everyone through a mobile phone to upload your prescriptions and find out which pharmacies near you have the medicines. Secondly you can compare the prices for the same drug offered by different prices so that you can buy from the lowest priced pharmacies.
You can order the drug and pay for it on the phone. The medicines are then delivered to the customers at home through a courier service. Ghana is the first country in Africa and one of a few in the world to implement a national scale E-pharmacy platform.
Digitizing the Education Sector
To make sure our education sector is not left out of the digital revolution, we are providing free Wifi to our senior high schools, 46 Colleges of Education, district education offices, and 13 public universities. A lot of progress has been made in this direction.
We are also providing 350,000 teachers with laptops under the one teacher one laptop policy. For teachers, the writing of lesson notes into notebooks, apart from being stressful, is a time- consuming activity. With the curriculum materials already installed onto the laptops, the suggested lesson notes can be downloaded onto the laptops to end the burdensome task of writing lesson notes.
Our next step is to provide tablets to all high school students and we have worked with the publishers of the textbooks to preload all the tablets with the all the required textbooks.
Collaboration with the private sector has been the key to the relative success of Ghana’s digitalization policies.
Challenges
One of the biggest challenges we face is ensuring that the benefits of digital transformation are equitably distributed across all segments of society. We are conscious that not all Ghanaians have equal access to digital technologies, and we are taking steps to bridge this digital divide. Internet penetration in Ghana stands at 53% and our goal is to increase it to at least 90%. We intend to achieve this through the Satellite technology and allocation of 5G spectrum. There is also the issue of affordability of broadband for the vast majority of the population.
Another challenge is the need for continued investment in digital infrastructure and skills development. While we have made great progress in these areas, there is still much work to be done. We must continue to invest in expanding access to reliable and affordable broadband and training and education programs to ensure that Ghanaians are equipped with the skills necessary to thrive in the digital economy.
Furthermore, we must also address the issue of cybersecurity. As we become increasingly reliant on digital technologies, the risk of cyber-attacks and data breaches becomes ever more prevalent.
Therefore, we must ensure that our systems are secure and that we have the capacity to prevent and respond to any threats.
Finally, we recognize the need for effective policy and regulatory frameworks to support the digital transformation of our economy.
This includes ensuring that laws and regulations keep pace with technological advancements and promote innovation while protecting citizens rights and privacy.
One of the biggest challenges is ensuring data privacy and security. With the amount of personal information being collected, it’s essential to have robust security measures in place to protect against cyber-attacks and data breaches.
Conclusion
Distinguished Guests, Ladies and Gentlemen, to conclude, Africa missed the first industrial revolution which saw the transition from manual small-scale production to mechanized production in agriculture and goods like textiles, mostly powered by steam and coal energy. Then we missed the second industrial revolution where the widespread use of electricity powered mass production and assembly lines. The third industrial revolution which was set off by the introduction of computers also did not see Africa jump on and develop like others.
We are now in the fourth industrial revolution where the technologies have come together in a global network to create the internet, which is the greatest machine ever created by mankind, and using that to also energize tools and equipment to make them ‘smart’ to create the internet of things (IOT), and Artificial Intelligence (AI), which have opened up amazing possibilities with no end in sight. AI is a major opportunity for Africa to increase growth and development.
The opportunities presented by data analytics and AI are endless. For example, we can analyse medical records in the health sector to identify disease patterns and improve patient outcomes. In agriculture, we can use data to optimize crop yields and ensure food security. We can use data to improve traffic flow and reduce congestion in transportation.
African governments must ensure we do not miss out on this opportunity. Establishing an economy with strong digital foundations is the surest way for Africa to take full advantage of this great new world.
We must forget about the past and also forget incremental progress. Just like we skipped landline phones and moved straight to cellphones; just like we skipped universal banking for all and have implemented digital banking systems on mobile phones for our people, which they have taken up in the millions.
We must build and use digital platforms like we have done and even surpassed some developed economies in some areas, we can move ahead in other sectors as well. The advantage Africa has in this area is that we don’t have legacy systems to worry about so we can just leapfrog.
Indeed we have no choice if we want to re-imagine our own development and grow on our terms instead of others deciding that we are only fit to be a source of raw materials and migrant labour. We are defining and re-imagining our growth path on our own terms. We are not being asked by the IMF or World Bank to pursue this path.
The truth is that while African countries are politically free, we still have a mindset thar is shackled by the experience of 500 years of slavery and colonialism. We don’t believe in ourselves. The dominant mindset is one of impossibility. We need to break the shackles of the impossibility mindset and embrace the mindset of possibility! It is time for us to figure out the best ways to be masters of our destiny, to chart our own path and develop on our own terms. It is Possible!
Thank you for your attention.
