High tech prices, an obstacle to the advanced digitalization of businesses in Africa

High tech prices, an obstacle to the advanced digitalization of businesses in Africa
High tech prices, an obstacle to the advanced digitalization of businesses in Africa

“Digital equipment and software cost more, in US dollars, in Africa than in other regions, discouraging businesses from adopting them »note experts from the International Finance Corporation (IFC) – the arm of the World Bank dedicated to the private sector – in a new report entitled Digital opportunities in African companies”. According to the survey, digital machines and equipment cost 35% more in sub-Saharan Africa than in the United States. If the gap is less virulent in North Africa, it still remains considerable. Thus, companies must pay 13% more than entities in the United States to obtain digital equipment. Likewise, importing digital goods is equally expensive, due to high customs duties.

The Middle East is the best-off region because digital products there cost 2% less than in the United States, according to the report. Europe and Central Asia rank second with prices 5% higher than in Uncle Sam’s country.

In a digitalized world, the benefits of technology for businesses – both in terms of digital transformation and extensive digitization – are no longer in doubt, as studies and analyzes have explored the subject in depth. In a document published in 2023, the PwC firm reported that in a country like Morocco for example, business owners were ready to take on various challenges in order to develop their competitiveness in a context of accentuated technological disruptions marked by advent of artificial intelligence (AI), the metaverse and blockchain.

In addition to the high cost of digital products, the study highlights that African companies are also faced with the costs of digital infrastructure, which is often insufficient in several countries, and that of highly qualified talent, which is higher in Africa than in other regions of the world. Electricity is also not left out, on a continent where permanent access to electrical energy is a real challenge, in many countries.

Obstacle for some, opportunity for others

If tech prices on the continent represent an obstacle to the latest generation digitalization of many companies, IFC experts nevertheless see it as an opportunity for digital service providers and the financial sector. “ Digital technology providers, especially startups, can design new digital applications and platforms offering affordable and user-friendly solutions to perform specific business functions.they explain Financial sector providers can expand their markets to finance these new digital solutions, as well as finance digital technologies that leverage business information ».

For the IFC, the proliferation of submarine cables across the continent will have a positive impact on connectivity prices, provided that governments make regulations advantageous for investments in this area.

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