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COVID-19 offers Africa lifeline to play in global digital economy, experts say

Will geopolitical tensions reshape global trade?

The COVID-19 pandemic may have thrown a lifeline to African countries to become active participants in the emerging global digital economy currently dominated by countries in North America, Asia and Europe.

Experts who spoke during the BusinessDay Digital Dialogue on Wednesday said although the continent has persistently lagged behind the rest of the world in terms of innovative approach to running the economy and industrialisation, the hard reset forced by the pandemic gives the continent an opportunity to take a different direction than it was used to. And while the government has a role to play, the private sector needs to drive this new direction.

The dialogue, jointly organised by BusinessDay and Rack Centre, was anchored by Ngozi Chidozie, partner, managing consulting at KPMG Nigeria. The panellists included Ayotunde Coker, CEO of Rack Centre; Bunmi Akinyemiju, CEO of Venture Garden Group; Omowale David-Ashiru, vice president, global operations, Andela; and Juliet Ehimuah-Chiazor, country manager of Google Nigeria.

Africa has over 119,454 confirmed cases of COVID-19, more than 3,592 deaths and 48,607 recoveries, making the continent the least affected continent globally. However, the continent has not fared any better economy-wise as countries like Nigeria have been hit hard by the virus.

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According to the latest data from the National Bureau of Statistics (NBS), the country’s Gross Domestic Product (GDP) rose by 1.87 percent (year-on-year) in real terms, representing a drop of 0.23 percent points compared to the first quarter of 2019 and 0.68 points decline compared to the fourth quarter of 2019.

While many industries have been negatively impacted by the pandemic, sectors like software, media streaming and ecommerce are witnessing boon in their services, Chidozie noted, citing a report. This underscores the need for investments in digital infrastructure in Nigeria.

Ngozi Chidozie also highlighted the eight themes that will characterise the journey to a “new reality”. These include ways of working; workforce; digital commerce; supply chain and manufacturing; continuity and resilience; environment and climate change; and debt and globalisation.

Ayotunde Coker noted that while building infrastructure is a long-term project, Nigeria has already started from a “good place” with the existence of world-class data centres like Rack Centre.

“People will see the high quality in digital infrastructure because of the realisation that digitalisation is important,” Coker said.

Bunmi Akinyemiju said it also depends on how the government responds with policies and regulations. Bold regulations that are forward-looking and progressive would show the extent of seriousness and how far the country would go in adapting to the new normal. Akinyemiju also said the COVID-19 would likely accelerate the implementation of the AfCFTA and enhance collaboration across the continent.

COVID-19 also presents an opportunity for businesses to reset their models.

“For businesses to successfully pivot to digital, leaders need to examine their business processes, customer engagement, supply chain management and employee engagement,” said Juliet Ehimuah-Chiazor.

However, businesses that fail to adapt to the new normal can look forward to becoming part of another company in an acquisition spree Omowale David-Ashiru said is coming post-COVID.

“Post-COVID-19, there is going to be a lot of acquisitions of businesses that suffered during the crisis,” she said.