Big pot of gold at the end of the path to digitization can lure us into believing that most countries are speedily heading towards it. Many are not. Digitization remains constrained by the poor state of internet connectivity. In sub-Saharan Africa, only 20 percent of the population subscribes to the internet. When people subscribe, they use it sparingly: The average user consumes 300 Megabytes per month, roughly enough for half an hour of video conferencing.
Addressing these constraints has little to do with AI, big data and an army of coders. The first steps to digitization are decidedly unsexy and very analog. Governments need to address vested interests, monopolization and regulatory barriers in connectivity markets to get people connected to the internet.
Internet requires a seamless integration of different providers. It travels through undersea cables, landing points, fiber landlines and wireless masts into the phone of the end-user. If one provider in this chain holds too much control, it can hold players downstream hostage to its pricing power and faces few incentives to upgrade its network. Even where companies compete, markets are not necessarily open for new entrants: Regulatory capacities to close down on collusive behavior and to enact important enabling regulations – such as granting new competitors open and fair access to existing infrastructure networks – are in many cases insufficient or absent. Companies may find it attractive to ask for exclusive contracts. But investment that is contingent on adopting anti-competitive practices can end up blocking digital development.