The digital economy offers Eswatini a range of opportunities to improve economic development and enhance public and private services, highlights a World Bank Digital Economy Diagnostic for Eswatini that launched today.
The report provides an assessment of the five pillars of Eswatini’s digital economy comprising digital infrastructure, digital platforms, digital financial services, digital skills, and digital entrepreneurship.
The Digital Economy for Africa (DE4A) is part of the World Bank’s support for the Africa Union’s Digital Transformation Strategy for Africa, which aspires to see every African person, business, and government digitally enabled by 2030.
Eswatini could benefit from a digital revolution, with the potential to drive sustained and inclusive economic growth and provide much-needed jobs to the country’s young workforce. The accelerating pace of technology diffusion could provide an opportunity to unlock new channels for access to quality public and private services.
“Climate smart agriculture will benefit farmers, who represent 70% of Eswatini’s population, by increasing the productivity of their lands and enhancing their livelihoods. Implementing the recommendations of the Digital Economy Diagnostic for Eswatini would make a tangible contribution to the development of Eswatini’s economy,” says Marie Francoise Marie-Nelly, Country Director for South Africa, Botswana, Namibia, Lesotho and Eswatini.
The Digital Economy Diagnostic for Eswatini seeks to support government institutions and stakeholders by taking stock of the current state of the digital economy and provides recommendations for further development. This was achieved through an assessment of the five foundational pillars of the digital economy in Eswatini, based on consultations with relevant public and private stakeholders.
In the area of digital infrastructure, the assessment found that penetration rates remained low. In 2021, it was estimated that the mobile broadband penetration was only 35%, when calculated with unique subscribers.
The usage gap is largely attributable to the lack of affordability of both fixed and mobile internet services. In addition, digital infrastructure is underdeveloped, mainly due to the lack of competition in the broadband sector. The diagnostic recommended investment to improve digital infrastructure to meet increasing demand for broadband services.
It also notes that together with the introduction of key regulatory safeguards, the unbundling of the Eswatini Posts and Telecommunications Corporation (EPTC) will be a key step in improving access and affordability of broadband services in the country.
With regard to digital platforms, the report noted there is a significant opportunity to strengthen compliance, efficiency, and transparency in the public sector by improving public sector platforms; and an opportunity to improve the experience and benefits of public and private sector digital platform users. Digital platforms such as e-commerce marketplaces and digital financial services were found to be underdeveloped and thus underused.
As a result of Eswatini’s collaborative efforts to modernize the payments landscape for more than two decades, digital financial services benefit from a solid financial infrastructure on which innovative digital financial services can be anchored.
Eswatini authorities, amongst others, are committed to promoting digital solutions and improving access to financial services, which is demonstrated through the establishment of a financial technology (Fintech) unit at the Central Bank of Eswatini (CBE). Overall, the assessment notes that the digital financial services ecosystem is still evolving, with existing initiatives narrowly focused on the payments segment and largely driven by mobile money.
Ensuring full interoperability between banks and non-banks, as well as between mobile money services, would be an essential prerequisite for advancing further adoption, affordability, and innovation.
The diagnostic found that digital skills development is significantly hampered by the limited availability of adequate educational curricula and quality training, despite the growing demand and importance of digital skills in Eswatini.
The report recommends that the Government of Eswatini should establish comprehensive policies and implementation plans for building digital skills, in order to support a digitally literate population and digitally competent workforces.
With regard to digital entrepreneurship, the report notes that after Lesotho, Eswatini’s entrepreneurship ecosystem is the least developed in the Southern Africa region. The private sector in Eswatini is largely comprised of micro-entrepreneurs and businesses, which tend to be operated by subsistence entrepreneurs.
The assessment highlights the Government of Eswatini’s commitment to supporting digital entrepreneurship, which is evidenced by the establishment of the Royal Science and Technology Park, a parastatal agency under the Ministry of Information, Communication and Technology (MICT), which includes an incubation center for digital and digitally enabled firms.
Lastly, the report highlighted cross cutting issues which include recommendations to improve institutional coordination; bridging the urban-rural digital divide in terms of differences between rural and urban populations’ access to digital infrastructure and digital services; addressing remaining regulatory gaps; and strengthening implementation of the legal and regulatory framework.
The public sector plays an important dual role in this new environment, both as a user of digital technologies in delivering key products and services, and as a regulator of the functions and activities associated with the digital economy.
The Government of Eswatini is cognizant of the importance of digital transformation. The Information Communications Technology (ICT) sector has been recognized as a driver for economic growth and sustainable development and, consequently, is highlighted as a national priority in Eswatini’s National Development Plan (NDP) 2019-2022.
“This strategy will revolutionize the country’s digital economy, providing a comprehensive roadmap for growth and integration into the wider economy. The strategy outlines policies, investments, and infrastructure needed to foster a dynamic and innovative digital sector, generating economic growth and job opportunities,” says Honorable Minister of Information, Communications and Technology, Her Royal Highness Princess Sikhanyiso Dlamini.
Overall, the diagnostic’s findings show that the potential of the digital economy in Eswatini has not yet been fully realized. A coordinated and holistic approach will be needed to build an inclusive digital economy, as each of the foundations play an important role in their own right, but also depend upon and reinforce the others.
The government’s ability to develop digital platforms and leverage technology for improved efficiency and service delivery is key to enable the interlinkages between the pillars and create synergetic effects. The combined effect of these improvements is larger than their sum.
Sources: THX News & World Bank.