Kenya and the World Bank Group Provide a $390 Million Boost the Digital Economy

The World Bank Group Board of Directors approved $390 million in financing for the first phase of a program that aims to expand access to high-speed internet, improve the quality and delivery of education and selected government services, and build skills for the regional digital economy.

The Kenya Digital Economy Acceleration Project will use a multi-phase programmatic approach (MPA) with two phases where phase one will run from 2023-2028, focusing on expanding access to high-speed internet, improving the quality and delivery of education and selected government services, and building skills for the regional digital economy, and phase two will run from 2026-2030, concentrating on building a data driven and secure environment for enhanced digital service delivery and innovation for the regional digital economy. The project will also mobilize an estimated $100 million in private capital by crowding-in the private sector for broadband infrastructure development.

“Broadening access to digital technologies and services is a cross-cutting pathway to accelerate economic growth and job creation, improve service delivery, and build resilience,” said Keith Hansen, World Bank Country Director for Kenya, Rwanda, Somalia and Uganda. “The Kenya Digital Economy Acceleration Project aims to help make Kenya’s growth more equitable by shrinking disparities in digital skills and connectivity, and expanding the digital marketplace.”

While Kenya has made impressive gains, there remains a persistent digital divide in access to broadband, digital public services, and the skills needed for individuals and businesses to thrive in an increasingly digitized economy and society. Kenya needs the economies of scale and network effects of a larger and more competitive regional market to achieve its vision to become one of the premier digital investment and innovation hubs on the African continent. Likewise, the lagging countries in the sub-region would benefit from greater access to Kenyan innovation and services.

“The initiative will increase last mile connectivity by boosting broadband network coverage for over 70% of Kenya’s population that resides in rural and underserved areas,” said Tim Kelly, Lead Digital Development Specialist at World Bank. “Kenya’s digital agenda, reflected in the ambitious ‘ICT Master Plan’, aims to transform the country into a regional ICT hub by increasing fiber optic coverage to 100,000 km and digitizing 80% of public services.”

The project will increase access to broadband through an expansion of the fiber optic backbone and last mile connectivity to government and learning institutions, as well as along Kenya’s borders, benefiting the regional digital market. The project will also boost digital skills to support the uptake of digital services and the development of a competitive labor force for the digital economy, and enhance access to regional and global markets through regulatory and policy harmonization with regional initiatives. As such, it aims to strengthen Kenya’s capacity to drive regional digital integration with positive spillovers to other countries. Expanded access to connectivity will also reduce the need for travel to access information and services thereby minimizing the carbon emissions footprint, and facilitate service delivery in times of emergencies requiring remote operations.

Africa’s Time Has Come

Foreign direct investment into Africa is on the rise, and with the population set to reach 1.7 billion by the end of the decade, this sleeping lion of a continent is focusing international minds. Sub-Saharan Africa in particular, with its rich well of natural resources the world covets, is seeing growth its suitors can only dream of.

Beyond natural resources and infrastructure, Sub-Saharan Africa is now diversifying its allure to encompass the tertiary sector. This has seen significant new investment into logistics and ITC services, and while the Covid-19 pandemic saw FDI inflows heavily impacted, in this the region was not alone and things have since bounced back.

One anomaly throughout it all was the renewable energy sector where investments continued unabated. This is something likely set to continue, due to significant challenges around the importing of oil and gas; a consequence of the war in Ukraine, which has made Russian energy imports toxic and harder to rely upon, as well as strict OPEC controls on production, supplies and prices. In addition, the appeal of home-grown energy has massively increased, given the rapid global shift to EVs.

On the subject of EVs, Africa is blessed with the right resources including cobalt, lithium, manganese and nickel, with the Democratic Republic of Congo and South Africa seemingly in pole position to reap the benefits.

With numerous natural resource-hungry megaprojects either under construction or greenlighted for the next few decades to come, China’s appetite for Africa’s bounty is large indeed. And, with competition for wielding influence over the same resources from the US – hard-wired to compete for pre-eminence anywhere its rival is active – as well as a determined African-focused agenda from European nations unwilling to relinquish historical economic ties, Sub-Saharan Africa finds itself subject to charm offensives from numerous suitors. Yet, in theory at least, this time, the constituent host countries are in the driving seat, so long as the institutional framework and capacity building is sufficiently strong to effectively negotiate and enforce investment agreements and manage the distribution of revenues in order to deliver a long overdue uplift in living standards and employment opportunities for its rapidly growing population.

SA’s Mining Companies Are Creating Value And Discovering The Future

PwC South Africa, together with Minerals Council South Africa, is pleased to share its second publication on The state of digital transformation in the South African mining industry: Ten insights into 4IR 2023. The publication encompasses new insights, validates existing ones from our previous report, and articulates mining organisations’ commitment to using digitalisation and technology for the ultimate creation of business value in the mining sector.

Please find and download the full 2023 report here: insights-into-4ir.html

Roger Baxter, Minerals Council CEO, says: “Digital transformation is imperative for mining — a non-negotiable if you like — as it serves as the seamless thread through all the mining value chain processes, and enhances safety and health, security, production, and workforce and leadership capability. The implementation of these processes needs to be executed with care and responsibility.”

The first survey, which was conducted in 2021, focused purely on digital transformation and 4IR readiness. The scope of our latest report was expanded to include environmental, social and governance (ESG) aspects to bring the industry in line with what is expected of companies in the modern world. While survey respondents were predominantly CEOs, and/or nominated senior leaders from mining companies, organised labour representatives and mining engineering graduates also participated. The aim was to search for a broad range of opinions in an effort to understand the implications of digital transformation on South African mining.

The ten insights covered in the report are:

1. Mining CEOs and their executives are being deliberate
Compared to 2021, mining CEOs now are focused on innovation rather than a top-down initiative-based approach. In our previous survey, we saw CEOs driving the digital agenda from the top. Since then, there has been greater digital adoption as employees see the value of these solutions. As a result, digital solutions are now embedded in every initiative, which means the benefits of this can be more easily tracked. According to the survey, 100% of respondents are making the transition to digital, including using technology for their ESG programmes.

2. Technology is being applied where it has the greatest measurable benefit

Digital tools are providing miners with visibility and transparency of their business by reducing bureaucracy and, ultimately, providing them with the ability to make better decisions.

3. The hunt for value requires cooperation and compromise
Cost leadership, efficiency, and profitability remain the number one concern of mining CEOs, with overall business sustainability and longevity coming in second. The fight for capital allocations is based on measured benefits, which has been a challenge in the past for digital programmes.

4. Digital tools don’t just measure, they contribute (the union perspective)
Labour unions are key stakeholders in the mining industry and have a unique perspective on the value of digital and 4IR. Two surveyed unions say digital technology is essential to improve health and safety, and plays a key role in communication, but that its greatest value is in providing workers with the insights they need to be successful.

5. The imperatives for sustainability, and the crown jewels
Data is at the centre of business success and sustainability in this new world, and data will be the most intensely managed part of the mining business over the next ten years as trustworthy information is needed in real-time. This brings with it the need for Artificial Intelligence, machine learning and other big data technologies to make sense of large data sets.

6. We are up to the challenge and have the tools we need to win
South African miners have not been satisfied with the progress in digital and 4IR transformation in the past few years. Mining CEOs agree that we have spurred on the development, use, and understanding of technology in the mining space, but unanimously agree that we could have done better.

7. Mining is about people and we need to fight globally for talent
Leadership is key, however culture can replace scarce skills. The publication looks at how mining needs to create an environment that attracts young talent in a world that also needs data scientists and digital natives.

8. ESG critical for business survival or tick-box?
While ESG may be one of the latest buzzwords related to business and sustainability, the response to ESG drivers is not in any way new to the mining sector. However, the way in which mining companies in South Africa need to engage with these drivers is changing. This requires a fundamental rethink in terms of the risks and opportunities presented by these drivers and the underlying systemic changes they demand.

9. ESG regulations shape ESG requirements (for better or worse)
While legislation drives the responsible business agenda for our mining industry, embedding ESG into your organisation is more than just compliance — it is centred on the ability to create long-term value.

10. ESG drives long-term value
Without a blueprint or clear regulations, miners have chosen their own preferred path and reporting for ESG. While unions say there is less focus on social and governance issues, all parties regard ESG as a path to a sustainable mining future, with digital as the means to accomplish these goals.

Ian Mackay, PwC Smart Mining Senior Manager, says: “Digital transformation and ESG practices are paying off — qualitatively and quantitatively. Digital is successfully competing for capital in mining as it is providing measurable benefits and delivering real change.”

What is also encouraging from the survey is that the ownership of the digitalisation strategy is no longer a business unit — instead, we find digital embedded in every project, and a renewed focus on measurement of real-world results.

Chrisna Evans, PwC Mining Operation Transformation Associate Director, concludes saying: “There is an increase in the number of mining organisations investing in digital journeys, compared to the previous study. Based on where mining entities are on their journey, the next five years will present a potentially transformed mining sector and will eventually result in integrated digital mining operations that embrace the organisation’s value drivers and the benefits of 4IR.”