Dr Velenkosini Matsebula is a Senior Lecturer in Development Finance at Stellenbosch Business School. Image: Supplied.
By Dr Velenkosini Matsebula
As we commemorate Africa Day, we are reminded of the continent's rich cultural heritage, its vibrant diversity, and its people’s resiliency.
This day serves as a beacon of unity and progress for Africa. However, beneath the celebration lies a critical reflection on the challenges and opportunities that define Africa's journey towards sustainable development.
In today's interconnected world, the power of innovation stands out as a transformative force capable of driving Africa towards greater inclusive growth and development. The continent is a flourishing hub of creativity and technological advancement, offering a fresh perspective on solving long standing challenges while advancing economic empowerment.
Despite abundant natural resources and a population that is predominately youth, Africa faces significant challenges of underdevelopment, ranging from poverty and infrastructural deficits to gaps in education, health crisis and political instabilities. While these challenges pose a threat for the continent’s growth potential, they also present vast opportunities for innovation.
According to the African Development Bank, Africa's economy has the capacity to transform through technological and creative innovations, with the potential to reach a $5 trillion economy by 2030. Some practical examples are already at play, such as the mobile banking revolution, led by platforms like M-Pesa, and the vibrant startup ecosystem. These alternative banking platforms have significantly transformed financial inclusion across the continent, demonstrating how innovative solutions can dramatically impact people’s everyday life, and the growth in the startup ecosystem is a clear testament to the entrepreneurial spirit in the continent. Cities like Cape Town, Nairobi, and Lagos, have become hotspots for tech startups, attracting significant global investments.
Moreover, innovation is particularly crucial for Africa because of the rapid global technological evolution which demands the continent not only to catch up, but to also leapfrog traditional stages of development. The COVID-19 pandemic has shown how important digital technology and innovation is in keeping societies functional in the world of restricted physical interaction. While with the growing impacts of climate change, innovative approaches also provide solutions for inclusive infrastructure for key aspects such as sustainable agriculture, water management, and renewable energy.
Inclusive growth is about ensuring that the fruits of innovation and economic progress are shared equitably, not just concentrated in urban areas or among the elite. To harness innovation for inclusive growth, African must take deliberate strategic actions:
Enhancing Digital Inclusion is one of the most impactful tools for inclusive growth. Rural and underserved communities can be empowered through the expansion of internet connectivity as this translates to provision of access to e-learning, telemedicine, and online markets. Rwanda and Ghana’s Zipline's drone delivery service are examples of how innovation can revolutionize services like medical supply chains, ensuring access to essential healthcare products in remote areas in a timely manner.
Innovating Approaches for Sustainable Agriculture is vital for inclusive growth in Africa, especially considering that agriculture employs over 60% of Africa's population. With most of them consisting of smallholder farmers who are predominantly women. Smallholder farming can be transformed into a more productive and sustainable enterprise using technologies like precision farming, which uses IoT and AI to optimize crop yields and reduce waste.
Education and Skills development is crucial for preparing Africa’s youth for the future, and this can be achieved through innovative solutions. Digital platforms can be used to equip the youth with skills that are crucial in the global digital economy. Moreover, innovation can further be sustained by investing in STEM education and digital literacy.
Building Resilient Infrastructure for Clean Energy and Transport among others is crucial for inclusive growth, as these services can be accessed in an affordable manner. Innovative renewable energy solutions, such as solar microgrids and wind turbines, can provide remote communities with power, support local businesses, improve living conditions, and overall contribute to addressing the energy supply crisis faced by the continent. While innovative transportation approaches can make commuting and intercity connectivity efficient.
Improving Inclusion by leveraging fintech innovations to bridge the financial divide, offering unbanked populations access to credit, insurance, and savings products, as well as ensuring that innovation addresses the needs of all segments of society, including women, rural populations, and marginalized groups is critical for inclusive growth.
Nurturing Small and Medium Enterprises (SMEs) and Entrepreneurship plays a critical role in transforming innovations into tangible products and services and growing the economy. For Africa SMEs are the backbone of the economy, accounting for up to 80% of employment in some countries. Startups can be supported through developing incubators and accelerators to provide mentorship and access to finance. While the innovative fintech solutions can be leveraged to provide financing solutions for start-ups and SMEs.
The collaborative efforts between governments, the private sector, and international organizations can accelerate the deployment of these innovative solutions. The government has a leading role to play through providing regulatory frameworks, Policies and Resources that support entrepreneurship, protect intellectual property, and provide startup funding. As Africa continues its growth journey, the role of innovation in achieving inclusive growth cannot be overstated. The celebration of Africa Day should not only reflect past achievements but also a call to action for a future where innovation paves the way for Inclusive Growth in the continent.
Dr Velenkosini Matsebula is a Senior Lecturer in Development Finance at Stellenbosch Business School.
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