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20.06.2019 Article

Digitalization Of The Economy: Is Ghana Ready To Blaze The Trail In Africa?

By Alex Ababio

SatyaNadella, Chief Executive Officer, Microsoft Corporation, USA has stated:

“I’m most grounded on the role of technology. Ultimately to me it’s about the human capital and the human potential and technology empowers humans to do great things. You have to be optimistic about what technology can do in the hands of humans.”

According to a new study by Accenture (NYSE: ACN), Optimizing the use of digital skills and technologies could generate $2 trillion of additional global economic output by 2020, the study also reveals the vast role digital plays in economic activity, with more than one-fifth of the world’s gross domestic product (GDP) attributed to some form of digital skills, capital and goods and services.

Businessdictionary.com defines Digitization as a conversion of analogue information in any form (text, photographs, voice, etc.) to digital form with suitable electronic devices (such as a scanner or specialized computer chips) so that the information can be processed, stored, and transmitted through digital circuits, equipment, and networks.

In the modern era, digitization, the mass adoption of connected digital services by consumers, enterprises, and governments, has emerged as a major force of socioeconomic reimbursements. It is undeniably clear that, notwithstanding harsh global economic conditions, digitization can play a key role in assisting policymakers to speed up economic growth and employment.

Nevertheless, according to management consulting firm Booz & Company’s econometric analysis, its impact on countries and sectors strongly varies. Within developed economies, digitization enhances productivity and has a quantifiable impact on growth and development; however, it can be a major cause of job losses.

Comparatively, emergent markets are inclined to gain more from digitization’s effect on employment than from its influence on growth.

In view of this consequences, in order to maximize the benefits of digitization, policymakers must endeavor to plan in a way to identify how they would effectively digitize specific sectors of the economy and thereby augmenting capabilities of economic movers to help achieve maximum impact.

According to Businesswire.com, ‘’A little more than one-fifth (22 percent) of world output is linked to this digital economy of skills and capital. The US is the world’s most digital economy, with existing digital investments accounting for 33 percent of its output. Forty-three percent of the U.S. labor force and 26 percent of its accumulated capital are capable of supporting digital related activity. The digital economy in other markets varies from more than 30 percent in the UK and Australia to 10 percent in China’’.

Indeed Ghana can follow the footsteps of these economic giants to rack in some digital structures to enhance its economic growth and development. And in as much as the country is searching for a digital space in its quest to consolidate its economic drive and growth, it is also pertinent for the country to be mindful of the side effects of digitization; at least if for nothing it should learn from other developed countries that were able to mitigate its negative effect on their economies in terms of job losses.

CREATING THE RIGHT ENVIRONMENT FOR THE DIGITAL REVOLUTION IN GHANA

It is a step in the right direction for the government to kick-start the national ID project and digital addressing system project to create the right infrastructure which is so essential to a modern-day digitization economy. It was so refreshing to hear the Vice President of Ghana, Alhaji Dr. MahamuduBawumia at the National Policy Summit in Kumasi, stressing Government’s commitment to digitize Ghana’s economy.

’’Distinguished ladies and gentlemen, an equally important and modern policy focus of this government has been formalization of the economy through digitalization and enhanced financial inclusion. We have been aggressively pursuing these policy objectives in diverse ways:

‘’First, is National ID Cards. The objective is to provide unique identification numbers for all residents in Ghana. This is critical for the governance and progress of a country. No modern economy exists without such unique identification. Issuance has started and should be completed in a year. The Ghana Card will also be an E-passport for ECOWAS travel. The data for other cards such as the NHIS card can also be captured on the Ghana Card.

Second, is Digital Property Addressing. Last year, we introduced a Digital Property Address System with unique postal codes for every 5 by 5 meter location within Ghana. This is managed by the Ghana Post Office and will allow the easy location of addresses as well as delivery of goods and services across the country. It will also facilitate e-commerce.

Third, is Mobile Money Payments Interoperability. We have launched the mobile money payments interoperability system that allows the transfer of funds from mobile money accounts to bank accounts (back-to-back) and from mobile or bank accounts to biometric payment card accounts (ezwich). We have already seen significant improvements in the velocity of money via the interoperability system and the volumes of such transactions.’’

According to Vice President Alhaji Dr. MahamuduBawumia Mobile Payments Interoperability, along with the Real Time Gross Settlement System, Automated Clearing House for Direct Debits and Credits, Instant Pay, Ezwich biometric card payments, CodelineCheque Truncation, and a National Switch has made Ghana’s payments system architecture one of the most advanced in Africa.

‘’Going forward we intend to integrate all the above payment channels to provide a platform for receipt of all government payments electronically. We expect to launch this next year, all things being equal (fingers crossed). The kind of digital payments architecture that we are building should enable the filing of tax returns and paying taxes electronically.’’

He also stated that they introduced a digital drivers and vehicle licensing system that issues smart drivers licenses and vehicle registration. ‘’The ‘Goro’ boys or middlemen have disappeared from the DVLA. In the next few months the DVLA and the Insurance companies will get on a new digital platform which will make it impossible to register a vehicle without insurance. It will also make it possible for law enforcement officers to determine the insurance status of a vehicle instantaneously.’’

It was also important that The New Patriotic Party, NPP, Government has begun the process of digitalizing all land records to make land searches online, and acquisition and title registration hassle-free. This will allow for the development of a vibrant mortgage market in Ghana.

It is also good that Registrar General has also launched E-business registration and certification. This is aimed at improving the ease of doing business in Ghana.

To step up the fight against crime, the Ghana Police has also launched an emergency 191 number for the citizens to call the Police for necessary intervention. This number can be dialed from anywhere in the country.

The Judicial Service has also started the process of implementing an E-case tracking system in the various courts.

Port Reforms
Last year the Government of Ghana started implementing a paperless port process to, among other things, improve the turnaround time for clearing of goods, reduce cost and bring about efficiency.

This has helped reduced the number of regulatory agencies doing joint examination at the ports from 16 to 3. Prior to the port reforms, it took more than a day to get goods examined at the port as agencies related to the inspection of goods were usually not available at the same time. This meant that, importers had to comb the port looking for officers from the agencies to inspect their goods for clearance.

Removed internal Customs barriers on all the transit corridors.

Abolished the Compliance stage of the clearance process since it has become redundant under the new paperless system. This function will be undertaken by the Customs Technical Services Bureau (CTSB).

E-COMMERCE
To move alongside Industrial revolution there is the need to equip our human resources with knowledge and brain power to take control of the traditional Land, Labour and Capital to maximize tremendous opportunity around us. In view of this we have to build our young population, armed them with digital devices, to build digital softwares that will create the global companies of today and tomorrow and conscientise our people to scale globally without infrastructure, a phenomenon described in the new business jargon as, ‘infrastructureless SCALING’ which describes the new digital companies.

ECONOMIC IMPACT OF DIGITISATION
To keep the pace of global phenomenon of digitization Ghana has to double its digitisation index score for the poorest citizens within 10 years and this will move the country to the first world in a decade.

(Alex Ababio is the Executive Director of African Liberators Economic Institute)

Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not neccessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

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