Country Diagnostic Tool v2

September 10, 2020

"Digital Economy can bring Shared Prosperity and Reduced Poverty"

Digital transformation has been fully embedded in the MNA and SSA regional strategies

Leveraging the DE4A Country Diagnostics to firm up client

Objectives

▪ Determine the current state of play of digital economy

in the country and assess key levers that drive the

country’s digital economy.

▪ Help countries maximize the opportunities and mitigate

the risks posed by digital technologies

▪ Inform WBG operational engagements.

CountryDiagnostics

DE4A Country Diagnostics Progress and Planned Studies for FY21

Last updated: August 31, 2020

* Completed assessment means DM conducted.

+ Country Economic Updates has a special focus on digital economy.++ Full DE4A assessment was conducted with additional economic updates with DE focus.

▪ By FY20, 26 have been completed (8 PubliclyDisclosable; 4 Country Economic Updates) andaround 10 studies are ongoing in FY21.

▪ All African countries with a DE4A CountryDiagnostic by FY22. CMUs to plan WPA (~150k-200k) for DE4A Country Diagnostics to informSCD / CPF and WBG operational engagements.

▪ DE4A Country Diagnostics V2 intends to providemore precise guidance to teams to strengthenhomogeneity (recognizing specificities oftransitioning countries), alignment of indicators withthe DE4A scorecard, prioritization ofrecommendations in the executive summary tobetter inform WBG operational engagements,communication guidelines for dissemination

▪ All new Diagnostics will be based on Version 2 ofthe DE4A Country Diagnostics Tool.

.

What You Need to Know

Lucine Munkyung Park

DE4A Country Diagnostics Cycle

Step 01

Report Disclosure(In-countryWorkshop)

Report Edit & Design

Desk Research

Stakeholder Consultation

▪ Timeline of 8-10 months ▪ Estimated cost: 150-200k

Concept Note Review Meeting

Step 04

Step 06 Step 07 Step 08

ReportWriting

Step 02 Step 03

Decision Meeting

ReportRevision

(stakeholderconsultation)

Step 09

Step 05

QER

DE4A Country Diagnostics Report Structure

Executive Summary

Introduction Country at a Glance ▪ Country context

Background on Digital Economy ▪

Rationale for DE Development

Diagnostic methodology

Cross-cutting Issues ▪ DE regulation, competition policy, gender, cybersecurity,

respond to covid) etc.

Pillar Section Importance of a pillar ▪ Role of the pillar in the digital economy at the national and regional level

Current Status of the pillar ▪ Development level and use (supply and demand) ▪ Opportunities, challenges, and risks to sector development in

terms of policy, legal, regulatory and institutional framework

Recommendations & Next steps ▪ Policy reforms and investment needs.

Conclusion ▪ Summary of main findings▪ Wholistic recommendation

Annex

Recommended total length of a final report is no more than 30 pages.

Key Stakeholders to engage

• Ministry of Digital Economy (if exists)

• Digital development agency or any other entity responsible for cross-cuttingtechnology solutions

• Ministry of ICT

• Regulatory Agencies (Telecom, Competition, etc.)

• Line ministries responsible for each pillar- DI: telecom; infrastructure deployment- DP: e-gov, digital ID, service delivery in key sectors (health, agriculture, education, justice)- DFS: digital payment, SOEs, central bank- DB: industry and commerce, e-commerce, regional integration (digital market)- DS: education, higher education institutions

• Ministry of Finance and related institutions: IT Department, Taxadministration, Customs administration, Public Procurement agency etc.

• Private sector (telecoms, major IT companies, etc)

Isabella Hayward & Georges Vivien Houngbonon

Lessons Learned from Diagnostic Tool v1.0

10

▪ Need to contextualize analysis

▪ Consider cross-cutting themes e.g. institutional framework, digital inclusion

▪ Highlight linkages between pillar

▪ Need to capture both supply and demand-side

▪ Refining recommendations (prioritization, timeline, capacity)

Main challengesWB TTL’s Comments on V1

11

Main tips for TTLs

▪ Sensitize the CMU and the Client

▪ Identify Client champion

▪ Get your team organized early and clarify tasks / expectations

▪ Leverage Bank staff who know the country well

▪ Exchanges across team members for understanding the environment and for more integrated report

▪ Do a data inventory in advance

▪ Map key stakeholders

▪ Try to organize a joint team mission (if possible)

▪ Terminology matters

▪ Share report template

▪ -

▪ Validate interim findings

▪ Secure green light to publish

▪ Discuss how findings can shape WB assistance available

▪ Presenting results in connection with Economic update has proven to work well

WB TTL’s Comments on V1

Main changes proposed by IFC

12

▪ Highlight the scope of challenges to the private sector

▪ Highlight the scope of interventions to include the private sector

▪ Clarify the relationship between Digital Platform and Digital Entrepreneurship

The overarching goal was to take into consideration challenges that can be

Main IFC’s Comments on V1

Expand the scope of challenges to the private sector

13

Digital Infrastructure:- Availability of data storage and processing services, e.g. data centers and cloud services- Demand-side constraints such as lack of digital skills and contents that are addressed

investment and advisory services in technology companies

Digital Financial Services:- Challenges faced by Financial Service Providers such as high cost to serve, legacy systems, lack

of business cases,- Data access & protection, risk management

Digital Businesses:- Fully account for critical barriers to digital entrepreneurship like competition, taxation, laws

surrounding foreign direct investment, recruitment of foreign workers- Recognize the critical role of access to venture capital

Main IFC’s Comments on V1

Expand the scope of interventions to include the private sector

14

Digital infrastructure- Privately-led infrastructure sharing within the telecom sector and with other infrastructure sectors- Facilitate, but also regulate infrastructure sharing through neutral/independent operators when

needed- Public private partnership to attract private sector investment

Digital financial services- Consider interventions that address lack of access to savings, loans, risk mitigation and other

financial instruments for consumers as well as MSME and smallholder farmers- Support the development of use cases- Capacity building for Financial Service Providers, brokering of partnerships and development of

business case, and risk sharing/ underwriting of new asset classes

Digital Businesses- Building an ecosystem fortechnology companies (digital startups and established digital businesses)- Recognize the role of investment in technology companies in supporting digitalization of traditional

businesses

Main IFC’s Comments on V1

Clarify the relationship between Digital Platform and Digital Entrepreneurship

15

Clarifying the distinction between digital platforms run by government and those operated by privatecompanies:- the two pillars are now labelled Public and

Reduce the overlapping between the digital private sector platforms sub-pillar and the digitalentrepreneurship pillar: now merged and labelled

V1 was largely dedicated to adopters of digital technology solutions. New version has placed anemphasis on digital technology companies (startups and established companies)

Areas for further consideration include:- Theory of change for Digital Businesses, clarifying the links with digital skills and e-government- Data centers and cloud services- Infrastructure sharing through independent operators

Main IFC’s Comments on V1

Mavis Ampah

Developing an Ecosystem Approach –Connecting the Dots

Key role of the Executive Summary and identifying priority reform areas

Achieving good country-led outcomes in digital transformation

Approach principles

ComprehensiveTaking an ecosystem approach that looks at supply anddemand and defies a narrow silo approach in defining therequisite elements and foundations for digital economy.

TransformativeAiming at a very different scale of ambition beyondincremental of success.

InclusiveDigital Economy for in every place, and at all

creating equal access to opportunities and dealingwith risks of exclusions.

Homegrown

Based on realities and unleashing the Africanspirit of enterprise to have more homegrown digitalcontent and solutions, while embracing what is good andrelevant from outside the continent.

Collaborative

Dealing with the digital economy requires a differentflexible requiring different type of collaborationamong countries, among sectors and among Public andprivate players, facilitation, retooling and encouraging risktaking.

Cross cutting areas:

• Strong regulatory frameworks to foster competition and MFD agenda

• Manage risks: data privacy, cyber security

• Opportunity to empower women and apply to FCV

DIG

ITA

L S

KIL

LS

DIG

ITA

L P

UB

LIC

P

LA

TF

OR

MS

USE CASES

APPLICATIONS LIKELY TO DEVELOP ONCE THE FOUNDATIONAL ELEMENTS ARE IN PLACE:

• GOVTECH applications

• E-COMMERCE adoption

• OPEN BANKING: non-banks offer tailored services

• DATA LOCKERS to access selected services

DIGITAL INFRASTRUCTURE

DIGITAL FINANCIAL SERVICES

DIGITAL BUSINESSES BUSINESSES

Digital Economy foundations / pillars

Executive Summary - Most Critical for Decision Making

Linkages between DE and Govt priorities, WBG twin goals, AU Agenda 2063; contribution to poverty reduction & inclusion

Rationale for DE4A: Why digital matters for country, Africa & in particular for Covid mitigation 1

2

3 Rationale for ecosystem approach/selection of pillars

4 Linkages between pillars; how cross-cutting issues relate to DE & each pillar; roles of private/public sectors

5 Linkages between DE and regional integration/single market

6 Opportunities/challenges to leveraging DE for addressing national/regional priorities

7 Impactful recommendations; action plan; internal/external coordination for operationalization of DE4A

Tim Kelly

Pillar1. Digital Infrastructure

Pillar1. Digital Infrastructure

4

1

2

3

Policy and regulatory reform Cybersecurity

and nonvisible areas all require development

Most countries are now connected!

Abundance of cable connectivity in North

AfricaWBG has been actively

involved

Fiber backbone is an unfinished agenda for

both SSA and Northern Africa

Mobile internet is available in urban areas

Dedicated / fixed internet for schools and offices is mostly NOT

available

Internet in rural areas is NOT available

FTTH more advanced in Northern Africa and a

long way to go for SSA

Invisible Mile

Middle Mile

First Mile

Last Mile

DI-Indicators

Core Indicators: Digital InfrastructureCurrent Status Previous Status

Source

Year Value Year Value

Individuals using the internet (per 100 inhabitants)ITU. Household Indicator 7 in thePartnership for ICT for Development

Access: Unique mobile broadband subscribers (per 100 inhabitants)

UsingWB definition (see ConnectingAfrica through Broadband report, butbased on GSMA data

Quality: Average mobile broadband download speed (Mbit/s)GSMA data

Affordability: Price per month of a mobile broadband basket (prepaid, 1 GB) in US$ and as % of monthly GNI per capita

Data from

https://www.cable.co.uk/mobiles/worldwide-data-pricing/ (or collected directly during field research).

The diagnostic should start by gauging the state of development of high-speed internet in a country: The task team carrying outthe diagnostic should start by reviewing the scale of internet services available in the country

DI-Assessment Questions

Market analysis

Covering mobile, internet and fixed line networks, with a focus on broadband networks and services.

First mile: international connectivity

Is the country connected to high-speed internet via undersea international links or cross-border terrestrial links? Key indicators include total used and international bandwidth, in Gbit/s, Information on cable cuts and future plans to extend access (eg plans for new cables) can supplement the analysis

Second mile: backbone networks

Information on nationwide fiber backbone(s) (including issues such as connectivity, ownership, connectivity gaps etc. Information on Internet Exchange Point (IXP), information cabl.es (eg Google Cache and content distribution networks), Also covering issues such as utility networks, infrastructure sharing, interconnection etc

Last mile: internet services

Provision of high-speed internet access to end-users, including Government MDAs, schools, universities, hospitals etc. Rural broadband coverage, and functioning of the universal service fund (if one exists). Technology-neutral policies, and use of new last mile technologies (eg HAPS, fixed wireless access etc).

Invisible mile: spectrum, cybersecurity, privacy, data protection and robustness of policy and regulatory frameworks

Regulatory environment, fiscal environment, spectrum policy, cybersecurity arrangements, data protection and privacy legislation etc.bv

The diagnostic should determine key hurdles inhibiting growth of high -speed internet in a country: 5 broad areas of assessment for identifying hurdles that sessment may be further focused

on specific areas of the internet value-chain.

For reference, the WB/IFC DII initiative has developed and tested a diagnostic framework that was used to assess digital infrastructure in over 50 countries.

Assessing Hurdles in Internet Development

Luda Bujoreanu & Heriniaina Mikaela Andrianasy

Pillar2. Digital Public Platforms

The updated Diagnostic tool includes:

•• Focus on public sector digital platforms • Now has a useful visual (next slide) • Focus is on assessing core components (shared infrastructure) and use

cases• You will be looking at:

• Back-office Systems and backend infrastructure • Status of secure digital transactions enablers • Data exchange across government

• Specific questions are included to help guide teams (pages 38-41 of the Tool)

• A set of agreed indicators are included in complementary score card.

Pillar2. Digital Public Platforms

Digital public platforms: components

25

Interoperability & Shared Services

Core Government back end systems

Digital ID &Trust Services

Core components

Users: Businesses and Citizens

Use Cases

Secure digital transactions: Digital ID systems facilitatessecure identification and authentication, combined withdigital certificate services which allows approval andacceptance, they enable trusted transactions.

Back-office Systems : Resources to digitally manageinformation, employees, assets, and finances forgovernment-to-government (G2G) services

Data exchange across common resources: build once,use strategy combined with digital functionalityallows governments to reduce the duplication ofresources across agencies; streamline and automatebusiness processes, reporting, and analytics; and leverageeconomies of scale

▪ Increase access to rights and servicesand improve end-to-end experiences withservices

▪ Improve core government functions, governance and program administration

▪ Increase public engagement, accountability, andresponsiveness

▪ Facilitate trade and economic integration

▪ Support private sector development

Benefits

Requirements

▪ Design that is outcome- and context-based,user-centric, and uses open principles

▪ Strong legal, regulatory, and operationalframeworks

▪ Whole-of-government approach

▪ Investment in digital skills and literacy

Government - Citizen Interfaces: Channel forgovernments, people, and business to interact:Digital government-to-person (G2P) and government-to-business (G2B): delivering services across a variety ofsectors.Civic technology (CivicTech) (C2G) innovations that providean easy-to-use mechanism for public participation andfeedback,Data driven solutions that improve service delivery,transparency and foster research and business innovation.

Private sector platforms that leverage digital publicplatforms: Digital public platforms provide a foundationallayer to the private sector innovations (e.g. improvedidentification)

Analog Complements: Legal and regulatory frameworks, Leadership, Coordination & Governance, Skills and capacity, Change Management, Procurement of Tech

Digital Economy: from e-government to digital platforms

• Whole-of-government VS ministries as silos

• Tech and analog complements VS Tech only

• Citizen centered services VS Government internal systems only

• Digital by default, without requiring physical presence

Most recently, especially in the wake of healthpandemic like COVID 19, more and more countriesare looking for ways to provide services andcontinue operations remotely, without the needfor physical presence.

Source: World Bank GovTech

Cashless transactionsPaperless transactions Data empowerment

India Stack Data Protection and Empowerment Architecture enables consent-based sharing

of financial data

In Estonia, 99% of government services are available online,

saving the average resident 5 days a year

Thailand PromptPay, using the national ID number, increased e-payments by 83% in 2018

▪

Platform approach:Digital ID:Interoperability: Allowing secure data exchange across government to facilitate service delivery Government back-office system: Efficient government functions

Identity is the foundation toward the implementation of government platforms and service delivery to citizens

HealthcareRecords and billing: Providing

continuity of care and efficient admin

Planning: Managing resources efficiently

Social protectionTargeting: Identifying who needs help, reducing fraud

Delivery: Ensuring the right people receive the help

Financial servicesAccess: Meeting KYC

requirements

Deepening: Building a credit history

In India, account ownership jumped from 35% in 2011 to

80% in 2017 after the introduction of Aadhaar

Thailand reached 98% heath insurance coverage in 3 yrsusing the national ID to find

who was not already covered

Pakistan saved ~US$248mfollowing the 2010 floods by cross-referencing databases

using the UIN

Holti Banka & Siegfried Zottel

Pillar3. Digital Financial Services (DFS)

Pillar3. Digital Financial Services

Digital financial services (DFS) cover financial products and services, including payments, transfers, savings, credit, insurance, securities, financial planning, and account statements. DFS are delivered via digital/electronic technology, including through a payment card, online, or via a mobile phone. DFS are typically linked to transaction accounts (bank or e-money). DFS can provide individuals and households with convenient and affordable channels through which to make and receive payments (including through government and private sector digital platforms), as well as to save and borrow.

~ G-20 High-Level Principles for Digital Financial Inclusion

DFS- Indicators

Gauging the state of play of digital financial services

• The task team should assess a core set of indicators to initially determine the baseline state of digital financial services, and, in particular,digital payments.

• In countries where digital payments are at a nascent stage, the focus of the diagnostic should be on enabling the development of a digitalpayments ecosystem, which often begins with person-to-person payment flows.

• In countries where digital payments are more advanced, the task team should focus on a comprehensive set of digital payments use-cases

(e.g. person-to-business, government-to-person, person-to-government) and leveraging digital technology to develop a broader suite of digitalfinancial services (e.g. leveraging digital data for lending).

Key Indicators

• % of adults with a transaction account

• % of adults making or receiving a digital payment in the past 12 months

• % of adults who used the internet to pay bills or buy something online in the past 12 months

• % of firms with a transaction account

• % of firms accepting digital payments

• # of retail electronic/digital transactions per capita

DFS- Assessment Questions

Market Development //

+ Are new or nontraditional financial service providers (e.g. e-money issuers, mobile network operators, peer-to-peer lending platforms, insurtech) offering digital financial products that areaccessible to a broad range of consumers?+ Is there a fintech industry providing services to traditional or nontraditional financial service providers (e.g. to improve credit scoring, AML/CFT, fraud detection)?

Policy and Regulation: Overall //

+ Does a National Financial Inclusion Strategy (or similar instrument) and / or National Payments System Strategy (or similar instrument) exist to promote and coordinate efforts to create anecosystem for digital financial services?+ Is there a clear delineation of responsibilities among regulators for the legal and regulatory framework relevant to digital financial services?

Policy and Regulation: Market Entry //

+ Is there a legal/regulatory framework in place for e-money issuance, including by nonbanks (e.g. mobile network operators)?

Policy and Regulation: Delivery Channel & Product Innovation //

+ Are various payment points of service interoperable? + Is there a legal/regulatory framework to allow FSPs to contract with agents (e.g. retailers) as third-party delivery channels? + Have the authorities applied a risk-based approach to AML/CFT regulations, including allowing the use of simplified Customer Due Diligence for certain types of products (e.g. small-value transactional products) or customers (e.g. low-income)?

Policy and Regulation: Managing Risks //

+ Is cybersecurity considered a top priority for financial sector authorities and providers? + What requirements are in place to protect customer e-money funds? + To what degree does the legal/regulatory framework for financial consumer protection cover providers offering digital financial services, delivery channels, and products?

Depending on the state of play of DFS development, the task team mayuse the following areas of assessment to determine key hurdles tofurther development of DFS in a country. The task team should draw ona range of relevant data sources and technical guidance in this area

2017 World Bank Group (WBG) Global Findex2017 International Monetary Fund (IMF) Financial Access Survey2016 CPMI-WBG Payment Aspects of Financial Inclusion2016 G-20 High-Level Principles for Digital Financial Inclusion2016 Guidance Note on Covering Financial Inclusion in FSAPs2017 WBG Global Financial Inclusion and Consumer Protection Survey2017 WBG Good Practices for Financial Consumer ProtectionAssessing Hurdles to Developing DFS Sample Questions

Digital financial services - Key challenges to achieve the 2030 objectives

33

Lack of appropriate national financial inclusion strategies

Lack of robust demand- and supply-side payments and financial inclusion data infrastructure. Lack of technical assistance and investment for a sound, interoperable, accessible and efficient payment system infrastructure that are accommodative to digital payment solutions, including opportunities to capitalize on regional solutions such as Africa Wide Payment Platforms. Lack of technical assistance and investment for improved credit information and secured transaction infrastructures that can leverage digitized KYC schemes and digital data.

Legal and regulatory frameworks to be improved to be risk-based, proportionate, protect consumer rights and interests while enable innovation and new market player participation.The lack of legal and regulatory frameworks supporting creditor rights in the case of insolvency and bankruptcy.

Regulator, supervisor, and overseer capacity gaps in context of increasingly digitized financial markets

Lack of appropriate data/payment infrastructure

Inappropriate legal and regulatory frameworks

Capacity gaps

Lack of credit history Lack of accurate, reliable, up-to-date, relevant and complete credit histories of borrowers – both retail and MSMEs

Lack of national financial inclusion strategies that explicitly consider application of digital solutions.

Inability to use moveable assets The inability to use moveable assets as collateral and strong secured transactions regimes

Digital financial services - Proposed intervention strategies

34

Component Country-Level Regional

Strategy and Data

• Develop national financial inclusion strategies (or similar instruments) emphasizing digital approaches

• Strengthen demand- and supply-side financial inclusion data infrastructure to inform evidence-based policy

• Digitize government payments• Develop e-commerce

• Develop a cooperative framework for sub-regional groupings • Establish cross-Africa team drawn from central bank payment systems

regional groupings in the context of the AACB• Partnerships will be explored with digital training platforms

Legal and Regulatory Oversight

• Develop risk-based legal model to enable market entry of fintechs• Build capacity of supervisory regulators• Reforms to facilitate acceptance of digital transactions• Digitize government payments• National payments-systems laws

• Conduct comprehensive review of sub-regional legal frameworks• Identify gaps based on existing/ ongoing legal harmonization efforts• Establish inclusive working groups on standards regulations • Reforms to reduce cost of cross-border payments

Financial Infrastructure

• Establish critical payment system infrastructure and ensure interoperability

• Improve credit info infrastructure• Enable digital identity creation • Establish collateral registries• Provide access to alternative data• Create and expand agent networks

• Digitization and cross-border mobility of consumer credit histories• Alignment of priorities within the existing sub-regional groupings• Establish an Africa-wide forum for Bankers Associations, private sector

players• Ensure cross-border interoperability

Financial Consumer Protection and Capability

• Develop rules to facilitate effective disclosure and transparency for DFS

• Enforce fair treatment and responsible lending to prevent over-indebtedness

• Establish dispute resolution mechanisms • Deploy evidence-based financial capability interventions• Promote asset-based lending

Juni Tingting Zhu & Sara Nyman

Pillar4. Digital Businesses

Digital businesses (i.e. digital solution providers) can be divided into two distinct categories, each with their characteris tics: 1) digital start-ups, and 2) established digital businesses. They serve as a critical foundation to enable traditional offline businesses (both large and MSMEs) to adopt new digital business models and digital technologies, creating positive spillover effects in the rest of the economy.

Application of digital solutions in traditional

industries to solve market bottlenecks and enhance

competitiveness and inclusion

Digital Business Model

Digital start-ups (i.e. early-stage digital firms)

Established digital businesses (e.g. established platform or data-driven firms that have achieved economies of scale and scope)

Digital Economy Traditional Economy

Pillar4. Digital Businesses

Digitally-enabled traditional businesses

• Entrepreneurship ecosystem building

• Early-stage financing, including govt co-funded VCs

• Regulations that level the playing field for all, including regulations to promote contestability, trust and innovation to allow for scaling

•

Typical Interventions:

• Value chain digitalization assessment and policies

• Grants or other financial incentives for digital technology adoption

Core Set of Indicators

Diagnostics and Sample Questions (I): Digital Business Database: 31K digital firms in SSA+MENA

Data sources: Briterbridges, CB Insights, PitchbookContact Juni Tingting Zhu for accessing this database (now at soft-launch phase)

Diagnostics and Sample Questions (II): DB QuestionnaireModule A: Country Digital Business Landscape (see dashboard)Module B: Institutional Mapping of Digital Economy Policies and Programs

B.1 Agencies supporting digital businessB.2 Participation of digital business in policy development/implementationB.3 Government agencies to regulate functioning of the digital economy

Module C: Regulatory Environment (harmonized to MENATech and WDR21 initiatives)C. 1 Regulation enabling e-transactions C.2 Personal data protection and digital privacyC.3. Cross-border data transfers and harmonizationC.4. Cybersecurity and cybercrime law adoptionC.5 Consumer ProtectionC.6. Regulations and taxation harmonization of digital business C.7 Regulations on suppliers to digital platformsC.8 Regulations for shared accommodation platformsC.9 Regulations on ride sharing platforms/transport network company (TNC) C.10 Regulations on gig economy platforms (service provision platforms)C.12 Open Data Policies

Module D: Intermediary Organizations – E.g. incubators, accelerators, research institutesD.1 Characteristics of the intermediary organizationD.2 Services provided by the Intermediary OrganizationD.3 Gaps in services provided by intermediary organizations

Module E: New Digital Business Models (asking owners)E.1 Business ModelE.2 Social gains from the business modelE.3 Sources of revenueE.4 Regulations facing the businessE.5 Digital Platforms (for businesses which operate a digital platform only, otherwise go to E.6)E.6 Sources of funding and supportE.7 Gaps in supporting services E.8 Business use of dataE.9 Business relationship with network/telecomE.10 Business financial performanceE.11 Background business information

Module F: Suppliers and contractors active on commercial digital platforms (asking suppliers)F.1. Type and size of businessF.2 Suppliers to E-commerce digital platforms (physical goods)F.3 Service suppliers (services)

Understand the digital business landscape in each country

Understand the key policy/regulatory bottlenecks to the development of digital businesses in each country

Understand the role and key bottlenecks faced by intermediary organizations that service digital businesses

Focus on platform firms and/or data-driven firms (platform firms are

matchers of suppliers to consumers): Understand the key bottlenecks they face and the policy and investment interventions that can be proposed

Key challenges to achieve the 2030 objectives

Tough business and regulatory environment

Most African countries are small, low income/lower middle-income economies with limited domestic demand. Regional markets can offer better opportunities but initiatives to connect digital entrepreneurs are lacking. Although internet/mobile phone penetration are increasing, the share of active users in SSA is lower than in other regions.

Over 170 intermediaries (incubators, accelerators, tech hubs) operate in the region but distribution is uneven across countries; quality of services varies and sources of funding often not sustainable. Tech hubs are generally not connected with each other and with international networks. Lack of human capital with digital/AI/Big data/coding skills.

Access to finance is a major problem for African entrepreneurs in all sectors. Only 22% of firms havea line of credit in SSA - the lowest share of all regions (ES surveys). Digital entrepreneurs faceadditional challenges due to lack of collateral. Countries in SSA receive the lowest level of VC fundingglobally at just 0.06% of GDP (compared to 0.32% in China)

Only 9% of tech start-ups have female founders (UN. 2018. Africa Renewal).

Smaller market size and digital customer base

Weak entrepreneurship ecosystem

Limited access to finance

Lack of R&D and incentives for adoption of digital business models

R&D programs/centers exist only in a handful of large economies. Lack of instruments to incentivize adoption of new digital business models, especially among traditional businesses/SMEs. Lack of access to ancillary infrastructure (e.g. logistics for e-Commerce)

Digital businesses in SSA face a tougher business environment than their counterparts in other regions. E.g. Lack of regulations that enable e-commerce transactions, data and consumer protection, antitrust 2.0, and restrictive sector-specific regulations

Lack of access to foundational database and data infrastructure

Lack of data center infrastructure that have both storage and computing capabilities. No open government data repositories that can be leveraged for start-ups to develop new solutions

Digital gender divide

Typical Interventions 1. Digital business landscape diagnostics and identify new market opportunities

Digital business scan: how many, which sector, what type (e.g. B2B, B2C, C2C), industries where there is more potential for p latforms to disrupt business models, presence of local and international platforms, potential for job creation

Analysis of market structure, value chain segmentation, and contestability in platform-based and data-driven businesses; technology upgrade potential in digitally-enabled traditional businesses

2. Interventions aimed to support the entrepreneurship ecosystem

Support VC ecosystem with mentorship programs, and improve early stage VC funding gap, including working with leading private sector partners via PPP or MDF models

Develop pan-Africa regional networks and establish regional centers of excellence (regional hub, investor network, pooled risk capital)

Consider competitively awarded performance contracts to tech hubs (based on self-improvement plans) that worked well in different country contexts

3. Supporting regulatory reform for the growth of new digital business models

Digital business regulation to promote trust and innovation: e-transactions, cybersecurity, quality standards assurance, IP protection, consumer and supplier protections, e-customs

Contestable market regulations: competition policy, anti-trust 2.0, market entry and operation, multi-homing, steering

Data policies to promote trust and contestability: privacy, storage, access, use, and sharing

Regional regulatory policies for digital single market integration

4. Interventions to drive the development and adoption of digital business models and digital solutions

Developing national strategies or policies to enable SMEs to adopt digital business models or new digital solutions (e.g. in National SME Digital Transformation Strategy)

Training of business owners and independent suppliers/contractors (e.g. coding, marketing, financial management, inventory management)

Capital to firms for digital solution or digital business model adoption and expansion (e.g. matching grants, line of credit, venture capital)

Linkage programs to support businesses to connect to digital platforms, or potential users and service providers (e.g. extension services and marketing information)Integration of private-sector driven digital solutions in WBG operations in different sectors (e.g. health, agriculture, government) to increase efficiency and market opportunities

5. Institutional Capacity Building

Intergovernmental steering committee to promote digital business and economy (e.g. design and set-up inter-ministerial digital economy committee)

Set up risk mitigation plan and mechanism to address red flags and discriminative behaviors due to anti-competitive behaviors of new digital business models

Building government capacity to design, implement, monitor and evaluate digital entrepreneurship ecosystem programs; development of women in tech entrepreneurship programs, addressing legal barriers to female entrepreneurship; supporting regional knowledge exchange programs for policy ma kers

Sajitha Bashir & Koji Miyamoto

Pillar5. Digital Skills

• Main changes from last assessment tool

1. Strengthened the digital skills framework that DigComp 2.1 and E-Competence

framework (standardized across pillars)2. Provide key questions on policies, practices and

interventions that the country diagnostics could shed light on

3. Presents a more comprehensive list of indicators designed to capture demand, supply, interventions and policies around digital skills

4. Foreshadows some of the typical/potential hurdles that countries may need to address in terms of policy contexts, connectivity, programs, private sector engagement, and data availability

• Structure of the revised assessment tool

1. Definitions of Digital Skills• Importance of digital skills• Digital skills frameworks

2. Determining the current state• The policy framework for digital skills• Assessing the demand and supply of digital skills• Rapid skilling programs by the private sector and NGO

initiatives

3. Assessing hurdles• Adequacy of digital skills development and constraints in

fostering digital skills• Policy contexts• Digital connectivity and digital skills programs• Foundational skills• Private sector engagement• Information• Implications for policies and programs

Pillar5. Digital Skills

Employers across Africa note skill gaps as a major constraint to their ability to compete in the global digital economy. A shortage of technical talent impedes productivity and innovation in African businesses.

Technological adoption and innovation depend on tech-savvy skills to help drive innovation.

Enrollment in education has increased in Africa, but basic numeracy and literacy indicators remain low.

Digital skills

Digitally competent workforce

Skills for ICT professions

(eg EU e-Competence Framework)

Skills for a broad range of occupations

(EU Digcomp 2.1/UNESCO GDLF)

Digitally literate citizens

Skills to leverage digital technologies and services in everyday lives

(EU Digcomp 2.1/UNESCO GDLF)

Skills to facilitate learning, civic engagement, health outcomes

(EU Digcomp 2.1/UNESCO GDLF)

Framing and Characterizing Digital Skills (standardized across pillars)

Pillar5. Digital Skills

DE4A Framework of Digital Skills for All Occupations/ Digital Literacy : Domains and Proficiency Levels

Digital skills

The ability to access, manage, understand,

integrate, communicate, evaluate and create

information safely and appropriately through digital technologies for

employment, decent jobs and entrepreneurship.

1. Devices and software operations

2. Information

and data literacy

3. Communicati

on and collaboration

4. Digital content creation

5. Safety

6. Problem solving

7. Career-related

competencies

Based on UNESCO’s DLGF and EU’s Dig Comp 2.1: Source: Carretero, et.al. (2017) and UIS (2018)

Basic

With guidance, deal with simple tasks that involve remembering contents and instructions

Intermediate

Independentlydeal with well-defined routine and nonroutine problems that involve understanding contents

Advanced

Independentlydeal with and provide guidance to others on different tasks and problems that involve applying and evaluating content in complex situations

Highly specialize

d

Independentlyresolve complex problems with moving pieces, guide others, contribute to professional practices and propose new ideas to the field

DE4A Framework of Digital Skills for ICT Professions : Domains and Proficiency Levels

Based on EU E-competence Framework: Source: EU European Committee for standardization (2019)

1. Plan(e.g., application design)

2. Build(e.g., application

development)

(e.g., problem management)3. Run

(e.g., sales management)4. Enable

5. Manage(e.g., ICT quality management)

Competencies required and deployed by ICT professionals (both

practitioners and managers).

Level 2

Level 3

Level 4

Level 1

Level 5

Independent

Creativity, application

Leadership

Works under guidance

Strategic thinking

5 Levels of proficiency

5 Domainsof competence

Towards having a holistic picture of digital skills development of the population

• Ideally, the DE4A assessment should capture the levels and distributions of digital skills of the population (for different purposes, by domain and proficiency level)

• But in Africa, there are only very few measures of digital skills available, if any, so we use proxy indicators drawn from education and training

• The main ways of imparting digital skills are through:

1. formal education and training system new entrants into labor force

2. non-formal programs - usually run by NGOs

3. On-the-job learning or firm-based training very difficult to obtain information

• Hence, we use indicators such as the types of programs that are available, the basic pre-conditions for teaching digital skills etc, as well as qualitative information

DS Assessment Questions

Are there any institutions, policies, frameworks or working groups in place by government ministries, private stakeholders, donor agencies, or others, focusing on the development of adigital skills agenda or program for nationwide disbursement?

How much funding, both public and private, is directed towards programs that seek to improvedigital skills acquisition (for all ages, including non-formal programs)?

Are there resources widely available for acquisition of digital skills and if so, what do these mass resources look like, and where are they used most likely? (For example, online learningprograms)

What are the most common software programs (including social media and chat tools such as Google, Facebook, WhatsApp) that are reportedly used? (Will have to gather informationfrom companies themselves, and these could serve as a proxy for how many people have the skills to use these platforms).

At the schooling level, are there formal/official documents that provide guidance on integration/teaching of digital literacy at different levels of education, or student learning objectivesgeared towards the acquisition of these skills?

Are there private- and public-sector led rapid-skills training programs on digital skills, such as coding bootcamps or other similar experiential-basis learning models? How many studentsdo they graduate every year and how many domestic companies recruit from them?

Are there university-industry learning platforms providing real-work digital skills learning experiences for university students? How many private sector initiatives provide apprenticesprograms for digital skills jobs?

What are the leasing micro-work and free-lancing platforms for online job opportunities in the country? Are there any domestic platform operating in the country? Are there any onlinemarketplacefor tasks/jobs operating in the country? What is there annual domestic users base?

As digital skills are often acquired and practiced in non-formal settings, and through private investment, many of these questions below will be essential tounderstanding the level of digital literacy of the country, as well as understand the speed of which digital skills acquisition is taking place in the country, and what itis motivated by.

The suggestion is not only to draw on the several sources of information already mentioned (through household surveys, Africa Data Indicators, etc.), but ratherthrough focus groups with leaders both in the ICT industry as well as government officials.

Assessing Hurdles to DS Development

Indicators: Digital Skills Current Status Previous StatusTrend & Benchmark

Year Value Year Value

Supply of digital skills

Computer availability & internet access:#/% of schools with computers and internet access

Access to digital skills curricular/programs#/% of students and youths enrolled or completed digital skills programs

Attainment of digital skills#/% of youths and adults with digital skills

Demand for digital skills

Available jobs that require digital skills

Occupations (that require digital skills) and # of jobs with potential to expand in the next 5 years

Shortages of digital skills

Perception of digital skills shortages #/% of employers stating digital literacy as hindrance for job performance

Capacity to foster digital skills

Availability of teachers with digital skills%/# of teachers and instructors trained using ICT for pedagogical purporses

DS- Indicators

Gauging the state of playof digital skills: A taskteam carrying out thediagnostic for digitaleconomy may examine thefollowing areas todetermine the demand,supply and capacity tofoster digital skills.

Anne Senges

Communications Strategy

COUNTRY DIAGNOSTICS:

A TOOL FOR IMPACT

STAKEHOLDER ENGAGEMENT

DISSEMINATION STRATEGIES

KNOWLEDGE MANAGEMENT

Getting the Word Out

Stakeholder engagement

Conduct a comprehensive stakeholder mapping that identifies key influencers, agents of change within the government and among key actors of the digital economy

Engage with key stakeholders throughout the process to shape the

Anticipate criticism & manage

Objective: Get buy in from client countries & agents of change

Communicating for impact

Best practice: Nigeria

Communication plan will depend on country context

Measuring impact: Ownership of report findings & recommendations by gov + key stakeholders

Knowledge Management

Branding

Communications team

Teams involved may include:

Communications Officer in Country OfficeComms Lead for Digital Development (Anne Senges)Comms Lead for Governance (Lara Slade)Comms Lead for FCI (Elizabeth Price)Comms Lead for Education (Kristyn Schrader-King)Comms Lead, Digital, IFC (Kelly Anderson)Christelle Chapoy (West Africa), Kofi Tsikata (East Africa)Nate Rawlings Comms lead MENA for North Africa

▪ Once finalized and ready for public dissemination, DE4A country diagnostics should be transmitted by ADM TTL to DE4Amoonshot_PMs DE4Amoonshot_PMs@worldbankgroup.orgcc the task team and the CMU

▪ Publicly available Digital Economy country diagnostics can be accessed at: https://www.worldbank.org/en/topic/digitaldevelopment/brief/digital-economy-country-diagnostics-for-africa

▪ Non-disclosable reports are available at shared drive: Ask for an access to Lucine Munkyung Park (mpark3@worldbank.org)

Complementary Guidance Documents

▪ DE4A Diagnostic Tool V2

▪ DE4A Diagnostic Report Template and Dissemination Guidance V2

▪ DE4A Scorecard (key indicators)

▪ DE4A Communications Strategy (branding, stakeholder engagement, etc.)

Q&A

Country implementation road map – menu of options Digital Infrastructure

Increased access, quality, and

affordability of digital connectivity

INV

ISIB

LE M

ILE

• Lack of affordable, high-speed broadband Internet

• Unreliable networks due to lack of market competition, network expansion, and public-private partnerships

• High cost of leasing fiber, making network expansion impractical

• Lack of affordable handsets (smart phones) for the unconnected population

• Lack of tier ¾ carrier-neutral data centers

Key Challenges

FIRST MILE

• Reform to promote a competitive environment and pro-investment policies on international gateway

• Deploy regional and international connectivity, e.g., submarine cable landing stations

Increased access, quality, and

affordability of digital connectivity

MIDDLE MILE

• Deploy national connectivity (terrestrial/fiber backbone infrastructure deployment connecting submarine cable landing stations, main cities, neighboring countries, etc.)

• Deploy broadband infrastructure through shared infrastructure and alternative networks (e.g., energy smart grids)

LAST MILE

• Deploy IT connectivity networks (LAN/WAN) among government agencies and public institutions (e.g., schools, hospitals, rural communities)

• Support National Research and Education Networks

Increased coverage of terrestrial/fiber backbone

Increased availability of last mile connectivity (fixed and

mobile) for end-users, including public agencies and research/education centers

• ICT Strategy, Digital Development Strategy

• ICT policies, legislations, regulations that promote competition and entry, public-private partnership, sharing of essential facilities; ensure cybersecurity

• Regional integration (regional hub)

Increased international connectivity

International bandwidth established

Internet Exchange Points (IXPs) established

Increased availability of data centers

Faster growth

More jobs

Better services

Interventions Outcomes High-level Goals

Increased competition Enabling Environment

• National ICT strategy, digital development strategy

• Independent and effective regulatory authority

• Legal and regulatory framework that promotes market entry and competition (SMP regulation), sharing of essential facilities; and ensure cybersecurity

• Access to passive infrastructure/rights-of-way

• Spectrum and tax policies

• Regional harmonization of regulations

Increased coverage of terrestrial/fiber backbone

Supply Side:

• Lack of network coverage due to lack of market competition, expensive network build-out & maintenance costs in remote areas

• Spectrum shortage

• Lack of IXPs, data cent

International bandwidth capacity increased

Increased digital literacy and skills

Reduction in retail mobilebroadband internet prices

Broadband infrastructure deployed in financially non-viable

areas

Increased market competition

Efficient spectrum allocation and

utilization

Efficient use of existing infrastructure

Efficient usage of USF resources to serve uncovered and

unconnected

Public ICT access facilities

IP transit price dropped

Increased demand for broadband services

IXP and carrier neutral data centers established

Increased mobile broadband network

coverage

Digital skills training for government officials &

underserved population

Increased access to basic digital skills

Str

ate

gy

Increased access and usage of

financial services, leveraging digital

technologies

Demand Side:

• Low access to transaction accounts

• Low usage of digitalfinancial services

• Gender disparity

• Lack of financial literacy

• Lack of trust in financial institutions

• Lack of access to finance by MSMEs

• High transaction costs

Supply Side:

• De-risking by global banks threaten to inhibit critical financial flows into smaller and poorer markets

• Lack of suitable, proportionate regulations

• Inadequate or lack of core national and sub-regional payment systems and interoperability

• Inadequate access points and channels

• Information asymmetries

Interventions OutcomesKey Challenges High-level Goals

Increased tax collections

Faster growth

More jobs

Better services

National Financial Inclusion Strategy

Increased cost savings for public and private sector

stakeholders

Regional/sub-regional cooperation frameworks

En

ab

lin

g E

nvir

on

me

nt

Harmonizing legal and regulatory framework for DFS and innovations at

national and sub-regional level

Fin

an

cia

l In

fra

str

uctu

re

Establish an Africa-wide Payments Processing Platform

Increased income generation opportunities

Increased market entry, delivery

channels and product innovation

(supply)Reduced informal/shadow

economy

Establish RTGS, ACH, switch, and upgrade APIs, QR code features

Increased consumer protection

Increased trust infinancial institutionsRisk-based approach to AML/CFT

cybersecurity regulations

Policy to digitize government payments

Financial consumer protection and financial education

National and sub-regional interoperability

Establish credit registry/bureaus, collateral registry

Improved efficiency offinancial infrastructure

Reduced information asymmetries

Increased awareness and demand for financial services

Cross-border links established

Demand Side:

• Lack of affordable broadband services

• Lack of affordable internet-enabled devices

• Limited consumer readiness

• Lack of content availability

Key Challenges Interventions Outcomes High-level Goals

60

Country implementation road map – menu of options Digital Public Platforms

61

An

alo

g C

om

ple

me

nts Increased digitalization

of public operations and services (G2C, G2B, G2G)

with digital platforms operated on a whole-of-

government level addressing each of

businesses and citizens life events

• About 45% of the African population lack legal proof of identity, impending access to services and benefits requiring identity authentication

• Unequal access to and quality of services for citizens (G2C, G2P) and businesses (G2B)

• Absence or weak legal and regulatory frameworks for digital economy (data sharing, e-signature, e-transactions, e-payments, data protection, security)

• Low-income consumers and small businesses have limited access to access tofinancial services; business services; and formal/global value chains and innovations

Interventions OutcomesKey Challenges High-level Goals

Increased productivity

Better consumption of public services (education, health, infrastructure, etc.)

Faster growth

More jobs

Better services

Enabling legal and regulatory environment for transactional

online services

Increased tax revenue and transfer system

Eased market entry for new and innovative firms

Increased entrepreneurship

Leadership and coordination of digital governance

Skills and human capital

Decreased transaction and liability costs and

improved ease of doing business for private

sector

Fou

nd

atio

nal

Ele

me

nts

Digital identification/ authentication and trust services

Applications for core government functions, services,

and CivicTech

Increased transparency, accountability, and trust in

the governmentIncreased

competition, public-private partnerships, private investments,

and innovationIncreased citizen

participation

Increased capacity for public servants,

workers, entrepreneurs to seize opportunities in digital

world

Expanded trade

Cost reduction

Interoperability layers and shared services (government

infrastructures, shared registers, etc.)

Backend systems

Secured digital transactions

Data exchange acrosscommon resources

Country implementation road map – menu of options Digital Financial Services

62

Stra

tegy

Increased access and usage of

financial services, leveraging digital

technologies

Demand Side:

• Low access to transaction accounts

• Low usage of digitalfinancial services

• Gender disparity

• Lack of financial literacy

• Lack of trust in financial institutions

• Lack of access to finance by MSMEs

• High transaction costs

Supply Side:

• De-risking by global banks threaten to inhibit critical financial flows into smaller and poorer markets

• Lack of suitable, proportionate regulations

• Inadequate or lack of core national and sub-regional payment systems and interoperability

• Inadequate access points and channels

• Information asymmetries

Interventions OutcomesKey Challenges High-level Goals

Increased tax collections

Faster growth

More jobs

Better services

National Financial Inclusion Strategy

Increased cost savings for public and private sector

stakeholders

Regional/sub-regional cooperation frameworks

En

ab

lin

g E

nvi

ron

me

nt

Harmonizing legal and regulatory framework for DFS and innovations at

national and sub-regional level

Fin

an

cia

l In

fra

stru

ctu

re

Establish an Africa-wide Payments Processing Platform

Increased income generation opportunities

Increased market entry, delivery

channels and product innovation

(supply)Reduced informal/shadow

economy

Establish RTGS, ACH, switch, and upgrade APIs, QR code features

Increased consumer protection

Increased trust infinancial institutionsRisk-based approach to AML/CFT

cybersecurity regulations

Policy to digitize government payments

Financial consumer protection and financial education

National and sub-regional interoperability

Establish credit registry/bureaus, collateral registry

Improved efficiency offinancial infrastructure

Reduced information asymmetries

Increased awareness and demand for financial services

Key Challenges

Increased number of digital

businesses

Increased availability and usage of private digital platforms and data-driven solutions (B2C,

B2B, B2B2C, etc.) across sectors of

the economy

Increased productivity

through entry of more productive

firms and technological

upgrade

Increased integration into

global value chains

Increased sales, earnings

Enabling Environment:

Create an enabling legal and regulatory environment to facilitate the creation and

use of digital solutions or new digital business models

Access to Funding:

Support the design, creation, and expansion of financial instruments for

digital start-ups

Access to Markets:

Implement supplier/seller programs that facilitate the access to domestic and

external markets through adopting digital technologies or new digital business

models

Low managerial and technological capabilities of firms and entrepreneurs

Fragmented markets with high search costs and contract frictions obstruct buyer-seller relationships

Limited access to finance for digital businesses

Increased competitiveness

Lack of an enabling legal/regulatory environment for digital entrepreneurship and for new digital business models to proliferate

Access to Mentorship and Support:

Capacity building for organizations that support entrepreneurship and technology

adoption (e.g., incubators, accelerators, technology extension programs,

management capability programs)

Improved business environment for digital businesses

Increased access to funding for digital businesses

Increased access to markets using digital technologies or new digital business models

Digital divides persist between men and women: low presence of women digital entrepreneurs

Women Empowerment:

Women-specific capacity building for digital entrepreneurship

Improved level of firm managerial and technological capabilities for

women entrepreneurs

Interventions Outcomes High-level Goals

Faster growth

More jobs

Better services

Improved level of firm managerial and technological capabilities for

digital entrepreneurs

Country implementation road map – menu of options Digital Businesses

63

Country implementation road map – menu of options Digital Skills

64

Po

licy

an

dR

eg

ula

tory

Fra

me

wo

rk

• Africa has fastest growing labor force yet the lowest level of human capital

• Lack of coherent policy frameworks

• Lack of digital infrastructure and affordable connectivity in educational institutions: only 25% of schools in SSA have access to Internet (SDGs 2019 Report)

• Limited number of relevant digital skills programs that cater to different levels of digital learning needs

• Shortage of ICT-trained teachers

• Low digital access and usage

• Limited digital content especially in local languages

Key Challenges

• Establish stable, fast and affordable internet connectivity and install equipment and devices for pedagogical purposes, at all educational levels, covering all population groups

• Establish/strengthen National Research and Education Networks (NRENs) to expand high-speed broadband across higher education institutions and links to international networks

• Develop a Digital Skills Action Plan with goals, strategies, costs and monitoring indicators

• Develop policies for inclusive access, digital content, data management and privacy and security, efficient procurement and technical standards

• Prepare digital skills frameworks and curricula that can be internationally benchmarked, l inked to employer demand and are relevant in local contexts to be used by education/training providers and employers

• Prepare and conduct regular digital skills assessments of the population to inform policies

• Create regulatory environment for development of private market for training and public-private partnerships

✓ Increased access to basic digital skills training

✓ Increased access to

intermediate digital skills training

✓ Increased access to advanced digital skills training

✓ Increased access to basic digital skills training for out-of school youth and informal sectors

Dig

ita

l Sk

ills

Pro

gra

ms

• Introduce/revise digital skills programs at various levels that are anchored to the digital skills framework and curricula, and meet the labor demand

• Foster a digital market place where multiple providers can offer digital skills training

• Prepare standardized digital skills assessments l inked to the skil ls frameworks that can be used by multiple education and training providers

• Ensure all teachers and instructors of training programs are well trained in both the ICT usage as well as pedagogical knowledge and practices

Interventions Outcomes High-level Goals

Faster growth

More jobs

Better servicesIncreased

capacity for citizens,

businesses, and

governments to seize

opportunities in digital

world

Dig

ita

l in

fra

stru

ctu

re