Latest Digital Evolution Index, developed by MasterCard and The Fletcher School at Tufts University in Massachusetts, reveals that ”South Africa’s digital economy is the most developed in Africa, and one of the fastest growing in the world.” South Africa ranked 33 for digital readiness (defined by the markets’ ability to support and encourage digital COMMERCE and payments), with Egypt ranking as number 48, Kenya at 49, and Nigeria as 50th on the list.
Other Key African Digital Economy Insights:
Egypt’s Innovation score of 29.5 and its Demand and Supply drivers both above 15 helped place it second in the African rankings. According to the INDEX, Egypt has the potential to be one of the top 10 fastest evolving countries globally in the next five years. Mobile payments are in place for an impressive run due to the the first ever interoperable Arabic mobile MONEY implementation in Egypt. While the e-commerce penetration rate among Egyptians is still low at 3.4 percent, Egypt’s online purchases are expected to triple by 2016, according to Euromonitor. Kenya’s Innovation score of 32.9 was its highest driver score followed by its Institution score of 14. This is due to a combination of factors including the country’s mobile payment capabilities, led by the M-Pesa platform, which shows an evolved mobile MARKETwhere 25 percent of Kenya’s GDP travels through M-Pesa. In 2013, Kenya’s mobile penetration rate was 72.5 percent growing by 5.6 percent to 32.3 million subscribers during the second quarter of 2014. Kenya faces challenges with its Supply and Demand drivers, which if focussed on over time will lead to an improved overall INDEX score. Nigeria’sInnovation and Institution drivers fared relatively well largely owing to the Central BANK of Nigeria’s Cashless Policy that is expected to drive growth in electronic payments and e-commerce, the country’s increasingly urban population that will have better access to the INTERNET over the coming years, and the fact that Nigeria has 94 percent mobile penetration. Its Supply and Demand drivers have much potential for improvement, with scores of 6.8 and 7.3 respectively, pointing to a need for improved TECHNOLOGY and infrastructure. However, Nigeria showed the greatest potential for digital growth.