Digitalization as a catalyst for sustainable growth in Ghana

By Fadi PHARAON

Mobile communications have had a significant impact across society in Ghana, leading to digital inclusion and, as a pioneering country in mobile financial services, also driving financial inclusion. This blog explores the path towards digitalization and how digitalization is a catalyst for sustainable growth.

Accelerated digital transformation driving societal development

In recent years, digitalization has happened at unprecedented speed, globally as well as in Ghana.  The COVID-19 pandemic made remote collaboration and communication the norm. Remote or hybrid work and virtual events have expanded the possibilities of operation, and to some extent changed the way we live our lives, for instance by reversing the rural-urban migration trend in many countries.

Studies have shown that mobile technology has played a crucial role as a catalyst for innovation and socio-economic development. There is a clear link between mobile broadband penetration and GDP growth, with lower-income countries having the potential to leapfrog in economic development by investing in mobile broadband infrastructure.

Small and Medium Enterprises (SMEs), often referred to as the engine of growth, is also helping drive economic and sustainable development. By embracing digital technologies, SMEs have become more agile and profitable, creating jobs in a country where SMEs make up over 90percent of all businesses and contribute over 70percent of the GDP.

Furthermore, technology also has the potential to play a crucial role in preventing further climate change by enabling other industrial sectors to move towards a low-carbon economy. According to Ericsson research, Information and Communication Technology (ICT) solutions can enable a reduction of global greenhouse gas emissions by up to 15 percent by 2030, while being responsible for only 1.4 percent of the global carbon footprint.

In Ghana, mobile connectivity and access to mobile broadband are experiencing strong growth, but there is still a large part of the population using 2G and 3G technologies. Growing 4G and smartphone adoption is crucial for driving digitalization, and giving access to advanced digital services and applications. With 5G on the horizon, the eventual establishment of these next-generation networks offers opportunities to deliver higher throughput at a lower cost and energy consumption.

One of the most important enablers to accelerate 4G adoption is smartphone affordability. By having the right strategies to make 4G devices more affordable, combined with the right digital services, mobile broadband uptake will accelerate.

Mobile Financial Services: Empowering Financial Inclusion

Ghana is a pioneer in mobile financial services. Initially targeted at providing banking services, from money transfer to micro-lending for the unbanked, mobile telecom operators have become the largest channel for financial services and the services offered are growing in sophistication. Mobile money generates financial resilience and facilitates higher savings for households.

As Mobile money electronically records all transactions, improving the security of payments, it facilitates transparency and fosters the formalization of the economy. With over 18 million active mobile money accounts, Ghana has seen a remarkable reduction in the proportion of unbanked population from 60 percent in 2014 to 32 percent in 2021, as reported by the World Bank Findex.

According to the Bank of Ghana (BoG), the total value of mobile money transactions in the first three months of 2023 hit GH¢411.5 billion, which is an increase of almost 69.1percent year-on-year. This demonstrates the strength that mobile money has in the country and the region. Contrary to expectations, the transactions continue to increase after implementation of the e-levy. Ericsson Wallet Platform is enabling the leading mobile money service in Ghana, driving financial inclusion and well-being.

Ghana’s Tech Hub Potential

With a young and vibrant population and a supportive government, Ghana has the potential to become a technology leader in the coming years. Ghana’s universities have great technology-oriented programs, equipping students with the skills needed for careers in technology. At Ericsson we are supporting this development through the graduate program that we launched in 2021, providing world-class learning and career development opportunities for tech talents of Ghana.

To fully realize the potential of future generations of the Ghanaian workforce it is crucial to bridge the gender gap in science, technology, engineering, arts, and mathematics (STEAM) related fields of career and education and at Ericsson we are working closely with local schools and universities to sensitize girls and women to the numerous STEAM-related careers that they can pursue. We also continue to work with universities to advance female careers in engineering through mentorship and by giving female engineering students internship and national service opportunities.

Enabling Digitalization

To enable digitalization, three foundational pillars are crucial: robust and reliable network infrastructure, a conducive government and regulatory regime, and the evolution and growth of ecosystems. Scalable and dynamic infrastructure investments ensure the resilience and security of digital systems. Governments can create favourable regulatory environments to encourage private sector investment and provide ample, cost-effective spectrum for innovation. Collaboration among policymakers, regulators, and industry stakeholders is vital in outlining the digitalization roadmap.

Ericsson is actively working with the mobile ecosystem in Ghana to facilitate an environment where digitalization can flourish. A recent example is a workshop that brought together mobile network operators, regulators, the Ministry of Communications and Digitalization, and other industry players, with the aim of promoting best practices in spectrum management to bridge Ghana’s digital divide. With the planned release of 5G spectrum and a strong commitment to secure spectrum neutrality, Ghana is on its way toward future digital growth.

Investing in modern and energy-efficient mobile broadband infrastructure is a catalyst for digital transformation and sustainable growth. As Ghana embraces connectivity and technological advancements, stakeholders from various sectors must collaborate to realize Ghana’s digital potential and the unprecedented opportunities it holds. By empowering individuals, fostering innovation, and creating an enabling environment, Ghana can shape its future as a leading player in the digital era.

>>>the writer is President of Ericsson Middle East and Africa