Nigeria, Kenya, and South Africa have been named the three countries out of 115 that provide the best environment for businesses to succeed in the age of digitalization.
In the Enabling Digitalization Index (EDI) 2018 report, Euler Hermes demonstrates each country’s capacity for providing the right environment for businesses to live up to their potential in an economy that is becoming increasingly digitized.
Aspects considered when assessing the ranking include the ability to reduce digital inequalities, bank on smart logistics, use pivot territories and sectors, develop human capital, and develop digital regulation.
South Africa leads the way in the ranking out of the three African representatives, at 46. Kenya is second, at 70, and Nigeria ranks 100 out of the 115 countries.
A digitized economy
Digitization has enabled businesses to work smarter and faster, and make improved overall progress on their goals. It’s also made life easier for startups looking to digitize their business from the outset. Even individuals are making an income from home, while many are sticking with their current positions and earning a second-income from an online business. They’re selling products and services online, such as consumer electronics or SEO services. Others are looking to the financial markets, profiting from such forms of trading as forex and Contracts for Difference (CFD).
Platforms/brokers like IG provide access to literally thousands of markets, where individuals can practise with a demo account. For many who have used a broker, forex is the most profitable form of trading. It allows users to speculate on future prices of major and minor currency pairs without the need to purchase said currencies, which is beneficial because it does away with the currency exchange fees usually involved in buying foreign currency. Let’s look at the strengths and weaknesses of each country and how they achieved their respective rankings.
South Africa and digital technology
SA comes with a sophisticated infrastructure and strong economic development. Throughout the years, numerous businesses in SA have invested billions into digitizing the economy. Its emphasis on such digital technologies as connectivity devices or sensors, and on applications and software like manufacturing execution systems, defines its competitive advantage. In spite of this, the report observed that South Africa’s connectivity quality is still below average.
Kenya and infrastructure
Ranking 70th in the world and the second African country after South Africa proves that Kenya is progressing when it comes to infrastructural development. West Africa’s business leader has an estimated $70 billion economy. Kenya already has solid trade infrastructure, along with a supportive business environment, which partially makes up for political instability in the country. Kenya’s connectivity quality is also below average.
Nigeria and technology consumption
Ranking at 100 on the list, Nigeria sometimes counts as Africa’s first in terms of economic size. It’s also the most populous country in Africa, which means that it has more technology users than any other. The report notes that Nigeria ranked 100 on the list, in spite of an impressive market score.
The report revealed that knowledge ecosystem, trade infrastructure and weak connectivity are the main weaknesses in the content. Africa has managed to attract substantial international direct investment, but it hasn’t really benefitted businesses due to a small population of tech-savvy individuals, along with inadequate infrastructure.