Ghana’s digitalization revolution, a catalyst for economic development
Globally, countries that have achieved advanced levels of digitization have realized significant benefits in their economies, their societies, and the functioning of their public sectors. One of the critical lessons of the Covid-19 pandemic is the realization of the vital role of digitalization in driving and sustaining long-term economic growth. In fact, a recent OECD report to the G7 on strengthening economic resilience against future crises states that emerging technologies, particularly digitalization, can boost resilience through prevention, absorption, and recovery capabilities.
Digitalization refers to the facilitation of economic processes by leveraging digital technologies and digitized data. Because most economic activities, especially e-commerce, are carried out using digital platforms, economies best prepared for the Covid-19 pandemic shock were those with robust digital infrastructure. As a result, we have seen better economic resilience in developed countries such as Germany, China and the United States compared to developing countries.
While most developing countries are still struggling in reverting their major macroeconomic variables to pre-pandemic shock levels, the story in Ghana has been relatively different and inspiring. The recently published 2021 Article IV of the IMF states that policy interventions in Ghana have been critical to paving the way for a faster rebound of economic activity. Headline Inflation which spiked to double-digit levels due to food price pressures has fallen back to 8.5 percent – since April 2021.
Ghana’s digitalization revolution in the past four years has been rapid and orchestrated by the Vice President of Ghana, H.E. Dr. Mahamudu Bawumia. The cardinal pillars for this digital revolution have been the rolling out of a Ghana Card, Digital Address System, Mobile Money Payments Interoperability System, Ghana. Gov Payments Platform and Universal QR Code. This digitalization initiative sought to use mobile technology to solve pressing challenges in health service delivery, financial inclusion, agriculture sustainability, and creating a robust national identification system. Thus far, the digitalization initiative has helped promote economic resilience and positioned Ghana as the choice destination for international investments.
Ghana implemented a revolutionary Mobile Money Interoperability (MMI) project, making it among the first countries in the world to implement a Universal QR Code payment system that accommodates both bank accounts and mobile wallets. This project has made Ghana the fastest growing mobile money market in Africa, with over 36.9 million registered mobile money accounts. This digitalization project also made it easy for people to renew their national health insurance membership on their phones without spending time in long queues.
The digitization project at the seaport operations has successfully helped minimize the turnaround time for processing cargoes, streamlined inspections, and enhanced enforcement, making it easier to clear goods and curb corruption in port operations. This initiative has made Port of Tema the seaport with the highest throughput per vessel call in West Africa, making it the ideal first port of call and transhipment hub in the region.
Another notable digitization initiative is the implementation of the “GhanaCard Identification Initiative”. The GhanaCard is a unique national identity card issued by the National Identification Authority of Ghana (NIA) to Ghanaian citizens. This
laudable initiative is expected to, according to the recent IMF Country Report No. 19/368, help the Government consolidate its mobile banking project, improve tax revenue collection and improve the ease of doing business in Ghana.
On April 1, 2021, Ghana Card replaced Tax Identification Numbers (TIN) in an effort to widen the tax net and enhance revenue mobilization. In that same vein, the Social Security and National Insurance Trust (SSNIT) on June 28, 2021, commenced the merger of all SSNIT numbers to the Ghana Card. Plans are far advanced to link Ghana Card to SIM Cards, Bank Accounts, Birth and Deaths Registry, Driver and Vehicle Licensing Authority (DVLA) cards. These digitization initiatives will improve the delivery of public services and spur economic development.
In terms of infrastructure, Ghana has provided free Wifi to 722 senior high schools, 46 Colleges of Education, 260 district education offices, and a successful pilot of 13 public universities. This is expected to help shape the digital culture and also provide digital support for the growing upwardly mobile population in the next few years.
In conclusion, Ghana’s digitization revolution has enabled society to be more transparent, increasing public participation and the government’s ability to disseminate information in an accessible manner. More so, digitization has improved productivity and has a measurable effect on economic growth and development.