Banking on a turbocharged Digital Future

It may currently be going through difficult macroeconomic headwinds, induced in large part by a confluence of exogenous factors – CoVID-19 Pandemic, Russian invasion of Ukraine, and relentless, excessive financing premiums – but, hidden from the global spotlight, a digital revolution is taking place in one of Africa’s brightest spots, Ghana, that has placed her in pole position for faster recovery, and a resiliency better able to absorb future shocks.

Beginning 2017 when a new, pro-business government assumed office under Nana Addo Dankwa Akufo-Addo, one time Attorney-General and Foreign Minister, it has been a series of digital firsts for Ghana. Google selected it to host the first ever AI research center in Africa, followed by Twitter as its first entry point and headquarters for its African operations.

This is a positive nod to Ghana’s strong digital skills ecosystem,its reputation as a growing digital technology hub, strong government support for digitalisation, as well as its growing regional influence as the headquarters of the African Continental Free Trade Area (AfCFTA).

The groundwork for Digital Ghana is being spearheaded and championed by its indefatigable, Oxford University-educated Vice President, Dr. Mahamudu Bawumia, named recently as one of 100 Most Influential Africans of 2022 by the New African magazine.

He is a man on a mission; to not only use new technologies to solve age-old problems but also betting on the enormous potential a digital workforce, robotics and engineering, cybersecurity, AI and Machine Learning, digital manufacturing, STEM and TVET skills provides for a largely youthful, industrious, and entrepreneurial population.

There is wisdom in the admonishment to not forget to build the pipeline that carries the new oil that data is, and, Dr. Bawumia is building a fistful of it, underpinned by a biometric digital identity (GhanaCard), an open-banking infrastructure (Mobile Money Payments Interoperability System), and a digital address system.

Over the last seven years, no less than ten stand-out digitisation initiatives have been successfully implemented, including the GhanaCard, an ID scheme which provides a secure, global-standard, unique biometric identity for residents, the centrepiece of the Digital Ghana project.

This has already made it possible to integrate databases across public agencies and service providers. Success stories include Social Security and National Insurance Trust (SSNIT); Electricity Company Ghana Limited (ECG); the National Health Insurance Scheme (NHIS), the Driver and Vehicle Licensing Authority (DVLA); Mobile Networks’ SIM cards; Banks; and taxpayer databases.

The implementation of a Mobile Money Payments Interoperability System (MMPIS), making it possible for Ghanaians to move money seamlessly, as well as make payments across and between mobile money wallets and bank accounts, is a global first. The government’s agenda was threefold: increase formalisation of the economy, reduce the exclusion of the poor and the unbanked from the financial services market i.e. achieve financial inclusion objectives, and, deepen the payments ecosystem to help achieve broader economic development goals. The aims of the MMPIS have largely been achieved.

There’s a dizzying number of other government-led digital initiatives as well: a first of a kind National Electronic Pharmacy Platform (e-Pharmacy); an E-Travel Card to control, track, and ensure retirement of travel expenses by public officials; a platform for the National Health Insurance Authority to enable direct registration, renewal, and other functionalities by citizens to the national health insurance scheme; a single-point of access to, and payment for public services (Ghana.Gov); digitisation of the acquisition of passports; and e-Justice system for filing online court processes, case tracking, and case distribution among judges. And all these initiatives have been built by local talent, in collaboration with government.

The foundation for all of this was laid out before the government came into office in 2017. In a policy document it launched in 2016, it promised to put ICT “at the centre of the national development agenda, and also, as part of a strategy to position the country as a regional ICT hub.” To execute this, it listed six main goals which it seems to have pursued almost to the letter: register every resident in Ghana under a National Identification Scheme, integrate all public sector databases using the national identity system as a unique identifier, automate access to public and social services, improve mobile network and data accessibility, support the growth of a vibrant technology ecosystem, and increase the bandwidth and speed of data connections.

The implementation of Ghana’s overarching digital economy project is showing positive signs: since 2017 to 2021, the Information and Communication subsector of the economy have quadrupled in size while more than doubling its growth rate.

But the ambition goes beyond merely integrating databases.

A digital identity enables the development of a vast range of digital services of which Ghana have an active scene, including neobanks and payment platforms (Fintechs), Healthtech systems, Agrotech apps, Edtech platforms, and E-Commerce businesses among others. McKinsey estimates the additional value creation potential of a digital identity in Nigeria at 7.1% of its GDP. A conservative estimate for Ghana, even at half the rate of Nigeria’s, could see a potential multiple billion dollars being added to the economy. Estonia is a great example of what Ghana can achieve if it gets this right.

Estonia’s rise as a global leader in digitisation and digitalisation for economic transformation has been meteoric. When it gained independence from Russia (then Soviet Union) in 1991, it was estimated that less than half of Estonians had telephone lines. By 2017 it was being hailed as both a “digital leader of Europe” and “among the most digitally advanced societies in the world.” By 2018, as having built the worlds most advanced digital society, and by 2019, most tech-savvy society in the world and Europe’s tech hotspot.

Like Ghana, the lynchpin of Estonia’s digitisation is the use of a mandatory digital identity, enabling it to now deliver about 99% of its public services online. Estonia has digitised the payment of taxes by its citizens. It is estimated that by 2019 it has digitised 97% of its health data and 99% of prescriptions. Ghana is on a similar trajectory: the Ghana Health Service has rolled out a national health Patient Records Management System and the National Electronic Pharmacy Platform, and by converting the national ID numbers into tax identification numbers (TINs), Ghana immediately increased the number of formally registered potential taxpayers from 4% of the adult population to 85%! Today, it has rolled out digital tax filing, online and through a mobile app, with significant fiscal implications in the mid to long-term.

Estonia is now leveraging its digital identity platform to break new ground with its e-Residency programme, “a government-issued digital identity and status that provides access to Estonia’s transparent business environment…[enabling] e-resident entrepreneurs from all over the world [to] start an EU-based company and manage business from anywhere, entirely online. Ghana, with its digital identity infrastructure nearly twelve times as large as Estonia’s, can quickly scale up, and leverage its position as the commercial capital of the continent to serve as the hub for global entrepreneurs looking to tap into the over 1.3 billion-people African Continental Free Trade Area (AfCFTA).

A good way of looking at the potential of what is being built in Ghana is to take what Estonia has achieved so far, scale it up by a factor of twenty, and reduce the potential time to completion by a factor of half. What you get is a pouring of gasoline on an already burning digital fire. A turbocharged digital future.

It will not be easy though. With scale comes complexities, and Ghana has plenty, including its peculiar digital-competency gaps. But, it is possible!

They say Estonia is the best of all digital states to date in Europe. We say Ghana has the potential to be the digital state from Africa to best Europe’s best! And right in the middle of it all would be Ghana’s eponymous Digital Champion, Vice President Dr. Mahamudu Bawumia, who, incidentally, is the Presidential candidate for Ghana’s New Patriotic Party (NPP) for the 2024 elections.