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publication June 24, 2020

Zambia’s Digital Transformation Journey: Strides Made, but Key Gaps Remain

Zambia Digital Economy

Photo Credit: Arne Hoel/World Bank


STORY HIGHLIGHTS

  • A new assessment of Zambia’s digital landscape shows Zambia has made significant strides on its path to digital transformation
  • The report shows that that digital financial services in Zambia have increased significantly since 2016, laying the foundation to leverage digitized payment systems more fully across government, particularly to reach the poorest
  • Report recommendations include the development of a digital transformation strategy to help the country meet its national development targets and improve the fiscal space

LUSAKA, June 24, 2020 – Harriet Phiri, a resident in Mtendere township, is one of many Zambians staying home to comply with the health measures put in place to manage the COVID-19 pandemic. While at home, digital payment systems allow for Phiri to pay for basic services such as water, electricity and cable television using her mobile phone.

The COVID-19 (coronavirus) pandemic has increased the use and exposed the potential of digital technology in Zambia. For example, Bank of Zambia recorded a 26% increase in mobile payments from January to April 2020. The Bank of Zambia also reduced transaction fees to enable greater use of digital financial services as part of the country’s economic response measure.

“I don’t need to go out of my home and risk my family and with COVID-19, all I do is pay for services using mobile money services,” said Phiri. “Before the COVID-19 pandemic, I didn’t know how to transact online, but I am now comfortable to do many transactions just by using my phone.”

Digital financial services are just one area of the country’s digital transformation explored in the new digital economy diagnostic report, Accelerating Digital Transformation in Zambia. Digital technologies provide unprecedented opportunity to increase the productivity and market access of the private sector, increase the efficiency of public expenditures, and enhance the cost-effectiveness of public services, according to the report. Digital transformation can therefore play a key role in ensuring that Zambia achieves its ambitious goals of attaining the inclusive economic growth and conducive governance targets indicated in the 7th National Development Plan (7NDP).

The World Bank Group report, developed in close collaboration with a multi-ministerial working group led by the cabinet office, assesses Zambia’s strengths and weaknesses with respect to five pillars; digital infrastructure, digital skills, digital entrepreneurship, digital platforms and digital financial services.

“The Zambia Digital Economy Diagnostic Report comes at a point when the world has been hit with COVID-19; digital technology can be utilized to ensure contactless service delivery in the private and public sectors,” said Sahr Kpundeh, the World Bank Country Manager for Zambia. “Digitization can contribute both to continuity of essential service delivery and to limiting disease spread. As of late, Zambia has made significant strides in digital infrastructure, digital financial services, and digital platforms. This is a good foundation government can leverage in its recovery efforts.”

The report recommends that the government develop a digital transformation strategy that will support its goal of meeting 7NDP targets, and improve the country’s fiscal space. The report suggestions that the strategy include four strategic themes and priority digital transformation actions;

  • Promoting greater use of technologies in the economy, by streamlining compliance costs for connectivity providers, developing a detailed implementation road map and strengthening the institutional capacity of government to protect consumers, data and critical digital infrastructure
  • Reduce government transaction costs and the cost of doing business through digitally optimized systems, including development of a government-wide implementation approach to digitize major government payment flows, enabling data sharing and optimizing and scaling e-border management, e-licenses and public e-procurement systems
  • Improve adoption of innovative solutions by enabling digital entrepreneurship, through conducting a regulatory review related to start-ups and develop a regulatory sandbox for digital innovation, developing a start-up strategy, including explicit attention to technology and entrepreneurship, and investment in public-private partnerships to seed and scale up programs
  • Leverage data and digital systems to improve sector-specific outcomes in secondary towns and rural areas, including identifying two or three priority sectors for transformation, derive priority challenges to address and identify innovative digital transformation solutions that work and partner with the private sector to replicate and scale them, and plan spatially using an integrated approach that takes into account the connectivity, skills and systems required

Currently, Zambia is one of the first 17 African countries to implement the Digital Economy for Africa (DE4A) Initiative, in which the World Bank has committed to investing $25 billion in Africa’s digital transformation.



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