Building Foundations for an Inclusive Digital Future

[audience applauds]

[Lerato Mbele]

Hello, and the warmest welcome to the 2023 Annual Meetings of the World Bank Group and the IMF. I'm Lerato Mbele, and we are live in Marrakesh, Morocco. Before we start, though, I'd like to acknowledge the devastating earthquake that took place in Morocco last month. At this very difficult time, we are here as the global community to stand by Morocco and your people. Our topic today is digital foundations. They are making countries and communities more resilient as they respond to disasters, help businesses thrive, expand access to finance and drive job growth. Please, this is an interactive session, you can share your thoughts on this topic at any time using the hashtag WBmeetings. Also, please send us your questions either online at worldbank.org or in person, using the QR codes displayed in front of you. We will have two panels in this particular session. But let's start with the discussion about how to get the foundations right in order to pave the way for digital transformation. So, please, ladies and gentlemen, join me in welcoming Ms. Ghita Mezzour, the Minister of Digital Transition and Administration Reform here in the Kingdom of Morocco. 

[audience applauds]
We also have Ms. Ursula Owusu-Ekuful, the Minister of Communications and Digitalization in Ghana.

[audience applauds]
And Axel van Trotsenburg, the Managing Director of the World Bank. Thank you all so much for coming.

[audience applauds]

[Lerato Mbele]

All right, I'm going to start off with you, Axel, just in terms of definitions. We are talking about digital foundations, and it seems to me as though it's an expanded definition understanding of digitalization. It's a shift in the terminology somewhat. So, what are digital foundations and why is the terminology shifting to talk about foundations?

[Axel van Trotsenburg]
Well, first of all, the way I always think about digitalization is how many people actually have access and how many don't have access, and I will come to the foundation, but it is always to keep in mind when we're talking about digitalization in events like the annual meetings, why this is so prominent is that in industrialized countries, in advanced countries, nine out of ten people have access to digital services. In low-income countries, is one to four. About 2.7 billion people have no access to the Internet. That means, basically, about 35% of the world population. And I think, therefore, it is important to say if we want to avoid that countries falling behind and what we call the “digital divide”, we have to deal with digitalization. There you come to the foundations. What you need to facilitate is essentially connectivity that is affordable, that is fast. That requires, secondly, building a whole digital infrastructure. And it's often a public infrastructure, but you will need that. And the infrastructure has then two aspects. I would say, the easy ones are in the big cities where you build it. You need infrastructure across the country, and particularly the rural side, which is often ignored. And the third is that you need to build digital skills. And that is you will need to have training, but you will also need to have the whole education system prepare for that. So, one of the things is, therefore, why do we do it? We need to reduce the digital divide in order to allow people to justified access. And then you need to build on those foundations of affordable connectivity, infrastructure, and then the skills. And that is where we need to focus on.

[Lerato Mbele]
Right, so I'm hearing you say the hard infrastructure, but also the softer social issues as well, the usage, the access, the affordability. Okay, the knowledge. Minister Mezzour, can we get a perspective from Morocco? So, when we talk of digital foundations, how are digital foundations supporting the delivery of public services, in particular, considering the tragedy that the country has also suffered? And what are some of the lessons you've learned?

[Ghita Mezzour]

So, in Morocco, His Majesty King Mohammed VI, whenever he talks about digital, it's used as a lever for socioeconomic development, for human development. So we're not doing digital for digital, but it's with the goal to serve society, to serve humans. We talked a lot about connectivity. So, Internet penetration in Morocco is as high as 90%. That’s nine out of ten Moroccans, that’s pretty impressive. We have one of the best telecom infrastructures in Africa, and the country set up a special fund to connect places that are sparsely populated. Telecom operators like to go where there are a lot of people, so, the government helps subsidize them. They help them go and connect rural areas, places where there are not a lot of people. In 2018, more than 10,000 localities that have either no Internet coverage or poor Internet coverage, that need to be covered, and thanks to that fund, today 96% of them are covered with 4G, with good Internet. And you talked about the seism. In the seism, there were BTS, base stations, that went down, because the electricity went down after the earthquake. So there were a number of them that went down. In less than 12 hours, 95% of Internet connectivity went back to that region, thanks to huge efforts of restoring electricity. And if you know about the earthquake, it happened in a mountain area, in remote areas. But huge efforts were deployed immediately to get that station back, and that helped the rescuers, that helped them to help this population. We have very resilient infrastructure connecting even the furthest remote areas in Morocco.

[Lerato Mbele]

There’s wide access, there's spectrum, network and connectivity. And in a tragedy, people could leverage that technology… 

[Ghita Mezzour]

Of course, yes.

[Lerato Mbele]

To get help. Fantastic. A great testimony there. Minister Owusu-Ekuful from Ghana, I'd like to expand on a broader theme which is resilience, and also the notion of inclusion. When we're talking digital foundations, and then we add to that building resilience, but also, inclusion, could you give us a sense of the Ghanaian experience, specially creating inclusion for women?

[Owusu-Ekuful]

Thank you. It's absolutely critical that in all that we do, we don't lose sight of the fact that 50% of the world's population is made up of women, even though traditionally digital technology and science have been seen as a male dominated preserve. In Ghana, we've taken a deliberate attempt, we're making deliberate attempts to include women. And we have several programs from the high school, well, the primary school level, right up to the working population to include them. We've taken our girls in ICT program to another level and they are actively encouraging young people, 9 to 16 years old, to explore the benefits of digital technology. We take it to them where they are, and have trained 5000 every year in the most remote parts of the country. And in addition to that, we have an active mentorship program where women in technology go and spend a day with these girls and encourage them, motivate them, share their experiences with them. Beyond that, those who had never seen a computer before are now building their own websites and simple games, and have moved from aspiring to be in the traditional professions to be software engineers, robotics engineers and all of that. It's quite exciting that after just a week's instruction, we've changed their whole worldview. We've seen a push, that young men are also saying, “Hey, don't forget about us. We're also boys in ICT, so remember us as well.” In the senior high schools, we have an active program for digital skills. It's not just for students, but for even peasant farmers, for workers, for small-scale entrepreneurs and all of that. We have to develop ICT skills for entrepreneurial women. We have a Digital Transformation Centers Program targeting out of school youths and women, and other men living in professions, and persons with disability as well. We want to build on digital technology to make life easier for everybody. And we demystify it and let people know that it is not just reserved for men.

And when the women engage in it, we've seen how actively they're using their social media pages to learn new skills, acquire a second profession, access markets that hitherto would be closed off to them. All manner of ways in which they are using, innovative financing tools as well to get payment solutions and all of that. So, we've seen technology in action at all levels, from the primary school right down to small scale entrepreneurs.

[Lerato Mbele]

It's quite a deliberate effort to empower the girl child from school, her mother, the market trader. I just have a mini-story I can tell. In my home country, South Africa, which basically has everybody banked, quite frankly, to be honest, even if not using a lot of the digital skills. But the exposure really matters because traders would be inclined to hide their money in bags, suitcases, I dare say a mattress, until you realize that platform banking means you trade in real time. And it's that exposure which changes the mindset. Fantastic, okay. And the policies really do elevate that. Axel, I want to bring you back into the conversation, and find out how an organization like the World Bank can help countries catch up, not fall behind in the digital age. And this is really an issue about fragile states, least developed countries, the smaller of the emerging and frontier markets.

[Axel van Trotsenburg]

Well, I think that we need to adopt a multi-set approach, because I think we need to help countries with, for example, regulatory frameworks, to set that up. We have to ask countries how we can help in the setup of the infrastructure. We have also to think how we can help them mobilize the private sector resource. Particularly in the digital area, you can actually rely a lot on the private sector. That means that we need to do that not only in finance, but you need to do that in the health area where you can add a digital service, clearly, in the infrastructure area, also in the education area, in all areas. What we are realizing is it is so important and it is also recognized, when you go to meetings like the G20, where you hear the heads of states talking about the digital divide, the enormous challenges, as well as how digitalization will change the world. That means that we need actually to give high priority to this. And we have decided actually to create an own vice-presidency for this to really combine all the efforts on digitalization. We also would like to probably combine it with all the data work, because data is just exploding exponentially. And then finally, quite important, it’s that this involve money that needs to be made available. Our digital program has been skyrocketing because there is a lot of demand. Personally, I think we would like to be even more ambitious, and particularly in Africa. The African Union has taken very important decisions about digitalization. To what extent can we use far more the concessional resources of IDA? Also, to have an almost Pan African initiative to really accelerate this process. Because the time is not on our side and we need to accelerate. And the final thing that the Bank can do is through the analytics, comparing best practices, experience the good and the less, and share that with the membership, so that one can also avoid mistakes, but really build on the successes that we are observing.

[Lerato Mbele]

Okay, and I think an important thing you said, which I'd just like to amplify, is the fact that within the World Bank Group, the issue of digitalization is so important that you are now making it almost a super portfolio within the organization at vice president level. That’s very, very meaningful. I want to come back to you, Minister, and ask you about some of the biggest constraints that you faced in this era of digital development. And that's you, Minister Owusu-Ekuful. What are just some of the constraints? What are the threats we're talking about here?

[Owusu-Ekufu]

One of the biggest challenges that we face, and I'm grateful to the Bank for its emphasis on digital, is funding, financing the big infrastructure projects that we need. Now, if you look at the fact that since we set out about eight years ago to build 4G networks in our country, we only have 30% of our population with access to high-speed broadband. We still have a very long way to go. Because if you're not connected, you cannot engage in the Fourth Industrial Revolution. So, it's absolutely essential. And the president did highlight it, that we have digital infrastructure, digital skills, and then the devices, affordable access to that infrastructure, and then the devices that will enable us to engage. So, for us, as our economies are struggling and are getting increasingly shut out of the international capital market, we have to look at other ways of financing our infrastructure development and looking at public-private partnership initiatives. Another key area that is of utmost concern to us is cybersecurity. We cannot roll out this digital infrastructure without looking at securing our data. And so much is riding on it. Every sector is digitally connected. So, it's absolutely critical that we look at cybersecurity, and we’re building our own capacity to be able to protect the infrastructure, applications and services that we're putting in place. We've passed a Cybersecurity Law, set up a Cybersecurity Authority, all within the past four years. We have a joint Cybersecurity Committee made up of actors and players in both public and private sector, working together. We're licensing cybersecurity professionals. And we're absolutely keen on building our own capacity in cybersecurity as well. And so, at the end of this year, in November, we're hosting the first Global Cybersecurity Capacity Building Conference, which is being implemented by the World Bank itself, the Global Fund for Cyber Expertise and Global Cyber Peace Forum and the World Economic Forum. And we're excited about that because we are going to begin to have the conversations about how we're going to build the capacity of those of us in the global South to wean ourselves off from our dependence on expensive consultants to manage our digital infrastructure. So, we're looking forward to that.

[Lerato Mbele]

So, what you're saying is, as countries become more innovative, the criminals are also becoming innovative and we really need to step in. Building trust is a big one. Minister Mezzour, I want to bring you into the conversation, not so much on the issue of cybersecurity, unless you do want to talk about efforts that you're taking here, but also the question of helping citizens to empower themselves with the skills. Because if I don't know how to use the technology around me, then all your efforts go to waste as a Minister. And if I don't know how to buffer myself against those threats, if you don't create an environment where you protect against infiltration, vulnerability, then the citizens, again, are the one who loses out. So, I'd like you to talk to us about fostering digital skills and creating an ecosystem that really supports communities, particularly rural communities.

[Ghita Mezzour]

So, as I mentioned earlier, Internet penetration in Morocco is as high as 90%, which means Moroccans are already online. They're using digital tools. They are there already, so it's not that this is something foreign to them. Now, obviously, how to have them make good use of it, how to have them have access to it and leverage that tool, especially in rural areas. So, I will give you the example in COVID, Morocco set up a system to have people take appointments for their vaccines. And that was the only way to get your appointments for the vaccine. And it was through SMS, and all Moroccans were able to get their appointments. Even elderly people, the ones who did not know, they went through their friends or families or et cetera. Everybody was able to get to that system. We're also setting up a lot of proximity points. For example, more than 6000 schools today are equipped with multimedia platforms. Tablets were given to kids to help them have access to online tools. Now, every university student can have a SIM card for free that allows them to have access to online training platforms for free, to have them all the accesses. And curricula at schools, like even mid-schools now include digital skills. They can learn about coding and problem solving even early on. Our strongest thing is how to train professionals. Because we need to have digital literacy and we also need to have professionals who can innovate, who can produce. And for those, we worked with universities to multiply the number of people by orders of magnitude by four or five, to train them in all areas: coding, data science, AI, cybersecurity, et cetera. To have Coding Schools. So we have Coding Schools, we are establishing them around the country. Some of these Coding Schools are for needs. Some of the young people were out of school, out of training, out of education, so, they get into these Coding schools and they can get into the job market. The challenge I were talking in this morning, the challenge for us now is how to do these things at scale. We have a lot of initiatives, a lot of need for that, and now our next ambition is to scale that up and to reach to all Moroccans, not just in some regions or the other.

[Lerato Mbele]

As we wrap up this conversation, we did say it's interactive. We have urged our online audience to send through their questions for you, also, to use your QR code. I'd like now just to take a few questions that have come to me on the device. And the first one, Axel, is for you, which says, “How can developing nations build an inclusive digital future with little or no funding?” It's great to have the ambition, the vision, but if you can't find the money for it...

[Axel van Trotsenburg]

I think you cannot build this digital future on the basis of hope. You will need financing. And therefore, I think international institutions have to scale up. For example, in the discussions about the IDA resources, they are replenished every three years. We are looking at an envelope of currently 93 billion and 70 billion is going to Africa. So next year, we have the next round, and everybody said it should be an ambitious round. So, I hope that we get to a significantly higher number. Now, in that discussion, we would like also to engage with the African leadership to say, “What are some of the strategic investments we should undertake?” And then actually say “What are the most strategic investment African countries could undertake with the support of, for example, the World Bank?” This is our 70 billion dollars. So, you could, of course, have a choice that you sprinkle this everywhere a little bit thinner, or you say, “Look, we need massive improvement on energy access.” But that is also linked to the digitalization. And they should say, “Look, in those areas we need not to double, maybe even to triple the effort.” We would think this would be a very exciting discussion and then to see who we could else mobilize on this. I think, I would feel that it is a bit cynical to say, “Look, you show countries that don't have the resources what you could do, and then you don't facilitate.” So, we need to see this conversation. I think certainly the Bank is prepared for this. I also think it is critically important for the integration, particularly of the African continent, into the world economy. And I would go beyond that. It is also the African countries have decided an African Free Trade Agreement. That needs to be implemented, and the potential for regional integration is just massive. But it requires, I think, also this physical infrastructure for digitalization. And you will be surprised about what happened. You can there see an incredible increase of economic growth. We would like to be a very proactive part on this for all the countries that need to catch up wherever they are, but we also think it can be done. And just to mention this once, because sometimes people say “You can only pinpoint to examples somewhere in Asia or in Europe or the United States,” but if you take, for example, what has happened in Kenya, for example, the financial mobile services. I think the United States could learn a lesson or two from it. They are far ahead of this. So, one of the things is that Africa can do this very successfully when they get the chance to develop this. And we would like to build on that and be big investors in this area.

[Lerato Mbele]

Okay, so a real kind of multifaceted stakeholder management, multilateralism in its truest form. We have a joke in South Africa. Whenever we hear Americans are signing checks, we're like, “Who still signs a check?

Check? We don't sign checks in Africa, we've moved on in terms of mobile money.”
There is another question that's coming through online, and I'm going to pose it to both of you, Ministers, but we'll ask from you first, Minister Mezzour. It says, “How can digital tools support more opportunities for the youths so that they can build on these skills for jobs and become entrepreneurs?”

[Ghita Mezzour]

I think the digital economy offers great opportunities for our youth for jobs. I'll give you an example. In Morocco we have a huge outsourcing sector. We're the second top outsourcing destination in Africa. The sector has 130,000 people, mainly young people, all over the regions of Morocco. And they are working, they're getting jobs. They're outsourcing, there are Moroccan investors, there are American, European, even Indian investors that are here in Morocco to develop the latest technologies for European markets, for American markets, African markets. So, we have big advantages because we have a very young population as any other African countries. We are good in stem. They're very talented people, they can learn digital skills quite easily. And we are five hours from the US, five hours from India, same time zone as Europe. So we have this huge outsourcing sector, and we're interested in even furthering that sector attracting more investors. For example, Americans are not always aware of what the opportunities are in Morocco. So this is a huge opportunity for our young people. The startup ecosystem, obviously in Morocco is also getting bigger and bigger, and that creates a lot of opportunities. To empower these youths there are training programs I mentioned earlier. We're also reskilling people into digital, because some people are aware that digital transformation is going to create job losses. So, we're reskilling. One example of one program is jobs in tech. The goal is to retrain 15,000 young people into digital skills so that they can integrate this new economy and take advantage of this economy. So, it offers a lot of jobs, a lot of opportunities for young people. Women who can work remotely as well from their homes. They can serve clients from all over the world. So digital is really a way to empower our young, our women, for new opportunities. 

[Lerato Mbele]

Yes, and those global business services you referred to through the youths, through digitalization, to great Morocco much more in the global ecosystem of services. Fantastic. A brief comment from you, Minister Owusu-Ekufu, in terms of jobs and entrepreneurship, It's a big issue. You've also got the youths evidence in Ghana.

[Owusu-Ukufu]

Absolutely. Governments alone can't find white collar jobs for all our young people. So digital skills present a unique opportunity for us to give them the skills that they need to be their own entrepreneurs. If we consider the fact that in the next 10-20 years, 50% of the young people in the world will be on the African continent, it's in our interest to give them the tools that they need to be able to succeed in the Fourth Industrial Revolution, which is rapidly unfolding. And for me, digital is the key. They can create their own jobs and engage actively working on the African continent and providing the human resources for the rest of the world, which is rapidly aging. So, it's in our interest to provide the young people of Africa with the tools that they need today to provide the global world of work with the resources that they’ll need tomorrow. And any investment made in that direction cannot be wasted. And for me, digital skills, digital transformation, is the way to go.

[Lerato Mbele]

I think it's a powerful place to leave it because it sounds like a clarion call, a call to action. I want to thank you, Axel van Trotsenburg, Minister Owusu-Ekufu and Minister Ghita Mezzour of Morocco. Thank you very much for your time.

[audience applauds]

[Lerato Mbele]

And you can make your way that way. Thank you. 

[pause]

[Lerato Mbele]

All right. And in a short while, we're going to be having a fireside chat with Makhtar Diop, someone known to many of you. He's the Managing Director of the IFC. We also have Torbjorn Caesar, the Chairman of Actis, and they're going to be talking to us about the key ingredients for mobilizing private investment in digital in developing countries. But first, let's take a look at a few key data points that really stand out as drivers of the opportunities and confronting the challenges of digital transformation. It’s hard for us to talk about inclusive development when 2.6 billion people worldwide remain offline. 2.6 billion people. 1.4 billion people remain unbanked, and 850 million people have no official identification. So, our digital future cannot leave these people behind, as you've heard. But even once people are connected, there is a growing usage gap. So having access to the Internet does not advance development if it is not used effectively. So, usage matters. It's concerning that close onto half or 40% of the world's population were not using mobile Internet last year, despite living in areas with mobile broadband coverage. These people need those digital skills and digital applications that are relevant to their everyday lives so that they can use them. Digital tools are crucial and can help local communities recover, even from natural disasters. Similarly, countries that had strong digital public infrastructure were able to reach three times more beneficiaries during the COVID era. And the opportunities that digitalization are open to really are endless. In 2022, mobile technologies and services generated up to 5% of global GDP, a contribution that's amounted to 5.2 trillion dollars of economic added value and supported 28 million jobs. Now, that is what our future needs: inclusive growth and jobs.

[pause]

[Lerato Mbele]

So right now, please join me in welcoming warmly Torbjorn Caesar, the Chairman and Senior Partner at Actis. And behind him is Makhtar Diop, the Managing Director of the IFC. Thank you so much, gentlemen. Please take your seats.

[Torbjorn Caesar]

Thank you.

[audience applauds]

[Lerato Mbele]

Together they're going to share with us insights on ways to drive private investment in digital transformation. Because we've heard from the policymakers, now I think we need to hear from the investors as to what those core opportunities really are. Okay, so, Makhtar, I want to start with you and welcome you to this conversation. So, the IFC is the largest global development institution, but your work is focused exclusively on the private sector. So, what do you believe the IFC's unique contribution is to supporting digital transformation, digital foundations, as we're talking about them?

[Makhtar Diop]

Thank you, Lerato, it's good to see you again. I'm a bit of the odd person, because I’ve been on both sides. For three years, I led digital work at the World Bank. So, I was deeply involved in the policy discussion. And now I am heading IFC and trying to bring the money to support these objectives that were set at the government level. So, that journey allowed me to see a few things on the specificity of IFC. First, IFC can work closely with policymakers. When you are working in the World Bank Group, it's not only our colleagues like Axel, who was previously on stage, who are engaging, but also they seek our views on how they can shape the dialogue with the governments to be able to attract more private investment. Actually, let me take that opportunity to do some advertising. We are about to launch a large report on Digital Africa which should be released in January. That will be a report that will be capturing the policy aspect and other aspects. Secondly, we are doing work on closing the gap. Actually, a company that you know quite well, Lerato, was one of our large clients, it was an African company, and a couple of years ago, we invested close to 1 billion dollars of resources in fiber optic, in towers and all these, and it was done with companies which was investing in fiber optic, so we contributed to really closing the gap. And 50% of what we are doing is done in what we call “fragile states”, places where people don't want usually to go. So, this is a second element of what we are doing and it allow us to have... My team give me these numbers, 91 million users. I say “Wow, I didn't know that we were doing so much,” 143,000 kilometers of fiber optic. So, 31,000 towers. So, we are not doing little. We are also on the other side of the chain, on the user cases. Because always infrastructure is there to be able. We’re very much involved in Agritech, a lot in Fintech, where we see a lot of disruption, Edutech. So, these are some of the reasons why we’ve created in IFC a department on Disruptive Technology, which invests in funding funds, also in JVs and allowances. And the last thing that I would like to say is that all this is just done for the sake of doing it. It's because we see that it creates jobs. If I look at my own country, Senegal, one of the largest contributors of jobs have been in the youths, have been things which are linked to the digital economy and it continues creating a lot of things. Today I was with Mostafa Terrab in the discussion of OCP. What we have seen the impact of DigiTech of technology on agriculture is quite amazing. So, this is what we are doing.

[Lerato Mbele]

Okay, so I'm hearing a bit about sort of absorbing some of the risks that the market would want to do, and endorsements, because I think if a company goes in and says, “We've got part of IFC funding,” that's credibility, and that makes other investors a little bit more confident to step in. Let’s turn to you Torbjorn, and I want to understand the work in Actis. I hear that you're doubling down on investing in digital infrastructure, and it's a global project to use that terminology. Can you share with us, if you will, your strategy, and what role you think investors play in providing reliable, affordable, and really multiaccess connectivity?

[Torbjorn Caesar]

Absolutely. So, thank you. It's wonderful to be here. So, as you said, doubling down. Let me start just so we think about where we therefore are coming from. So Actis, we are the privatization of CDC, The Commonwealth Development Corporation of the UK. We privatized a bit over 20 years back. We are an infrastructure investor. We invest about 2 billion dollars of equity every year from private funding. So, this is pension funds, sovereign wealth funds, insurance companies whose money we then are managing. If you're looking at us and thinking what is specific or unique with us, I would say three things. We have a very global footprint. We have 17 offices from Mexico City to Japan, so 350 people covering that. We focus on values. Values drive value as a tool in order to make financial return to our investors. And we're billed as an operator. So, we're very hands-on, operational people that control investors and building infrastructure. Like myself. I actually started my career as a young engineer building a power plant in Egypt back in 1987. So, shockingly, 36 years ago. So, if you think power is really where we're coming from, we've done a lot of power across the Global South, but globally, but specifically Global South. And also, then into renewables, specifically. And digital. I think newish to us in some ways. We have put so far, invested, about 1 billion dollars of equity into the digital space. And we went into that because we saw number of trends that made us uniquely positioned to unlock this opportunity. And one being, I guess, the huge growth that we heard about that you need to be investing. We’re going, in many markets, from megawatts to gigawatts. It's just enormous, that needs to happen. But it also is the connection between digital and power. If you don't want to build a data center or fiber or towers, clearly power, reliable power, and I would say increasingly now reliable green power. And that's an area that we know extremely well. So, if you then combine the competence we have had of building data centers across Asia, Latin America, and also one here in Africa with the power competence that we have providing green energy and cleaving that footprint, I think we're pretty uniquely positioned to unlock that.

So as to the question then about strategy… So that's why we're there. If you look at strategy, we're going with the same playbook as we've had in the power space. That is, invest in assets that we bundle into businesses that we then sell. We sell those, recycle that capital and start again. Do assets, create businesses, and start again.

[Lerato Mbele]

I think people often do forget that there's a synergy between the core backbone infrastructure like power and energy, and digitalization. Energy powers the digital economy in many, many ways. And you're saying we can think about energy in more constructive, greener, cleaner ways, but we have to have that synergy. 

[Torbjorn Caesar]

Yes.

[Lerato Mbele]

All right, Makhtar, I want to bring you back into the conversation, and here it's really about the challenges of engaging the private sector in supporting digital transformation, particularly in emerging markets. Because some people say, “Connectivity is the government's responsibility. Why must the private sector come and help them?”

[Makhtar Diop]

You're perfectly right. And I have three of my colleagues here that I worked with very closely, Juan, Sebastian and Michel, who are now leading that work from the Bank. So, we'll be working very closely on certain number of things. Why we are here? The link with power is even go beyond that. You'll be surprised to realize actually a lot of the fiber, the asset on fiber optic, is owned by the Utilities. In fact, when you are monitoring and you are optimizing your network and your grid, you need some fiber optic. So, when I was in the Broadband Commission I was a member of, a big discussion was how to freeze this dark fiber which is sitting there unused. How many times did you see a country in Africa where the government made a huge investment on fiber optic in the country, but they're using 10-20 % of the capacity of that fiber? And there is resistance in leasing or selling this dark fiber which is not used and could be used by the private sector. There is a policy framework there that needs to be addressed to free much more dark fiber. And the mobile operators, Lerato, and there’s something that we’ve heard recently, as with the issue of taxation, and I think this is a question that at some point we need to sit and discuss. Because there is a feeling among operators that sometimes people have been a bit overboard on the level of taxation. As a result, we consider that 4G is a proxy for broadband access in developing countries. And we have seen, in the continent of Africa, the investment on 4G towers is going down. We're not going up because when you are talking to investors, they were telling you “It’s the taxation.” One solution we saw that was quite useful is to engage on the regulatory framework and learning from the experience exactly of energy, because there are a lot of similitudes to unbundle the system. So instead of the telecom owners owning the base station, consider them as business, and we are seeing a lot of opportunity of investment which are yielding good result. So, one thing we don't talk a lot about is cybersecurity. And cybersecurity could be an obstacle in growing the business in Africa. I remember one day when I was working with my colleagues on this, I visited, I was visiting Silicon Valley, Cisco. They have this big - where they show you all the countries. And if I told you the country where the largest amount of cyberattacks were coming that day, you'd be surprised. It was Zimbabwe. It's clear that Zimbabweans were not doing this. It means that someone has hacked an IP from Zimbabwe and from there were attacking the system. So, we should not neglect cybersecurity as there is more and more users.
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Fourth, the cost of handset. In most of the developing country, the digital penetration is done through handset. And handsets are still quite expensive, as you know, because you've been in many of those discussions. So there are some attempts to produce them, but we have mixed results there and it's something that I think needs to be tackled. Lastly, to have a regulator who can really help in accepting more disruption. There were some situations where there are some monopolies.

IFC invested in some disruptive and some startups which really disrupted that sector and allowed us to lower the cost of a lot of services that were provided. So those are the type of questions that more and more we are dealing with. And the last one is ensuring that we're greening all these data centers. And a lot of our investment has been to provide actually opportunity for owners and their data centers to be able to be in a green way. 

[Lerato Mbele]

And I think if you spoke to many young developers, they would concur with so many of the issues that you're saying, just the cost of transacting, the regulators sloganeering, but not actually creating the policy that allows the industry to burgeon. And so as a result, great ideas leave Africa because people just don't know what are the rules of play. Torbjorn, what are the most promising trends that could shape digital access and inclusion? You will know that the subtheme is exactly this inclusion. 

[Torbjorn Caesar]

Yes.

[Lerato Mbele]

Not to leave anyone behind, but not just usage. I could buy the tablet. Do I know how to use it?

[Torbjorn Caesar]
I'm looking at this from the infrastructure side rather than the content side. If you're looking at the two main trends that I see here, one is exactly as I said, share the infrastructure. So, if you can then have towers or fiber or data centers that are shared rather than monopoly owned, clearly it's a better use of capital, and you will then speed up the growth of digitalization. I think that trend is really significant. And that's why players like us, independent owners of this digital infrastructure, see that growth. I think that's a very important trend, and it's important then to make sure that the regulatory framework, and should we say the privatization of that, enables that to happen so you don't sit there with a state monopoly having that infrastructure which is not fully utilized. So that, I think is a huge trend that speeds up that growth. The other one is the one we really talked about, greening the data centers as said, right? The connectivity between power and high-use data centers specifically. I mean, think about the worldwide now, 4% of power is for data centers. And then looking at our customers who we host in the various data centers, the demand for greenly fueled, or the power to them to be green, it is there at the top of the agenda now and it was not the case some time back, right? So, you need to have that combined approach of making sure that you have the renewables lined up and you have the data centers or the other digital infrastructure putting that together and offering therefore a green solution.

[Lerato Mbele]

I do like what you're saying is that the government is scared to just work in those partnerships. Let's just do it, because sometimes the private sector can do it better, and can utilize their skill set a little bit more constructively. How can the private sector, Makhtar, work together with governments and civil society?

[Makthar Diop]

First of all, I have a great team of AI colleagues who are working on digital, so, feel free after the panel to ask them all the questions you want. And this is a very important question that you're raising. I think the issue of content now is becoming more and more important. And if I see the last meetings of the UN Broadband Commission, they are most focused on that we know how we can explode the social fabric of countries. We know that algorithms sometimes are run in a way where to maximize a profit, you are, in fact, orienting people to sides which are not the right ones. You have all these kinds of issues. So, I think this issue of content is something. AI is now in the middle of that conversation whereby you have now a large company, we’ve started investing in the ethics of AI. And I think that if we don't address those issues, you saw recently that there were some people in Nairobi who were complaining about the way in which they were involved in the production of some of the products linked to AI. And it raised some ethical issues. I think the ethics of AI is the second big topic that the civil society can contribute to and help things. The third one is to ensure that the skills are there in less developed countries. Because we don't want to go back to a situation like we have in the textile industry. The government gives to low skills countries and then, later on, you move the ladder. The world is not moving now anymore in a linear manner. And there is an opportunity for developing countries to go deeper down, and particularly in that area. Fifth, fourth is to remember last time you and I talked about it. Billionaires from developing countries believe in the sector, okay? You have a country like, and when I go to talk to people in Nigeria, I say “You have an ecosystem, you have startups, you have people who have things.” And what is happening more and more in these countries, which is good for the investors, is that all the startups which are created, in fact the largest investors, are not coming from the private sector in Africa, they're coming from Silicon Valley, from Europe. And there is no reason why the investors in Africa are not believing in that ecosystem and that green power that you have in the continent to be able to invest and create job and increase value addition. So, it's a call, it is a challenge. We need to have more domestic private sector investing in this, I would say, in this digital economy.

[Lerato Mbele]

Yeah, I mean, just the figures from Lagos, if my memory serves me well, it's more than 20,000 startups and 12,000 in Lagos alone, 20,000 in Nigeria as a whole.

So, it's a very, very innovative country. As we wrap up our conversation, I'll just use the metaphor, Torbjorn, “half empty, half full.” How do you see the picture? Because we've presented the challenges that the private sector faces. It's on the regulatory side. It's predictable laws and policy. It's on the scale side, and it's on the building the hard infrastructure, which costs a lot of money. And then of course, it's sharing the technology, government being comfortable to do that. So, does that present to you opportunity or not?

[Torbjorn Caesar]

Absolutely. I mean, I think it's an absolute phenomenal opportunity to invest in the digital space, digital infrastructure across the world, but certainly in the Global South where that gap is most significant. And if you take your point of working together, I think that is an important part, right? I mean, we've had a meeting with some of the IFC colleagues here before this and we were thinking about we are trying out to unlock a very important project in Eastern Europe together with IFC, looking at a large tower operator that we want to manage. We're looking at another one in South Africa as well. We have with IFC a potential funding where we have that funding across six different markets in local currencies, which is difficult to get commercial lenders to come into doing. And these corporations can then unlock capital and make sure that the growth goes further. So, I'm certainly a “half-full person” in this.

[Lerato Mbele]

Makhtar, half-empty, half-full?

[Makhtar Diop]

No, half-full. Because I think that if you look at the capital market outside the emerging countries, this is certainly a sector that is more familiar with. If you take someone from city of Silicon Valley who want to invest in Africa, you look at the different type of intervention, they understand what is tech, and they're much more comfortable to price the risk. So, I do believe that for emerging countries in Africa, and other parts of the world, this is where the market is more informed about the risk and be ready to invest. So, for that, I'm positive. Secondly, I'm positive because there is a lot of skills available there. The ability to quickly pick up those opportunities exist in places less developed. But we need to tackle some of these issues. I mean, if we start having data centers which don't have the right security level and people put their data, we just need to have one incident for the market to start getting very nervous about it. If a regulator is not playing a ball, as they say, he just pushes all investors out. So, we need to continue watching it. And I think that's where the civil society also can help us. The civil society can help on ensuring that competition is fair, to call it when it's not fair, to be able to have a bit more of accountability when accountability is not in place.

[Lerato Mbele]

I've really enjoyed this conversation because we've heard from the policymakers, the regulators as it were, but now we're hearing about the reality on the transaction side, and it's been very wholesome and also very frank. And I want to thank you, gentlemen, for your candor. Makhtar Diop, Managing Director of the IFC and Torbjorn Caesar, Chairman and Senior Partner at Actis. I really hope that this conversation on digital foundations has really helped you expand your horizons. It's clear from today's session that we do need to urgently prepare strong digital foundations to enable an inclusive digital future. There are key elements and they are clear. First, what we heard today is fast, affordable connectivity and also access to devices. Second, accessible digital public infrastructure. Those investments are needed. And third, we need digital skills. And collectively, these are the essential building blocks. They are like the roads and the arteries. That metaphor that will connect us as we all move forward and unleash investment and innovation in developing countries. And it will open opportunities that accelerate growth, particularly for our young people. And so, ladies and gentlemen, that brings us to the end of this event on digital foundations. I hope it's been informative and also engaging for you. You can watch the replay of this session and other events at the worldbank.org/annualmeetings. Continue engaging, continue sharing your comments online using the hashtag WBmeetings. We'd love to hear more from you. Thank you all for your time. 

[audience applauds]

00:00 Welcome | Building Foundations for an Inclusive Digital Future

Panel discussion | Axel van Trotsenburg, Senior Managing Director, Development Policy and Partnerships, World Bank; Ghita Mezzour, Minister of Digital Transition and Administration Reform, Morocco; Ursula Owusu-Ekuful, Minister of Communications and Digitalisation, Ghana

02:12 What are digital foundations?
04:57 Morocco: Digital foundations and the delivery of public services
07:31 Ghana: Digital foundations, resilience and inclusion
11:42 Helping countries catch up not fall behind in the digital age
15:07 Constraints faced by Ghana in the era of digital development
18:26 Helping citizens to empower themselves with digital skills
22:05 Building an inclusive digital future with little or no funding
26:14 Digital tools, youth, jobs and entrepreneurship

31:19 Data points and insights

Panel discussion | Makhtar Diop, Managing Director, IFC; Torbjorn Caesar, Chairman and Senior Partner, Actis

33:48 The support of the International Finance Corporation (IFC) in digital transformation
37:47 The work of Actis in investing in digital infrastructure
41:25 Challenges in engaging the private sector
46:22 Most promising trends that could shape digital access and inclusion
48:29 How can the private sector work together with governments and civil society
51:48 Half empty, hall full: Opportunities and challenges

54:57 Closure