Eswatini’s undeveloped digital economy has untapped potential, offering it the opportunity to embark on a digital revolution that would bring its small population a range of promising benefits.
Digital innovation in the agricultural sector, the main source of income and livelihood for 70% of Swazis, would significantly increase productivity gains and reduce poverty in rural areas. Overall digital transformation in Eswatini could drive sustained and inclusive economic growth, providing much-needed jobs to its youthful workforce while helping unlock new channels to access quality services.
A country’s ability to digitally adapt was shown to be crucial during the COVID-19 pandemic, which demonstrated how digital transformation can build resilience in economies and stimulate creative solutions. Eswatini currently lags in digital development compared to its neighbors: Adoption of broadband services is low, with a mobile broadband penetration of only 35%. This has had a negative impact on the deployment and usage of e-government and e-commerce services, as well as on the growth of digital entrepreneurship.
But every challenge comes with an opportunity and, with so much room for growth, the time is now for Eswatini to begin harnessing the digital dividend.
Developing a clear roadmap
The development of a roadmap, aimed at building the foundations of Eswatini’s digital economy, is the focus of our recent report: World Bank Digital Economy Diagnostic for Eswatini. The report assesses the five interconnected pillars of Eswatini’s digital economy: Digital Infrastructure, Digital Platforms, Digital Financial Services, Digital Skills, and Digital Entrepreneurship. Our recommendations, based on these pillars, highlight the promise of improvements for the country.
The key to digital transformation begins with addressing the country’s unaffordable internet rates. This lack of affordability is due to incomplete market liberalization and lack of competition as the Eswatini Post and Telecommunications Corporation (EPTC) holds a partial monopoly of the telecom sector. The impact is harsh when combined with Eswatini’s lack of direct access, as a landlocked country, to submarine cables.
A critical first step identified in the report is unbundling EPTC and developing critical, regulatory safeguards that enable room for competition and increased investment. Ultimately, the knock-on effect of these high service costs has led to the low adoption of broadband services. For the country’s citizens, this issue needs to be addressed as a primary factor in helping them make productive use of the internet and unlock entrepreneurial growth.
In addition, to fully benefit from digital transformation, Eswatini requires a digitally literate population and digitally competent workforce. However, the availability of adequate educational curricula and quality training is limited. Only 10% of primary schools and 60% of secondary schools are currently connected to the internet. Connecting educational institutions across Eswatini will help grow the population’s digital skills, crucially amongst the younger generation who can take these skills into the work environment later in life.
Enabling a greater proportion of the country’s citizens to use e-platforms, in turn, will serve to increase demand for digital services and provide incentives to develop them further. This cyclical effect will eventually lead to digital services that provide both enhanced user experience and benefits, and which are curated to the needs of the end user.
The role of government to support digital growth
A critical role in the country’s digital transformation lies with the government. The report highlights the fact that the government needs to commit itself to implementing legal and policy reforms to develop an enabling environment that will foster private investments. By helping to establish comprehensive policies and implementation plans that address the lack of digital infrastructure in schools and universities and build digital skills in the education system, the next generation can also be equipped with the tools they need to become Eswatini’s digital future.
There are signs that the government is becoming more committed to the digital agenda; the Royal Science and Technology Park (RSTP) is evidence of this. RSTP is a digital incubator that provides world-class facilities for digital startups and is well-positioned to act as an entrepreneurship ecosystem hub. Effectively leveraging RSTP is key to growing Eswatini’s digital entrepreneurship ecosystem, which is the least developed in the Southern African region after Lesotho.
Finally, innovative digital financial services can be anchored in Eswatini’s solid financial infrastructure, the result of more than two decades of work to modernize the payments landscape. Three in four adults now use mobile money, a positive move towards greater digital integration. Nonetheless, more needs to be done to improve access to financial services, including full interoperability between banks and non-banks.
Looking to the future
So, what next? Clearly, while there is a long way to go, Eswatini is at an exciting and critical juncture in its digital journey, with key decisions taken in the coming months and years likely to shape how far and how quickly the country’s digital transformation takes place.
A coordinated and holistic approach will be needed since each foundational pillar plays an important role and each reinforces the other. For example, improved digital connectivity can only have a transformational impact on economic opportunity when combined with improved digital skills, access to digital financial services, and support to digital entrepreneurs. The government’s ability to leverage technology for improved efficiency and service delivery is key to enable the interlinkages between the pillars and create synergetic effects. The combined effect of these improvements is larger than their sum.
The World Bank is committed to support Eswatini’s digital revolution and joined in the global campaign for this year’s International Women's Day 2023, which was convened with the theme “DigitALL: Innovation and technology for gender equality.” This will help to address some of the disparities that exist not only in Eswatini but worldwide in providing digital opportunities for all and bridging the digital gender gap.