The digital economy could bring huge benefits to countries in the Middle East and North Africa (MENA), the World Bank points out in a new report on “The benefits of digital for countries in the Middle East and of North Africa: The adoption of digital technologies can accelerate growth and create jobs”.
According to the document released recently, the universal adoption of digital technologies in the countries of the MENA region could bring immense socio-economic benefits, with the key to several hundreds of billions of dollars each year and the creation of many jobs which today make lacking today.
“The benefits of moving to a more digital economy are exponential,” said Ferid Belhaj, World Bank Vice President for the Middle East and North Africa, calling on governments to do everything in their power. to eliminate the obstacles that hinder this transition. And to add: “The gains will be all the more important as the transition is rapid”.
As the authors of the said report argue, the widespread use of digital services such as mobile money and paperless payments has the potential to strongly boost economic growth.
According to the explanations of the World Bank, this expansion effect is mainly due to the fact that “digital technologies reduce the information costs that hinder economic transactions”.
As the Bretton Woods institution points out in a press release, “these costs are all the lower as the number of users increases”.
According to the projections of the authors of the report, the complete digitalization of the economy could lead to an increase in GDP per capita of at least 46% over 30 years. Which, they argue, would represent an estimated long-term gain of at least $1.6 trillion for the region.
It thus emerges from these projections that the gain in GDP per capita would amount to nearly 300 billion dollars in the first year, according to the World Bank.
The international financial institution specifies that “the growth gains would be more marked in low-income countries, where they would reach at least 71%, knowing that they result from the reduction of the digital divide and that this is less pronounced in high-income countries.
The World Bank further indicates that the universal adoption of digital technologies would double the participation rate of women, with an increase of approximately 20 percentage points over a period of 30 years. This should result in an increase in the number of working women from 40 to 80 million.
The other benefit of moving to a more digital economy is that “a digital transformation would create jobs in a region where the unemployment rate is at an unacceptable level, especially among young people and women,” according to Ferid Belhaj.
The report notes in this regard that employment in the manufacturing sector would increase by at least 5% over 30 years, with 1.5 million additional jobs over this period, or an average of 50,000 new jobs each year. .
According to projections, frictional unemployment, or “natural” unemployment, could drop from 10 to 7% over a period of six years (corresponding to a reduction in the number of unemployed from 12 to around 8 million), and disappear in 16 years.
The World Bank estimates that “the time required to match job offers and job seekers is considerably reduced by the use of technologies such as e-mail, job search or professional networking platforms, which facilitate the search for jobs. employment and the application process”.
Addressing the issue of the reluctance towards the use of digital technologies for financial transactions observed in the region, the World Bank argues that this “is probably due to the lack of confidence of the society towards the public administration and the companies business” and regulations that complicate digital transformation.
To increase the supply and use of mobile money and digital payments, for example, the international body advocates in particular to further open the telecommunications market to competition”. This would have the advantage of improving financial inclusion by broadening access to current accounts.
Another suggested measure: “Put in place a stronger regulatory framework conducive to the development of e-commerce, particularly with regard to electronic signature systems, data privacy protection and cybersecurity”.
Finally, more generally, the World Bank considers that “it is essential to prioritize the reforms essential to the generalization of dematerialized payments to accelerate the digital transformation of the economy in the MENA region”.