By KAYODE TOKEDE, Lagos
The International Monetary Fund (IMF) has said federal government’s embracement of digital payment could save between $5 and $9 billion (N3.2trillion), which is about 1.7 per cent of Gross Domestic Product (GDP), for Nigeria.
Managing Director of the Fund, Christine Lagarde, disclosed this while speaking at the Foundations of Technological Transformation in Africa organized by the United Nations Economic Commission for Africa (UNECA) held in Ethiopia at the weekend.
In her speech titled, ‘The impact of technology for the economies of Africa and the new opportunities is created for the next generation’, the IMF chief said that technology of all kinds need public involvement and good public-private sector partnerships to succeed.
On how governments can leverage digital tools, she said, “IMF analysis in our recently published book, ‘Digital Revolutions in Public Finance’, shows that across the developing world, countries could save around one per cent of GDP by updating their government payment systems from cash to digital. In some places in Africa the potential is even higher”.
The IMF boss observed that Information Technology is already shaping Africa but right investments remain a powerful tool to help build stronger economies for Africa in the Future.
Largade also outlined how economic diversification is part of the solution and how it is critical to strike the right balance between investment and debt sustainability.
She projected Africa’s growth at expected rate of 2.9 per cent in 2017 and 3.5 per cent in 2018 and 2019 due to the recovery that is strengthening in many countries in the continent.
According to her, while there is a direct link between roads, education and health systems and innovation, it is a powerful reminder that technological innovation requires a strong foundation to flourish.
The IMF boss further stated: “Because historic demographic changes require us – all of us – to focus on youth and assess the impact of these changes, this is a moment where young people can take their destinies into their own hands.
“In fact, youth in Africa already comprise 75 per cent of the working age population. By 2030, over half of new workers entering the global labor force will come from Africa. With the right strategy, the demographic dividend can bring prosperity. This incredible surge could translate into a virtuous cycle of economic growth and development.
“Globally, the sun is shining through the clouds and helping most economies generate the strongest growth since the financial crisis. The IMF is projecting 3.6 percent growth for 2017 and 3.7 per cent for 2018”.
She pointed out that although this topline number masks significant variations among countries, nearly one-third of nations are growing at around 5 per cent, while others — particularly the commodity exporters — are seeing a slowdown due to lower commodity prices.
She continued: “On a GDP per capita basis, 15 countries on the continent are expected to see a decline this year. This encompasses about 40 per cent of the population.
“One concern we see is a sharp increase in public debt, which has reached 50 per cent of GDP in nearly half of sub-Saharan Africa’s countries. This is a big cloud on the horizon.
“How can we find a way to achieve lasting growth that is stronger and more inclusive, so that people across Africa benefit and see higher living standards?”