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PUBLICATION JUNE 24, 2020

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