India points the way to digital access across Africa

The so-called India Stack — a public digital highway that enables payments and biometric identification — has transformed the lives of millions of Indians, according to its advocates. Now, this kind of digital public infrastructure, or DPI, is being held up as model for other countries seeking to boost economic growth, and meet sustainable development goals.

Since its rollout over the past decade, the India Stack has been credited with squeezing corruption, increasing tax efficiency and empowering citizens previously excluded from formal health, education or banking systems.

Thanks to its open-source digital infrastructure, the government and private companies have been able to build apps, verify the identity of citizens, and transfer payments and private data. Nearly every adult in India now has a 12-digit biometric identity, known as Aadhaar, enabling them to access services.

The UN has already recognised the role of the India Stack in helping the government deal with the Covid crisis, as well as promoting development. “DPI can accelerate global economic growth, support the transition to sustainable and green economies, and grow accessibility and public trust in institutions,” it said in a report last month. The World Bank has also targeted loans at improving digital infrastructure.

Supporters of DPI say its wide scale adoption could have a similar effect on an entire continent: Africa. Bill Gates, co-founder of Microsoft, who co-chairs the Bill & Melinda Gates Foundation, is among those who argue DPI is the key to unlocking growth and meeting poverty-reduction targets across many of the 54 African countries.

“Digitising things reduces overheads massively and it does it in a pro-equity way,” he tells the Financial Times in an interview, shortly after a trip to Nigeria in which he advocated rollout of DPI.

Its adoption could bring tens of millions of people into the financial system and improve state competence, he says.

DPI is particularly beneficial to rural women excluded from formal banking, he says. “The ideal is for a woman to have her own savings account. There’s lots of data [showing] money will go less to consumption, including on alcohol, and more on school fees and saving.”

In Africa, Gates says, making payments directly to people could also help reduce corruption, particularly in the distribution of direct payments to targeted individuals. This is an approach being considered, for example, in Nigeria, as a way of softening the blow of the recent removal of the petrol subsidy.

“Leakage in the system has gone down very dramatically,” Gates says of the Indian experience, which he believes could be replicated in countries such as Nigeria. “With [old] cash payment systems, the cash would show up and the big man in the village would get his piece. Now he can’t get that because it’s going on to her phone directly.” The Bill & Melinda Gates Foundation has committed $200mn over five years to promote digital public infrastructure.

Digitising things reduces overheads massively and it does it in a pro-equity way

In some ways, many countries in Africa have been early adopters of digital technologies. Nigeria, which had a rudimentary fixed-line telephone system, went straight to mobile. Kenya was a pioneer in mobile payments with the M-Pesa phone-to-phone money transfer system, launched in 2007 and emulated, with greater or lesser success, around the continent.

Some 20 African countries have nationwide digital payment systems, with a further 18 in the process of implementation, according to AfricaNenda, a Kenyan NGO supported by the Gates Foundation.

But, in important ways, Africa has lagged behind. That is especially the case with digital ID. According to the World Bank, an estimated 470mn people in sub-Saharan Africa lack any form of official identification at all.

Arun Kumar Gurumurthy, head of strategy at MOSIP, an open source ID group spun out of International Institute of Information Technology, Bengaluru, says “digital can be a public good”. Gurumurthy has advised governments in Ethiopia, Morocco, Sierra Leone, Guinea and Togo on rolling out their own national identification systems. He says the MOSIP ID platform helped the Philippines — an early adopter — and Togo to better target emergency payments during the pandemic directly to people’s accounts.

Other proponents of DPI include Ghana’s vice-president Mahamudu Bawumia, who has led efforts to digitalise services and digitally map residencies. Governments, he argues, are not able to serve their people if they do not know who they are. “Countries that fail to digitalise their economies are likely to be uncompetitive,” he says.

Some critics strike a note of caution, though, arguing that it is dangerous if authoritarian governments know too much about their citizens.

While India’s DPI has pulled unprecedented numbers of people online, it has also brought warnings about the potential for misuse of personal data by state institutions and companies. India has also suffered a string of mass data breaches involving Aadhaar.

Nanjala Nyabola, a Kenyan author, whose book Digital Democracy, Analogue Politics questions the prioritising of technology, says platforms reflect the values of the governments implementing them. “Digital identity systems will only make governments more efficient at what they are already doing,” she argues, noting that digital IDs could be used to suppress, or discriminate against, certain citizens.

Gates acknowledges that digital ID could be abused: “Anything that makes the state more effective is good for the things you like the state to do, and bad for the things you don’t like the state to do,” he says. But, he suggests that, in almost all cases, a competent government is better than an incompetent one.

“You can believe in anarchy and that there should not be a state,” he says. “But, if you believe in a state that should provide you education, and should let you vote and should give you health services, there’s got to be some notion of, ‘Who are my citizens and are they eligible for this benefit?’”