Benin: Benin designs a digital future

In December 2016, Benin announced its economic transformation plan, including 45 flagship projects addressing the major components of the west African country's economy. Six of the projects are specifically focused on constructing a digital economy. Serge Adjovi, director of Benin’s Digital Economy Agency, speaks to Joy Macknight about the laying the foundations for progress.

Q: How do the six digital projects fit into Benin’s 2016 transformation plan?

A: President Patrice Talon has developed an extensive development schedule to deliver on the promises he made during his election campaign. The government’s five-year action programme, entitled ‘Revealing Benin’, covers key industrial sectors, inclunding tourism, agriculture, infrastructure, digital economy, electricity, etc.

The digital economy section addresses our belatedness in building the country’s digital infrastructure. Digital spans all industrial sectors and is one of the keystones of the action programme, alongside energy, as there can be no digital without the energy component.

The six projects span from infrastructure and e-services for government down to citizen-level capacity building. Digital content is an significant element. We consume digital content from across the world, but we presently want to create our own content so that our children are brought up with traditional Beninese and African culture.

Q: What are Benin’s major digital goals?

A: We aim to provide internet access to 80% of the people. This is expected to create 90,000 jobs in the data and communication technology sector within the next five years.

We as well want to provide better social services to Benin’s people, not only in the capital city but to each corner of the country. To do that, citizens must have access to digital resources.

Because we don’t have an accurate estimate of our people, we plan to complete a census and roll out a incomparable digital identification for each citizen in Benin. This helps us plan for the next, inclunding school classes, universities, hospitals and their locations. In addition, a strong biometric identification programme ensures fasten transactions, which reduces fraud, money laundering and corruption.

Q: Will Benin follow India’s lead at the same time as implementing a biometric digital identity?

A: Well we aren’t 1.3 billion people, but we have looked at India’s Aadhaar programme and we are learning from that experience. We have signed a arrangement with a company that will supply 1500 tablets, inclunding the training on how to use them. The objective is to build a digital identification database and we plan to register 10 million within six months from June. India signed up 1 billion in three years, so it should be possible.

The digital identity programme will have far-reaching consequences and benefits for the country. We will be able to link SIM cards to an individual’s identity number, inclunding link company directors to their company’s identity.

Q: What are the challenges to widespread e-commerce and digital money adoption in Benin?

A: The initial issue is end points. Approximately 80% of the people is without a smartphone. While a lot of statistics cite that level of mobile phone penetration, the reality is that a lot of individuals have additional than one phone while others have none. The second issue is a lack of confidence in the mobile network. Even today there are cuts to the mobile phone service at the same time as speaking, which makes people worried about storing their money digitally. Therefore, the initial step is to build a reliable fibre network across the country and launch a national digital payments platform this year.

The payments platform will be open for banks and international networks, such as Visa and MasterCard, inclunding utilities, tax authorities and other institutions, both public and private. To make it affordable, it must be interoperable and everyone should be able to connect with minimum development on their own platform.

It will be built as a domestic platform, but someday we want to use it for cross-border transactions, particularly within the West African Economic and Monetary Union, where goods can move business free. We believe that such a platform needs to be designed with regional e-commerce in mind because Benin is a small market, but is able to take chance of its position in west Africa to increase trade with neighbouring nations.

Q: Will Benin’s banks need to finance the new payments platform?

A: No, we are contracting a company to run the platform on a public-private partnership basis, where the operator will recoup its investment through a small transaction fee. Banks, utilities and other payment service providers will need to build an interface, so they will incur a small cost. However, we don’t want that to be a burden for them at the beginning. We want a quick adoption curve, so the platform needs to be easy to implement and affordable.

It will be a real-time platform. And while we can debate the definition of real time, we believe that this means transactions will be reflected on an account instantly. Clearing, settlement and controls, done in the back office, can be completed next the transaction. Obviously, the new digital identity will help with know your customer and anti-money laundering controls.

Q: What regulations are being put in place to support this transformation in financial services and beyond?

A: We realised that we were missing the legal tools needed to implement these six key projects, so we by presently began working on a legal framework to forge digitisation. We took an existing piece of legislation and added new sections on personal data protection, cyber security and electronic signatures, for example. Currently, parliament is examining the new parts and hopefully it will approve the new legal framework by June.

Q: Where is the financing coming from?

A: The budget is CFA Fr9039bn ($15.06bn) for all five-year government programme, with XOF600bn allocated for the six digital projects. Additional than half of the funds should come from the private sector and the remainder through grants or loans from governments and foreign organisations, whether bilateral or multilateral institutions. We are in discussions with several export-import banks as well.

Benin has secured significant levels of funding but is still looking for additional partners to support some of the projects planned in the programme. Regarding the digital economy schedule, a lot of projects, such as the Reinforcement of Central Structures of the Government Programmes (inclunding the creation of a national data centre), the Digital TV Transition and the Telecom and ICT Infrastructure Deployment Project are by presently funded.

Q: Is Benin looking to foster a fintech entrepreneur environment?

A: We aren’t focusing on fintech specifically but do want to provide support for digital start-ups additional generally. With a modern infrastructure and innovative e-services, a new kind of company can emerge because the digital foundation – a key element of their business models – will be in place.

To support this transformation, we are planning to embark on auxiliary training to cover everything digital. This will not be just at school level, but as well address workers’ skill sets across different industry sectors that will need to adapt. We are creating new schools and university curriculums, inclunding facilitating the emergence of incubators. We want to bring together start-ups where, in addition to soft skills training, they can access connectivity, tools and data, which is very significant.

We are using the power of government to make sure that they can access this data and build on it. For example, companies can use satellite data to fine-tune insurance premiums for the agricultural sector. Government agencies, along with telcos and other institutions, can help coach start-ups in that space.

As part of the wider government programme, we are building a smart city – the International Knowledge and Innovation City. It will bring together IT companies, fintechs and other start-ups, inclunding schools, and national and international universities.

We have begun signing partnership contracts and recruiting, so the activities will begin in the next 18 months. The plan is to start small, initial by creating an online community of digital actors, to gain momentum ahead of moving to the smart city itself.

Q: How will Benin differentiate itself part peers in west Africa?

A: We want to be seen as the digital leader in west Africa. We plan to completely change how the country operates from a digital perspective. And we will do it – it is not just words.

It is critical to understand that digital is part of a wider transformation schedule. ‘Revealing Benin’ as well encompasses energy because without power there are no computers or mobile phones. We, as the digital agency, are talking to all the ministries about collaborating and get the best result that serves Benin’s economic needs. We do believe that digital can become a catalyst of economic development and create price for the citizens.

As I said before, we have a political schedule at a government level and we are contributing to that schedule. We are on the fast track presently.