Data access for economic growth in Africa

Sub-Saharan Africa has abundant natural resources and a substantial market, with an estimated population of 1.2 billion. The population is projected to grow by nearly 80% and reach almost 2 billion people by 2043. This population growth is expected to parallel an economic expansion, with annual economic output projected to reach USD 11.85 trillion with a GDP per capita of USD 5,996 in the next 20 years. Nonetheless, numerous African nations have yet to realize and exploit their complete potential despite having expansive economic opportunities.

Various underlying elements, including technological advancements, changes in global market dynamics, shifts in consumer behaviour, and effective economic policies play an essential role in inducing economic growth. Among several actions that can enhance the prospects for the region’s economy, one particularly intriguing option is to increase the accessibility and use of administrative data. This low-hanging fruit deserves particular attention, as it can contribute to more effective and efficient policies.

The challenges in unlocking the economic impact of data

Within several spheres of expertise and economic discourse, there is a belief that fostering greater data sharing and establishing trust within data ecosystems hold the optimal potential to unlock economic impact, contributing between 0.7% and 2% to GDP. In particular, the access and effective use of large (administrative) data allows for improved efficiency and productivity. Though this prospect holds promise, the journey involves nuanced considerations because achieving widespread access to administrative datasets is difficult. This remains especially true in low- and middle-income countries where the potential of administrative data remains largely untapped.

Organizations, both public and private, collect administrative data regularly for their respective internal decision-making. Despite such systematic data collection, many of them need more internal capacity to actively aggregate and analyze it. Even when organizations undertake data analysis, the short timelines and tight budgets of programme cycles often limit the scope of data analysis. Other challenges include the absence of standardized procedures and legal mandates which often hamper effective data sharing. The role of automation, strategic identity management, and the implementation of registration services for public goods is also often missed. Incorporating these elements would streamline processes and enhance data-sharing capabilities, particularly, if different stakeholders advocated for the adoption of a single identification system across public institutions, such as schools, hospitals, and public services. The unified ID system would not only facilitate seamless data exchange but also unlock the full potential of big data for economic growth. Establishing a standardized and interoperable framework could support in overcoming barriers to effective collaboration, allowing different stakeholders to harness the power of comprehensive data for informed decision-making.

But where do we start?

The first step for African governments could involve formally establishing initiatives that grant data access and usage for interested parties. While some African countries acknowledge the importance of this and actively implement such initiatives, many others need to catch up to avoid impeding progress in regional access and transparency. Frequently referred to as the ‘new oil’, data harbors the potential to empower governments and inform better policy decisions. A prime illustration of this potential comes to light through UNU-WIDER's SA-TIED and Domestic Revenue Mobilization programmes, which aim to improve policymaking by making administrative data accessible to researchers and policy analysts engaged in the formulation of policy. Both initiatives have made tangible progress in compiling datasets from national administrative tax data.

There is also an opportunity to improve approaches and collaborative perspectives to enhance the handling and protection of administrative data for its application in policy research. This opportunity was apparent during the recent Navigating administrative data access: strategies, reasons, and partner perspectives capacity development initiative facilitated by the UK Office for National Statistics (UK- ONS) and hosted by UNU-WIDER, the National Treasury of South Africa, the Spatial Economic Activity Data South Africa, and the SA-TIED programme, along with other key stakeholders.

Charting the future

Interacting with over 100 senior government officials from South Africa, Zambia, Uganda, Mozambique, Tanzania, and Rwanda at this event provided valuable insights into the indispensable role of administrative data in driving socioeconomic advancement across the African continent. This foundational data not only forms the bedrock for evidence-based policies and targeted interventions, but also ensures optimal allocation of resources. As our UK-ONS counterparts demonstrated during the capacity development initiative, achieving the goal of the effective use and integration of administrative data to drive socioeconomic advancement across the African continent demands a multifaceted approach. Training to support data privacy and guarantee the efficient functioning of data centers stands out as a crucial step. The emphasis on transparently safeguarding data and privacy and instilling confidence and trust among data suppliers and the public is another. Simultaneously, there is a need to raise awareness about diverse data access modes and establish secure environments for data access by researchers. This will support increased data accessibility for evidence-based policymaking and act as a catalyst for unlocking the latent potential of our economies and fostering transformative change for the benefit of our citizens. African governments have yet to leverage administrative data extensively. To enhance the coordination and monitoring of our ongoing economic initiatives, it may be prudent to make administrative data more readily accessible across a broader range of nations. We believe that this move may accurately depict disparities across regions, empowering policymakers to target policies where needed.

The views expressed in this piece are those of the author(s), and do not necessarily reflect the views of the Institute or the United Nations University, nor the programme/project donors.