How governments in developing countries can close the digital divide

National income levels are a critical factor in the digital divide, but the health of public finances is not the only explanation. Political will, strategic leadership and a country’s ideological commitment to providing digital services also influence the speed of adoption.

Countries in emerging markets that have these three attributes can speed up their development of digital infrastructure and services. In turn, they will fuel economic development.

But our experience shows us that there is another, equally important, factor: citizen participation. The EY Connected Citizens survey, based on the views of more than 13,000 people in 13 countries, reveals that there is a global demand for digital services. In particular, it shows that there is a deep desire by citizens in emerging markets to use digital tools to access public services and connect with government.

Citizens want more digital services

We believe that the emerging markets covered by the survey — India, Malaysia, Brazil, South Africa and Mexico — reflect the experience of less-developed countries as their citizens increasingly move online.

The findings show that 44% of adults in emerging markets would like to access public services seamlessly through different channels, and 66% would welcome a single digital identification (ID) when dealing with the government.

Citizens in these countries also have a clear interest in keeping up with technology change, particularly in India (85%) and South Africa (83%).

Citizens in emerging economies are also more optimistic than those in developed countries about how technology can improve how they interact with public services. It is an opinion held by 76% of the population of Malaysia, for example. And significant majorities of Indians (73%) and Brazilians (63%) hold out strong hopes for improvements in public service from digital technology.

These numbers could be attributed to the age profile of many emerging and developing markets. Demographic data indicates that about 90% of people under 30 live outside developed world economies and 40% of the workforce will be Gen Z by 2030. According to the Connected Citizens research, these young people are far more likely to be Diligent Strivers — aspirational urban-dwellers who expect seamless digital government services and are keen to take advantage of what technology can offer to get ahead in life.

To meet these citizen expectations, however, governments in emerging markets need to improve their digital infrastructure. The good news is that this is happening. Latin America is one example. The latest UN E-Government Survey  now places Argentina, Brazil, Chile, Costa Rica and Uruguay among the world’s more advanced digital economies.

Others need to accelerate their strategies, so no one is left behind.

A spotlight on Africa’s growing e-services

According to the latest UN E-Government Development Index (pdf), Africa lags the rest of the world on e-government. It scores 0.40 (on a scale of 0 to 1) — compared to the global average of 0.61.

But the continent is not standing still. More African countries have moved into a higher group of the UN index than in any other region, for instance (21 countries, or 39% since 2016). The continent is also home to some impressive individual examples, such as South Africa (0.73), Mauritius (0.72) and the Seychelles (0.67). Most African countries have an e-government policy or strategy - the key challenge has been the execution of the strategy.

Across the region, the range of non-governmental e-services is also slowly growing, especially in the financial sector. Today, more than half of the continent’s countries offer an average of 12 services online with five countries (Nigeria, Rwanda, Angola, Egypt and South Africa) offering between 20-21 online services, according to the latest UN figures. 

Public Finance Management is the first step

Most African governments have invested in base, operational digital systems: financial (budgeting, expenditure and revenue management systems), financial trading and HR systems. However, these systems have yet to be developed to provide better service delivery to citizens.

One area where governments often focus their initial efforts is public financial management. This is a sensible first step, given low tax compliance, limited transparency and the difficulty that many African governments face in monitoring public spending.

“The focus for many administrations has been putting a dependable, efficient treasury management system in place, as well as creating and strengthening revenue agencies,” says Joe Cosma, EY Africa Government & Infrastructure, Advisory Sector Leader. “Then you can build from there, creating digital services that bring efficiency to government and that are more focused on service delivery for citizens.”

In Ghana, the Ghana Revenue Authority has designed and implemented a data warehouse and data analytics system. The project aims to widen the tax net by aggregating data from multiple sources and providing a comprehensive view of taxpayer obligations. It is part of the Ghana Economic Management Strengthening Technical Assistance Project, funded by the World Bank.

In Nigeria, the Federal Ministry of Finance is rolling out a software-as-a-service (SaaS) e-procurement solution across the country’s 36 states. The program is part of the World Bank’s States Fiscal Transparency, Accountability and Sustainability (SFTAS) Program for Results, which aims to strengthen fiscal transparency to help build trust in government, increase accountability in public resource management and ensure sustainability in the participating states.

Even when governments invest in digitalizing public services, citizens do not always have the electronic devices or internet access they need to use them. According to new figures from the International Telecommunications Union (ITU), “vast swaths” of humanity are currently excluded from the online experience.

“While the number of Internet users surged from just a few million in the early 1990s to almost 5 billion today, 2.9 billion people remain totally offline,” says the ITU’s Global Connectivity Report 2022.

Many hundreds of millions more worldwide struggle with expensive, poor-quality internet access that does little to materially improve their lives, according to the report. The diverging speed of e-government adoption rates risks exacerbating existing imbalances, which goes against the UN’s Sustainable Development Goal (SDG) of “Reducing inequality within and among countries.”

Digitalized public services rest on strategy, not piecemeal projects

As a result of this inequality, “ensuring no one is left behind” has become a rallying cry for government technologists. But that goal will take work, and the first and most obvious steps are on the supply side. Governments will need to:

• Install robust internet infrastructure.
• Digitalize services.
  
• Recruit skilled public servants to fulfil the service.

Only an integrated, embedded strategy can secure the political leadership, coherent vision and cross-governmental cooperation that this transformation needs. In our experience, leaders rush to create services at the front end that are visible to citizens, but often these projects are piecemeal and lack established digital foundations and governance to ensure sustainable digital development.

“You need the core enablers of digital government: connectivity, digital identity, interoperability and data registries,” says Arturas Piliponis, EY Digital Leader for EU institutions. “It’s hard work, but without these coupled with user centric service design approach you cannot build effective digital services and respectively digital state.”

Policymakers need to be enthusiastic — and joined up

To get internal support for digitalization, politicians and other senior policymakers need to understand how digital government can address service shortfalls. For a developing economy struggling to provide universal education or supply its citizens with clean water, e-government can feel like a luxury. But if digitalization is shown to be a necessary aid, rather than an optional extra, that perception begins to shift.

Alongside that changed mindset, a successful digital transition needs joined-up digital and development policymaking at both local and regional levels.

Bureaucratic and institutional silos are the enemy of public e-services. At a technical level, it is perfectly possible for individual government departments to digitalize their own activities, and many do. But the result is likely to be a piecemeal, disjointed system that overlooks possibilities for service integration and is an unsatisfactory experience for the user.

Skills for digitalization go beyond technology

In developing markets, where internet access and digital knowhow are often in short supply, any credible pathway to e-government must be based on skills. Government teams will need to know about cloud computing, artificial intelligence, machine learning, data security, and web 3.0 among other core digital capabilities.

Alongside technicians, effective digital government requires managers with experience in relevant policy areas (e.g., administrative law, privacy rules, data protection) and institutional change (e.g., strategy and planning, cultural transformation, risk management).

One proven route to a more joined-up approach is through data management. Data is the backbone of any digital project. Therefore, establish the policies and protocols for sharing information early, and a more coordinated system architecture will follow. This sharing reflects citizens’ own openness to the sharing of their data with other government departments if it leads to improvements in services.

An example here is the Brazilian city of Belo Horizonte. With technical support from EY teams, the city government developed a comprehensive data management system to determine the transport needs and mobility patterns of its citizens.

Using data insights, the city government has been able to develop a “smart” inter-modal public transportation system that can match supply to demand, particularly for low-income passengers, people with disabilities and other historically excluded groups.

Digital transformation pathways should also include a vision for joining up digital policy with public sector reform. Colombia is an example. When its government recently embarked on a US$250m program to digitalize its tax and customs authority, it tied it to a revamp of tax-collection processes.

Digital IDs are accelerators

Identification numbers are the gateway to government services. Without these, citizens are invisible to government agencies and at risk of missing out on the most basic services. In theory, digital IDs are revolutionary. Citizens in the 161 countries that use digital ID systems should be able to log on, submit their key personal details, and obtain a unique identification number. This number provides access to a range of different public services, cuts the time and money previously lost to bureaucracy, and can unlock a suite of cloud-stored personal documents, such as driving licenses, voter cards and education certificates.

The appetite for digital IDs is high among citizens in low-income countries. According to EY Connected Citizens research, 66% of adults in emerging markets would like a single digital ID that they use for every operation they carry out using public services. 

The robustness of digital ID systems will influence users’ level of confidence in them. In countries where citizens may not want to trust the authorities with their data, moving government services online could provoke anxiety. Therefore strict privacy and security protocols will be crucial, and these feature toward the top of the best-practice list promoted by the World Bank’s digital ID project, ID4D .

Countries rolling out digital ID systems in 2022 with the World Bank’s support include Morocco, Nigeria, Samoa and Togo. In total, the ID4D program is supporting similar projects in 35 countries, which could benefit 470 million people.

Implementing the world’s largest biometric ID program in India

India’s biometric identification system, which is the largest of its kind in the world, has been widely praised. Known as Aadhaar, the nationwide system gives each of the country’s 1.33 billion residents a unique 12-digit number. The scheme is voluntary, but most Indians have signed up since it was launched over a decade ago. 

Carriers of an Aadhaar number have access to as many as 300 central government services and up to 400 state-run schemes. The government has saved an estimated INR100b (US$1.27b) simply by paying state benefits directly to citizens, which has avoided considerable bureaucracy and opportunities for corruption.

The Aadhaar system has also spawned multiple innovations. For example, the digital storage facility DigiLocker. This app-based service enables citizens to upload their key documentation, which streamlines their interactions with government bodies as well as many fintech services and insurers. It now has more than 100 million users and holds more than five billion documents.

Rahul Rishi, EY India Consulting GPS Leader, says “The digital ID is just identifying that citizen, but what else can be offered to various groups or beneficiaries?”

Rishi gives the example of the Indian government’s Unified Mobile Application for New-age Governance (UMANG). The kind of super app seeks to democratize data across departments. The interface allows any citizen to download a single mobile application on their smartphone to discover and use the services that are available from local, state or federal governments.