SYPALA: Selorm Branttie calls for greater focus on informal sector in Africa’s digital transformation

‎By: Godbless Asaana‎
‎Ghanaian ICT business strategist, technologist and policy activist Selorm Branttie has called for a rethink of how Ghana’s digital economy is structured, arguing that the country must find ways to ensure that value generated through technology, data and digital platforms benefits local businesses and workers.
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‎Speaking at the Students and Young Professionals African Liberty Academy (SYPALA), on Wednesday August 26, where he led a discussion on “Africa’s Digital Transformation: Artificial Intelligence, Financial Technology and Digital Public Infrastructure: What Do These Mean for the Unemployed, Hungry and the Informal Worker?”

Branttie said the growing use of artificial intelligence (AI) and digital platforms was creating valuable patterns from people’s everyday activities, but much of the economic value generated from those activities was being captured by technology companies outside Africa.
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‎“The world is building patterns out of our activity. So now, if we want to plug ourselves in the structure, then we need to understand how AI is handling a lot of these interactions that we do.”
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‎He said professionals across different fields could use their expertise to identify opportunities created by AI and emerging technologies.
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‎“How do I benefit? Or how do I plug myself in this space so that in the interim, while others are looking at current patterns, I can also begin to look into these patterns and build them?” he asked.
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‎According to him, understanding where value is created and captured is particularly important because major digital platforms used by Ghanaians are largely controlled by companies headquartered outside the country.
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‎“The businesses that we or the potential that we offer those global systems are small,” he said, pointing to Ghana’s relatively small population and income levels compared with larger global markets.
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‎He, however, argued that Ghana’s formal financial system was still failing to adequately understand and serve the informal sector, despite the sector accounting for a significant portion of economic activity.
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‎Branttie illustrated the problem with the example of an informal-sector entrepreneur who has operated a successful business for years but lacks the formal documentation required by banks to access loan.
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‎He contrasted such an entrepreneur with a salaried bank employee who earns a regular monthly income and is therefore considered a safer borrower by conventional lending institutions.
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‎“What does this tell you about our system? It tells us that even though the informal sector is all around us… the formal sector is refusing to understand the informal sector, in which we are all growing up in and trying to find our space,” he said.
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‎He said this situation makes it difficult for informal sector businesses to obtain the capital they need to expand, create jobs and increase their contribution to the economy.
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‎“The biggest issue for most of you right now, in the informal sector, if you want to create value, you do not have access to capital.”
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‎He noted that such financing could allow an informal entrepreneur to expand operations, create employment and potentially repay a loan faster than a salaried worker whose employment could be affected by restructuring or job losses.
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‎Branttie also criticised lending arrangements that require individuals with savings to use those same savings as collateral before receiving loans.