Regarded as a digital “tiger” in Europe, Estonia is stepping up its digital cooperation with the African continent. In this interview for “Forbes Africa”1, Karin Maasel, Head of the Africa and Emerging Markets Department at the Estonian Centre for International Development (ESTDEV), discusses the key principles of this partnership.
Forbes Africa: Your country, Estonia, is considered being one of the pioneers of the digital age, with almost all public services available online. What economic benefit does your country gain from this digital transformation?
Karin Maasel: “Digital” has become a public good in Estonia. The e-government infrastructure saves us about 2% of the gross domestic product (GDP) and as much as 1400 years working time per year. This frees up funds to invest in other sectors crucial to economic growth, such as education and health. What also continues to benefit our economy is the business-friendly environment the digital ecosystem has created. In 2014, Estonia launched its e-residency program, which enables anyone, regardless of their citizenship or location, become an e-resident of Estonia, giving them access to Estonia’s numerous digital services. In 2021, the program acquired 12,000 new e-residents, which is comparable to the number of babies born during the same period in the country, generating 32 million euros in tax revenue. A considerable sum for a nation of only 1.3 million people.
FA: The Estonian Ministry of Foreign Affairs presented in 2021 its regional strategy for Africa for the period 2020-2030. Cooperation with the African continent in the digital field will be an important part of this. What can your country offer African states in relation to this?
KM: Estonia’s first regional strategy for Africa is a significant step forward in emphasizing the importance of African countries as key partners in foreign policy, economic relations and development cooperation. Estonia’s financial resources and manpower are not comparable to those of the larger donors, so it therefore makes sense for us to partner with African countries in areas where we ourselves have significant experience and added value. For economic relations and development cooperation alike, digital transformation, education innovation and start-up ecosystem development are therefore key priorities. ESTDEV-s role here is to bring on board Estonian and African partners and put these priorities into action.
In terms of what we can bring to the continent- needless to say, the contexts between Estonia and countries within Africa are very different. There is no pre-packaged solution to digital transformation. Every country is unique and the solutions need to be adapted. This is what Estonia supports many partners in Africa with today – from initial feasibility assessments and digital strategy development, designing and building the technologies, to supporting the implementation of these technologies.
“There is no pre-packaged solution to digital transformation.
Every country is unique and the solutions need to be adapted.”
– Karin Maasel
FA: Has the war in Ukraine influenced the intentions set out in this strategy?
KM: Keeping the African continent on our foreign policy agenda requires continuous policy advocacy. This was the case before the conflict in Ukraine and it continues to be the case today. I see a great role here for ESTDEV in ensuring that African challenges and opportunities remain on the foreign policy agenda, even in the face of a very real security threat in our immediate neighbourhood. In this sense, I see no major change in priorities and certainly no change in the ambition with which we plan to engage with Africa in the future.
FA: Is innovation an element that could further economic cooperation between Estonia and Africa?
KM: Absolutely. Estonia got its 10th unicorn (companies valued at more than one billion dollars) this year, making it the country with the highest ratio of unicorns per capita in Europe. Advanced digital capabilities and a business-friendly environment have been key factors for achieving this. Several start-ups and unicorns have a large consumer base in Africa and have even localised their services to meet local needs.
FA: Can you give us examples of Estonian unicorns active on the continent?
KM: Several companies could be mentioned. Bolt (the ride-hailing platform) is a good example of economic cooperation between Estonia and Africa countries. From Tallinn, Bolt conducts almost half of its activities on the African continent. It currently has more than 40 million customers in seven countries, providing income and entrepreneurial opportunities for more than 700,000 drivers across the continent.
FA: What obstacles still hinder cooperation between your country and the continent?
KM: In terms of challenges on the Estonian side, it is certainly about finding the best possible model of cooperation with our partner countries in Africa. As a small country, we will never have the capacity to integrate large teams of experts to be placed locally in Africa on a full-time basis. For Estonia, localisation is not just a way of doing things, it is the only way. Therefore, local ownership can either be a real driving force or its absence a very serious bottleneck. We are essentially exporting an experience that not only promotes anti-corruption and transparency, but also puts in place the vary technologies required to achieve these. The question is whether there is enough political momentum in African countries to make this goal a reality.
Estonian Centre for International Development is a government foundation that manages and implements Estonia’s participation in international development cooperation and humanitarian aid projects, with the aim of increasing Estonia’s contribution to global security and sustainable development.