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Public-Sector Digitization Posses Trillion-Dollar Challenge- McKinsey
The full benefits of digitization could be huge, but to realize them, McKinsey Insights show that governments need to tackle the factors that make many e-government efforts fall short of their promise.
In the report, Cem Dilmegani, consultant in McKinsey’s Istanbul office, where Bengi Korkmaz is a principal and Martin Lundqvist, principal in the Stockholm office, wrote that, citizens and businesses now expect government information to be readily available online, easy to find and understand, and at low or no cost.
McKinsey is a global firm, comprising more than 9,000 consultants and nearly 2,000 research and information professionals. It has office more than 60 countries, including Nigeria.
According to McKinsey, governments have many reasons to meet these expectations by investing in a comprehensive public-sector digital transformation.
The analysis suggests that capturing the full potential of government digitization could free up to $1 trillion annually in economic value worldwide, through improved cost and operational performance.
Shared services, greater collaboration and integration, improved fraud management, and productivity enhancements enable system-wide efficiencies. At a time of increasing budgetary pressures, governments at national, regional, and local levels cannot afford to miss out on those savings.
Dilmegani, Korkmaz and Lundqvist, wrote, “Indeed, governments around the world are doing their best to meet citizen demand and capture benefits. More than 130 countries have online services. For example, Estonia’s 1.3 million residents can use electronic identification cards to vote, pay taxes, and access more than 160 services online, from unemployment benefits to property registration. Turkey’s Social Aid Information System has consolidated multiple government data sources into one system to provide citizens with better access and faster decisions on its various aid programs. The United Kingdom’s gov.uk site serves as a one-stop information hub for all government departments.
“Such online services also provide greater access for rural populations, improve quality of life for those with physical infirmities, and offer options for those whose work and lifestyle demands don’t conform to typical daytime office hours”.
The trio, however, asserted that, despite all the progress made, most governments are far from capturing the full benefits of digitization.
“To do so, they need to take their digital transformations deeper, beyond the provision of online services through e-government portals, into the broader business of government itself. That means looking for opportunities to improve productivity, collaboration, scale, process efficiency, and innovation,” the report showed.
The public-sector challenge, they listed include that digital transformations require changes, to both processes and IT systems, that are more challenging to implement in the public sector than in the private sector.
Also, joint study by McKinsey and Oxford University found that “public-sector IT projects requiring business change were six times more likely to experience cost overruns and 20 percent more likely to run over schedule than such projects in the private sector”.
The public sector must cope with additional management issues, including multiple agencies, a range of organizational mandates and constituencies, longer appropriations timelines, and the challenge of maintaining strategic continuity even as political administrations change.
“Therefore, it is important that private-sector companies supporting public IT transformations understand that the public sector operates in a different context. For example, it can be challenging to set a specific target, build consensus, align on a leadership structure, secure funding, and meet implementation timelines.
“Similarly, when systems and data are owned by different departments and functions, on a range of platforms and with differing taxonomies and access requirements, it can be difficult to invest at scale and generate sufficient economies. Silos, fragmentation, and the absence of a central owner for nationwide IT infrastructure and common components can make it hard to connect the internal “plumbing” to create a seamless experience for the end user, be it a government worker, a business user, an average citizen, or another intergovernmental office. It doesn’t make the task easier when the complexity of large-scale digital projects requires specialized skills and expertise that come at a high price and are often in short supply. In consequence, many e-government efforts fall short of their promise”.
Achieving comprehensive public digitization, McKinsey believes that while digital transformation in the public sector is particularly challenging, a number of successful government initiatives show that by translating private-sector best practices into the public context it is possible to achieve broader and deeper public-sector digitization.
Tony Elumelu, chairman, United Bank for Africa (UBA) and Heirs Holdings, has called on Africa to avow itself in the fast-evolving global technology landscape, calling for deeper partnerships, infrastructure investments, and recognition of the continent’s digital potential.
Tony Elumelu, chairman, United Bank for Africa (UBA) and Heirs Holdings,
Elumelu, who made this statement in a series of posts on his verified X handle over the weekend, questioned the continent’s current role in global tech innovation and value creation, noting that while technology is transforming the world, Africa risks being sidelined without urgent strategic action.
“We know technology is transforming our world, and the pace of transformation is accelerating. Where is Africa? Are we in the conversation, or are we being left behind?” Elumelu asked.
Citing Africa’s youthful, entrepreneurial, and digitally native population, Elumelu stressed the need for stronger global partnerships that empower African startups and tech developers to not only serve local markets but compete globally.
“Young Africans are digitally native, entrepreneurial, and hungry to build. What we need are more opportunities for partnership, more belief in our potential, and platforms to amplify our voices.
“Africa has led in digital banking and payments. Our value chains are ripe for transformation. Yet we need more investment, more platforms, and more belief in our potential.
“We know that many of the minerals that are techs’ foundation are found in Africa. But is Africa getting the benefit? Africa needs to capture the moment – ensure we have digital sovereignty – that African priorities are understood and met”
The UBA Chairman revealed that he attended an exclusive dinner with French President Emmanuel Macron and global technology executives at the Élysée Palace in Paris, where he sought to amplify Africa’s voice at the highest level of innovation discourse.
“I had enriching conversations with global tech CEOs, including the CEO of NVIDIA, Jensen Huang, on how innovation can and must solve humanity’s most urgent challenges—including those facing Africa,” he said.
Elumelu used the opportunity to advocate for the continent as the next frontier of global tech investment, calling attention to Africa’s unique demographics and the imperative for inclusive innovation.
Speaking further he said through his investment company, Heirs Holdings, remains committed to Africa’s digital transformation, actively backing tech ventures such as Heirs Technologies and Redtech Limited, which are building solutions tailored for the African market while competing on a global scale.
National Space Research and Development Agency (NASRDA) has called on African businesses to seize the opportunities emerging within the rapidly growing global space economy, which is projected to reach one trillion dollars annually by 2030.
The appeal was made by Dr Matthew Adepoju, director-general, NASRDA, during a press briefing at the weekend in advance of the second Africa Space Economy Conference and Exhibition (ASEC 2025), scheduled to take place in Abuja from 17 to 19 June.
The event, organised in collaboration with the Abuja Chamber of Commerce and Industry (ACCI), will focus on the theme “Space Economy and Emerging Markets in Africa”.
Dr Adepoju highlighted that the global space economy is on the verge of surpassing $500 billion per year, making it the fastest-growing economic sector worldwide.
He stressed that Africa must position itself at the forefront of innovation, science, and technology by investing in space-related ventures.
“This is the Fourth Industrial Revolution and Africa must not be left behind.
“It is time for us to take our rightful place at the forefront of global innovation, science and technology, with space technology being the pinnacle of human endeavour.
“The space economy is the fastest growing economic sector in the world and it is projected to hit one trillion dollars per annum. Currently it’s more than 500 billion dollars annually,” he said.
The conference aims to foster collaboration between industry leaders, academic institutions, and research organisations, all working to strengthen Nigeria’s space ecosystem.
Dr Adepoju praised President Bola Tinubu for his forward-thinking economic initiatives, noting the President’s directive to transform NASRDA into a revenue-generating body.
NASRDA, he said, is now committed to fully commercialising and industrialising space research. The upcoming conference is expected to attract international participants, with confirmed interest from countries such as China, the United States, and several European and African nations.
The agency is also preparing for the launch of four new satellites—three optical and one Synthetic Aperture Radar (SAR).
These satellites are intended to support national security, environmental monitoring, and economic surveillance, particularly in sectors such as the blue economy and oil and gas.
Dr Adepoju encouraged private sector involvement in areas including satellite technology, data services, rocketry, and space-based applications.
He stressed that with Nigeria being Africa’s most populous country, there is already a significant market for space-related products and services, and now is the time for African businesses to build capacity, invest locally, and retain economic value.
Speaking on behalf of Chief Emeka Obegolu, ACCI President, Mr Agabaidu Jideani, chamber’s director-general, noted that Africa has yet to fully tap into the space economy’s potential.
He pointed out challenges such as limited public awareness, infrastructure gaps, and evolving policy environments, but said these issues also present opportunities for innovation and investment.
“It was with this foresight that ACCI, through our Policy Advocacy Centre, in a strategic partnership with NASRDA, conceptualised the ASEC,” he said.
Dr Haruna Mohammed, co-chairman of the Conference Organising Committee, reiterated that the event is aimed at the private sector and will showcase how space-based technologies can aid in economic diversification, enhance infrastructure, and promote sustainable development across the continent.
Schneider Electric’s newly launched innovation hub is set to benefit not just large corporations, but also local communities, start-ups and learners from technical, vocational education and training (TVET) colleges.
This is according to Canninah Dladla, Schneider’s first female cluster president for English-speaking Africa, speaking at the launch of the hub over the weekend at the company’s headquarters in Midrand.
The hub builds on Schneider Electric’s global strategy to bring its technology closer to its customers on the African continent, while reinforcing its leadership in sustainability, innovation and digitisation, according to the company.
This African hub is part of Schneider Electric’s global network of over 40 registered innovation hubs, and provides an interactive environment where visitors can explore the company’s integrated solutions across key segments, including energy solutions, industrial automation, building solutions as well as power and grid solutions.
“We are building an ecosystem that thrives on collaboration, innovation and relevance to the African context; one that values local talent, fosters local partnerships and drives local solutions. The innovation hub enables us to create a truly dynamic experience that embodies Schneider Electric’s purpose: enabling all to maximise energy and resources while bridging progress and sustainability,” said Dladla.
“Indeed, Africa holds immense potential, and this hub is designed to help our customers and partners unlock it through digitalisation, innovation and collaboration.”
During the event, Dladla highlighted the company’s commitment to Africa’s energy future, emphasising the need for innovative solutions to address energy challenges on the continent.
“There is more to this building launch; it is unveiling our commitment to Africa’s energy for the future. Everybody, including local media, talks about Africa’s energy issues and problems. But maybe it’s about time we stopped talking about issues and problems and come with solutions.”
Walid Sheta, president of the Middle East and Africa at Schneider Electric, said the hub is made for all Schneider’s partners, colleagues and customers, adding that everyone is invited to visit and learn how the technology drives sustainability and efficiency.
“We believe our software solutions and digital offerings will shape the future for our customers. With technology like AI and sensors, we can detect issues like leaks in pipelines or equipment failures before they happen.
“This helps prevent losses, reduce emissions and keep production running smoothly. It’s already being used in various industries, like refineries, power plants and even buildings, to optimise performance and predict potential problems,” he said.
Speaking at the launch, Dr Anna Mokgokong, Schneider Electric South Africa chairperson, stressed the need for businesses to adapt and innovate in today’s fast-changing landscape. She highlighted the significance of the agriculture sector, acknowledging its challenges, and pointed out that Schneider’s automation solutions could address the sector’s challenges
Mokgokong, who also serves as a chancellor at the North-West University, said there is a need to integrate innovation in academic institutions.
“We should focus on equipping students with in-demand skills, allowing them to gain practical experience and build connections with companies like Schneider through vacation work. This way, by the time they graduate, they’ll have a competitive edge and be more likely to secure employment. It’s time for our universities and colleges to shift mindsets and prioritise quality education that meets industry needs.”
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