Without such a shift, countries risk duplicating expensive systems, undermining state capacity and weakening digital transformation efforts, according to a new International Monetary Fund economic analysis.
For years, governments have invested billions in digital platforms such as identity systems, payment rails and data‑sharing tools. But unlike physical infrastructure, these platforms are often developed in isolation by individual departments, creating fragmented systems that cannot “connect” with one another. Analysts argue that this siloed approach makes it harder to share data, reduce administrative costs or build the foundations for a digital economy.
They say countries should instead see digital public infrastructure as they see roads or power grids: shared systems designed for repeated, nationwide use.
Digital public infrastructure can reshape entire economies. India’s Aadhaar biometric ID system, once used primarily for welfare payments, now reduces fraud, lowers compliance costs for banks and has enabled dramatic growth in mobile phone adoption. In Malawi, the introduction of biometric identification significantly improved credit markets by allowing lenders to verify borrowers securely, expanding financial access for underserved groups.
Yet many countries are failing to unlock such benefits. A global mapping initiative led by University College London has identified dozens of national ID programmes, digital payment systems and data‑exchange platforms, but few are widely used across government. In South Africa, eight national data‑exchange platforms operate independently rather than as an integrated system.
Digital fragmentation is eroding state capability, analysts warn. Citizens increasingly expect fast, seamless digital services, but disconnected systems make that difficult. Without integrated datasets, governments struggle to respond effectively to crises, manage tax systems, or roll out new programmes efficiently.
Finance ministries recognise the potential of shared digital infrastructure to reduce duplication, strengthen oversight and improve value for money. But traditional budget tools, such as cost‑benefit analysis, struggle to capture infrastructure‑wide impacts, prompting officials to argue that “there is no budget category for systems that benefit everyone but belong to no one”.
Analysts say finance ministries are uniquely positioned to drive digital infrastructure reform, given their authority over budgets and cross‑government coordination. But three obstacles persist: weak coordination between ministries, short‑term political pressures that discourage long‑term digital investment, and outdated appraisal methods that undervalue shared platforms.
They argue that digital infrastructure planning should be embedded in public investment frameworks and multiyear budgeting, allowing countries to build integrated systems capable of supporting economic growth, financial resilience and future innovation.
–IMF/ChannelAfrica–
