Can Digital Transformation Unlock Billions in Growth Across the Middle East and North Africa?

A World Bank report covering 21 countries reveals that fragmented digital identity, payment and government systems are limiting economic growth, financial inclusion and public service delivery. Stronger digital integration, cybersecurity and inclusive policies could unlock billions in economic opportunities, improve government efficiency and expand access to financial services.

The World Bank Group, through its Digital and AI Vice Presidency, with support from the Digital Public Infrastructure and Services Umbrella Multi-Donor Trust Fund and the Digital Futures Partnership Trust Fund, has highlighted major gaps in digital transformation across the Middle East, North Africa, Afghanistan and Pakistan. Its report, Digital Public Infrastructure for Inclusive Growth, examines 21 countries and finds that despite growing investments in digital identification, electronic payments and online government services, disconnected systems continue to limit economic growth, financial inclusion and public service delivery. The findings suggest that building digital platforms is not enough unless governments connect them effectively and make them accessible to citizens and businesses.

Digital Growth Promises Billions, but Millions Remain Excluded

The report reveals that digital adoption remains uneven despite expanding internet connectivity and smartphone usage. In 2024, only 44% of adults in the Middle East and North Africa made or received digital payments, while financial account ownership stood at approximately 53%. Women were 12 percentage points less likely than men to use digital payments and 14 percentage points less likely to own financial accounts.

The economic opportunities are substantial. Mobile technologies contributed approximately $310 billion, equivalent to 5.5% of regional GDP, in 2023 and supported around 1.3 million jobs. Research cited in the assessment suggests that universal digital technology adoption could increase regional GDP per capita by 46%. However, these potential gains depend on better infrastructure, stronger institutions and wider access to digital services.

The report identifies significant differences between countries. Gulf economies, including Saudi Arabia, the United Arab Emirates and Bahrain, have developed advanced digital systems. Meanwhile, several middle-income economies face fragmented implementation, while conflict-affected countries struggle with weak institutions, limited connectivity and inadequate legal protections.

Digital Identity and Payment Systems Face Major Gaps

Digital identification remains a major challenge. Although all 21 countries have foundational identification systems, only ten have fully implemented digital identification capabilities supporting secure remote authentication. In Jordan, 60% of digital identity holders accessed government services online during the preceding three months, compared with 27% of non-holders. This demonstrates how effective identification systems can improve access to public services.

Electronic signatures face similar obstacles. All 21 countries legally recognize electronic signatures, but only 13 have advanced operational systems. Several countries lack the certification authorities and technical mechanisms needed to verify transactions securely. More than half still require handwritten signatures for certain legal, property and judicial transactions, increasing paperwork and delaying business activities.

Digital payment infrastructure also remains incomplete. Only 12 countries have introduced fast payment systems, leaving nine without this essential infrastructure. Digital payment usage reaches 76% in Saudi Arabia but stands at 36% in Egypt, 32% in Morocco, 24.6% in Pakistan and 13% in Algeria. Limited participation by fintech companies and mobile money providers further restricts financial access, particularly for small businesses and rural communities.

Disconnected Government Services Increase Costs and Delays

Government payment systems demonstrate the consequences of fragmented digital infrastructure. Approximately 21% of adults in the Middle East and North Africa receive government payments, including pensions, salaries and social assistance. However, many programmes operate through separate databases and payment arrangements, increasing administrative costs and making emergency assistance more difficult to deliver.

Connecting digital identification, social registries and payment platforms could improve beneficiary targeting, reduce duplication and strengthen transparency. Such integration would also help governments deliver financial support more quickly during economic shocks and humanitarian emergencies.

Public service delivery faces similar challenges. Seventeen countries have introduced unified government service portals, but only five have achieved the back-end integration necessary to provide comprehensive digital services. Many platforms still redirect users to separate government agencies instead of allowing complete online transactions.

The report highlights advanced initiatives in the UAE and Saudi Arabia, where interconnected platforms simplify government procedures and improve service accessibility. These examples demonstrate how integrated digital systems can reduce processing times, administrative expenses and repeated documentation requirements.

Small Businesses Could Benefit, but Stronger Policies Are Essential

The report identifies major opportunities for small and medium-sized enterprises. Digital payment histories, electronic invoices and verified business records could help companies demonstrate creditworthiness without depending entirely on traditional collateral. Better integration could expand access to loans, simplify business registration, reduce compliance costs and encourage informal businesses to enter formal markets.

However, cybersecurity weaknesses, inadequate data protection and limited institutional coordination threaten progress. Fourteen countries have data protection laws, leaving seven without comprehensive frameworks. Weak data-sharing arrangements also restrict the effective use of artificial intelligence in government services.

The World Bank recommends stronger national coordination, interoperable digital infrastructure, operational electronic signatures, wider fintech participation and improved cybersecurity safeguards. It also emphasizes the importance of including women, rural communities, refugees and other vulnerable populations in digital transformation strategies.

For governments, the priority is to ensure that technology investments produce measurable improvements in public services and economic participation. Development partners can support infrastructure and institutional reforms, while private businesses could benefit from expanded financial services and digital markets.

The region's digital future depends not simply on launching more platforms but on connecting existing systems, protecting users and making digital services accessible to everyone. These reforms could strengthen financial inclusion, improve government efficiency and create new opportunities for sustainable economic growth.