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Stepping Up E-commerce, Digital Economy in Africa


By Eric Ojo, Abuja

The need to focus and act quickly on current efforts aimed at facilitating Africa’s positioning in the electronic commerce (E-commerce) business has been reiterated by experts and stakeholders in the sector.

Stakeholders and experts in the E-commerce and digital economy converged recently in Nairobi for the African E-commerce Week, an event organized for the first time in Africa by the United Nations Conference on Trade and Development (UNCTAD).

The theme of the week-long event, “Empowering African Economies in the Digital Era”, is a response to the growing demand for e-commerce dialogues, as the digital and mobile revolution continues apace.

It also came up at a time when the international community, regional organizations, and individual countries are exploring ways to advance development gains from the digital economy and thereby help achieve the ambition of the 2030 Agenda for Sustainable Development.

In spite of its 54 countries and 1.25 billion people, the African continent is currently trailing far behind the rest of the world in E-commerce due to several factors which include, lack of internet access, poverty, a high rate of illiteracy, and logistical inefficiencies among others.

Africa is however perceived as the next emerging market to make significant strides in online shopping. According to the Statista, a research firm, the E-commerce sector in Africa generated $16.5 billion in revenue in 2017 and forecasts revenue of $29 billion by 2022.

Moreover, things are looking up in mobile E-commerce market in Africa. Improved availability of Mobile devices, in combination with mobile-friendly payment systems, have opened up new shopping opportunities in places where physical stores often don’t exist, and infrastructure is lacking.

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At the High-Level Panel held on the sidelines of the African E-commerce Week which was facilitated by the African Performance Institute (API), a broad range of issues underpinning the development of sector were discussed extensively with recommendations proffered.

In his keynote address, President of African Performance Institute (API), Mr. Ibrahima Nour Eddine Diagne, harped on the challenge of making E-commerce a lever for creating value for African economies.

Mr. Diagne noted that that most of the barriers to E-commerce in Africa have been gradually contained over the past decade. He however pointed out that new challenges are emerging and threatening the development of the fledgling sector,
The major challenges currently confronting the sector, according to him, are essentially those linked to rapid technological advances, market concentration around digital giants, data and regulatory issues.

“In the face of this silent revolution, Africa would be at risk of further marginalization if it merely observed the transformations without anticipating them”, he warned
In order to facilitate Africa’s positioning in E-commerce he recommended the establishment of an E-commerce Academy by each country within the continent to strengthen skills.

He also suggested the establishment of an E-commerce Factory to concentrate all capacities, information and skills in a single place in order to support entrepreneurs but also to protect consumers.

He thanked the participants at the Dialogue, adding that efforts geared towards fostering E-commerce should be intensified and executed promptly due to the risks associated with the status quo.

Also in his submission at the meeting, the Executive Director of the International Trade Centre, Ms. Arancha Gonzales, said governments must focus on implementing ideas aimed at ensuring adequate regulation, promote entrepreneurship, foster public-private dialogue as well as promoting innovation.

“These are three main pillars, governments must focus on. It is indeed the 1st digital evolution and not the 4th industrial revolution that is taking place before our eyes”, she added.

Speaking in a similar vein, Senior Programme Officer in charge of Multilateral Trade at the Economic Community of West African State (ECOWAS) Commission, Mr. Kolawole Sofola called for a renewed emphasis on skills, intellectual property and investment in E-commerce support infrastructure in the continent.

In her contribution, Director of the World Customs Organization (WCO), Ms. Ana Hinojosa, highlighted the growing importance of cross-border electronic commerce and the challenges it poses for customs administrations, adding that it is imperative to ensure security, facilitation and revenue collection.

Ms. Hinojosa said the services component was not covered by the WCO’s work on electronic commerce, adding that not all countries had the same priority with regard to electronic commerce. She posited that training and awareness are of great importance in promoting risk-reducing behaviours.

Earlier in his opening remarks, the Senegalese Minister of Minister of Trade, Informal Sector, Consumer Affairs, Local Product Promotion and SMEs, Alioune Sarr, who chaired the Panel, described E-commerce as a national, regional, continental and global issue.

The Minister also drew attention to the cross-cutting nature of the issue, which therefore requires a concerted and consultative approach to addressing the manifold challenges in the sector.

Success in digital entrepreneurship, according to him, depends on three factors which include; talent, technology and capital. He shared with the audience the many efforts of the Senegalese government to support entrepreneurship in general and digital technology in particular.

He equally reviewed the regional dimension with the Continental Free Trade Area (ZLECA) and the availability of adequate funding mechanisms.

Other critical aspects of E-commerce that were alluded to by the participants are, the need to implement the agreement on trade facilitation, apply the rules on electronic transactions, ensure legal protection for consumers in a harmonised context, address data governance and ensure the availability of secure and efficient means of payment.

In his observation on the essence of the E-commerce meeting, the Secretary-General of UNCTAD, Mukhisa Kituyi said the landmark African Continental Free Trade Agreement (AfCFTA) signed in March 2018, is a major motivating factor.

Kituyi noted that since the AfCFTA expected to have a positive impact on intra-African trade, adding that as trade increasingly moves online, there is a growing need to discuss the implications of e-commerce for African economies.

“Turning this tremendous opportunity into inclusive development requires a massive effort on the part of all of us – in Africa and beyond. We are at critical juncture – and that is why UNCTAD decided to have a meeting in Africa, for Africa and by Africa, focused on harnessing the potential of digitalization and the mobile revolution”, he further explained.

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