- The project is billed to help African countries play catchup as the continent is still relatively behind when it comes to global consumer banking habits.
- The African Development Fund in partnership with Smart Africa Alliance will evaluate policy gaps in the digital trade and e-commerce ecosystems in selected countries that are lagging behind their counterparts in terms of digital trade and e-commerce adaptation.
- Data by the International Trade Administration (ITA) indicates that the continent is forecast to surpass half a billion e-commerce users by 2025.
The African Development Fund has partnered with Smart Africa Alliance to launch a $1.5 million project aimed at streamlining digital trade and e-commerce policies across 10 African countries.
In a project dubbed Institutional Support for Digital Payments and e-Commerce Policies for Cross-Border Trade (IDECT), the two institutions will evaluate policy gaps in the digital trade and e-commerce ecosystems in the selected countries that are lagging behind their counterparts in terms of digital trade and e-commerce adaptation.
The target countries include Côte d’Ivoire, Benin, Ghana, Liberia, Uganda, South Sudan, Zimbabwe, the Republic of Congo, São Tomé and Príncipe, and the Democratic Republic of Congo.
The agreement was signed on Tuesday, 25 April, a day ahead of the 2023 Transform Africa Summit which takes place in Victoria Falls, Zimbabwe, from 26-28 April.
African Development Bank Director-General for Southern Africa Region Leila Mokaddem, described the IDECT project as a pivotal step towards strengthening Africa’s digital trade and e-commerce landscape.
“This initiative will bolster the development of harmonized e-payment policies, capacity building, and gender-sensitive frameworks, ultimately fostering a digital trade ecosystem that generates employment opportunities across the continent,” she said.
The Statista Digital Market Outlook indicates that e-commerce penetration into Africa has grown from 13 percent in 2017 to 28 percent, an equivalent of 334 million users as of December 2021.
The growth is largely driven by an increase in mobile payment services, penetration of the internet across the continent, and the proliferation of cheap smartphones enabling millions of people to engage in online transactions.
Data by the International Trade Administration (ITA) indicates that the continent is forecast to surpass half a billion e-commerce users by 2025. According to UNCTAD, digital commerce could add $180 billion to the region’s Gross Domestic Product by in a period of two years. as mobile internet powers the adoption of virtual business.
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While there is a steady growth of e-commerce use across the continent, in terms of economy size and purchasing power, Nigeria, South Africa, Egypt and Kenya are leading on the pack across the continent of over 1.2 billion people.
The project by the African Development Fund and Smart Africa Alliance is aimed at bridging this gap by facilitating regional training and capacity-building programs focusing on cross-border e-payment and e-commerce for governments, private sectors, and Small and Medium Sized Enterprises (SMEs).
These programs are expected to reach 600 participants, with 60 percent being women and youth.
Additionally, a certified gender-sensitive e-learning training program addressing the unique challenges faced by women in digital trade and e-commerce, will be developed and disseminated to 2,500 participants, of whom 60 percent will be women.
Smart Africa Alliance Chief Executive Lacina Koné said that the IDECT project demonstrates the organisation’s commitment to fostering digital transformation and economic growth in Africa.
“By addressing policy gaps and promoting gender-sensitive training, we are laying the foundation for a thriving digital trade and e-commerce ecosystem,” he added.
The partnership will go a long way in helping these African countries play catch-up as the continent is still relatively behind when it comes to global consumer banking habits.
This has proven a challenge in growing e-commerce penetration in the region as almost half of the adults do not possess any formal bank account, preferring to pay in cash.
This makes online payments a perennial challenge for global online brands and market places looking to target e-commerce consumers in the African Markets.
The lack of multinational marketplace presence has also proven to be a key challenge, as local online marketplaces and online retailers that sell and ship regionally are favored by consumers across Africa’s ecommerce landscape.
Across the African continent, revenues for online sales of grocery and personal care products continue to grow and are forecast to continue steady growth through 2025.
Data by Statista reveals that fashion and electronics products create the highest sales revenues among online shoppers in African markets, with fashion products predicted to reach $13.4 billion in sales and electronics predicted to reach . (pragermetis.com) 2 billion in annual sales by 2025.
