Roadmap to inclusive e-commerce in Africa

The international community, governments, private sector and the civil society, have to pave the road for the inclusive digital commerce we want. file photo | nmg 

By MUKHISA KITUYI

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Summary

• We need to respond faster to the gaps and challenges that prevent people and small businesses from profiting from e-commerce.
• For instance, accessing the Internet is one of these issues.
• In Africa, nearly 75 per cent of the people do not use or have access to the Internet.
• And if you are a woman you are even less likely to have access.
• These gaps matter and we have to narrow them down.

Small is beautiful, small is powerful. This is the creed embedded in the foundation of a global e-commerce giant: Alibaba. But the creed does not only define the genesis of a company. It also reflects the power and scope of e-commerce around the globe.

This is what makes e-commerce so formidable: the possibility of turning a small firm into a global giant, bringing new, better and cheaper products to consumers and opening new markets to anybody with a good idea, the Internet and a computer — and this includes your mobile phone.

Today, you do not need to be big to be global. The Internet changed that forever. But we have to be smart to make sure we do not miss the opportunity e-commerce represents: both as an engine of growth and as a source of inclusiveness.

In 2015, the value of e-commerce worldwide was estimated as more than $25 trillion. This is more than the gross domestic product of the US in the same year. E-commerce is big business. But there are sharp differences on how countries use it and profit from it.

This contrast is nowhere more evident than in Africa, where way below five per cent of the population shops online. In Europe, it is as high as 60-80 per cent.

According to United Nations Conference on Trade and Development’s (UNCTAD) e-commerce index, Africa is trailing far behind in terms of readiness to engage in and benefit from e-commerce. The index is composed of four factors: Internet use, credit card penetration, postal reliability and the number of secure, encrypted Internet servers per capita. The average score for developed countries is 71, for Africa, it is 24. And even in comparison to other developing regions, Africa is at the bottom in all four areas.

On top of this, Africa’s inadequate regulatory framework is not conducive to foster trust online, which is an essential element of any well-functioning market. In fact, less than 40 per cent of African countries have established data protection and consumer protection laws.

As consumers and firms turn to the Internet to buy and sell goods and services, online presence becomes vital. And in a few years, if firms do not exist on the web, they will not exist at all.

In Africa, under the current circumstances, e-commerce can exacerbate exclusion rather than inclusion, putting African entrepreneurs at a disadvantage in the evolving digital economy. This is something we have to avoid.

We, the international community, governments, private sector and the civil society, have to pave the road for the inclusive digital commerce we want, where men and women, of all ages, can benefit from inclusive digital trade, or as we call it: eTrade for all. Building this road is not an easy task, and how we do it is as critical as the efforts we put into the endeavour. We have to do it faster, better, and together.

We need to respond faster to the gaps and challenges that prevent people and small businesses from profiting from e-commerce. For instance, accessing the Internet is one of these issues.

In Africa, nearly 75 per cent of the people do not use or have access to the Internet. And if you are a woman you are even less likely to have access. These gaps matter and we have to narrow them down.

In response, UNCTAD has created a Rapid e-Trade Readiness Assessment to help countries to quickly identify barriers to further e-commerce development.

Liberia is the first country in Africa that will undergo such an assessment and we expect many more states in the region to follow suit soon.

But responding faster is not enough. We also have to do it better. And this implies learning from the past to better seize the opportunities e-commerce presents. We have learned that trade creates winners, but also losers, and that left on its own, trade can widen disparities rather than close them.

This time we need to take policy measures that ensure e-commerce does not only benefit the big firms, but also the smaller ones.

In other words, we must enable a mother in Africa to sell her handmade baskets to a customer in Argentina. A farmer in the Philippines to sell its mangoes to the UK and any hard working man or woman to benefit from global trade.

And there is only one way we can undertake such an endeavour: together.

Today there are many organisations that assist in different areas of e-commerce to developing countries. But current efforts are simply inadequate. They are highly fragmented and insufficient in scale.

We can achieve much more together, and this was the genesis of the UNCTAD led eTrade for all initiative.