Building a comprehensive digital infrastructure is imperative to realising Africa’s enormous economic potential, according to a senior advisor from the International Trade Centre – the joint agency of the World Trade Organisation (WTO) and the United Nations.
“Making eCommerce a success on the African continent is challenging. Approximately, only 11% of platforms in Africa take electronic payments, and others deal in cash,” James Howe, Senior Advisor at the International Trade Centre, explained at the inaugural Egypt-International Cooperation Forum (Egypt-ICF) in Cairo, launched by the country’s Ministry of International Cooperation.
Howe added that through trust, the continent’s digital development will be accelerated. “The single biggest challenge is trust – a commodity in short supply. It is important to develop trust to address issues on the continent, and this will help facilitate an environment for eCommerce in Africa,” he elaborated at a workshop entitled ‘Africa Continental Free Trade Area (AfCFTA): Prospects and Challenges of Digital Trade for the Private Sector’ at the start of the second day of the Egypt-ICF.
During the workshop, H.E. Dr. Rania A. Al-Mashat, Egypt’s Minister of International Cooperation, emphasised the vital role of international cooperation within Africa: “the political will is present; the need of the hour is to improve the infrastructure and engagement at the national, regional and international levels.”
“While the development of roads and digital infrastructure cannot be overlooked, it is also important that we focus our energies on developing SMEs, and upskilling youth in Africa all while accelerating trade by boosting trade and infrastructure financing across the continent,” she said.
The workshop explored the pivotal role the African Continental Free Trade Area (AfCFTA) can play in enhancing the private sector from participation in digital trade. Moreover, it discussed the ways regulators and private sector partners plan to tackle the exchange of data, including across borders, amplifying concerns about use and misuse of data, privacy protection, digital security, intellectual property protection, regulatory reach, competition policy and industrial policy.
In his address, Eng. Hani Salem Sonbol, CEO of the International Islamic Trade Finance Corporation (ITFC), highlighted the role of partnerships in Africa’s growth. “We need to mobilise all resources – financial as well as human – to achieve our overall goals for the continent. At the same time, we need to see innovation and use of digital tools to help farmers improve their yield.”
“We are working closely with the Government of Egypt to make all commercial transfers using modern technology. Egypt has exerted exceptional efforts towards accelerating digital transformation,” added Sonbol.
Highlighting the need for a competitive landscape, Hon Ebrahim Patel, South African Minister of Trade, Industry and Competition, said: “It is essential that the competitiveness and dynamism of our markets are improved so that we are able to attract inward investments into our economies. Bold and ambitious steps need to be taken, and digital technologies will open up new avenues to boost the African economy.”
Elaborating on the need for digital trade, Hon. Dr. Zainab Shamsuna Ahmed, Minister of Finance, Budget and National Planning of Nigeria, stated: “The AfCFTA presents the best opportunity for Africa to take advantage of eCommerce and digital trade. We have seen the benefits of the digital economy in Nigeria, which is on an upswing.
Ahmed added that there is a huge opportunity to drive trade through the eCommerce and digital channels – not only within Nigeria but in the intra-African region. He shared that the country is working in partnership with different banks and agencies to develop the local agriculture value chain, which has a significant regional potential.
The AfCFTA is the world’s largest free trade agreement, encompassing 54 African nations with a market size of $3.4trillion and a population of 1.3 billion. The AfCFTA is a platform for consolidating eCommerce rules and regulations across the continent, and its ultimate objective is to establish Africa’s own integrated digital market. The World Bank estimates that the agreement – coupled with necessary reforms – has the potential to lift 30 million people out of poverty.
Dr. Sidi Ould Tah, Director General of the Arab Bank for Economic Development in Africa (BADEA), said: “The micro, small and medium-sized enterprises (MSMEs) need support from all stakeholders – and they form one of the four main pillars of the BADEA strategy. Our vision is holistic, and we believe all stakeholders should work hand in hand for overall development.”
Steve Lutes, Vice President of Middle East Affairs at the US Chamber of Commerce, also presented an overview of the Chamber’s efforts to support trade on the African continent.
“We are fully committed to creating opportunities for economic reforms and being an advocate for Africa. With the acceleration of digital transformation, it is time to engage African governments on digital policies and build on cross-border trade.”
Jamie MacLeod, Trade Policy Fellow at the Africa Trade Policy Center (ATPC) at the UN Economic Commission for Africa (ECA), said the African continent has a lot of potential that is yet to be unlocked. “While the digital transformation has accelerated in some parts of Africa, particularly during the pandemic, it has also exposed the building blocks in some other parts,” elaborating that embracing innovation would drive both value and investments.
Aymen Kasem, Division Manager – Trade Development at the International Islamic Trade Finance Corporation (ITFC), said: “The AfCFTA is a game changer for Africa. The continent’s digital trade is a challenge that should be tackled in an integrated manner.”
Dr. Ahmad Mukhtar, Senior Economist at the Food and Agriculture Organisation of the United Nations (FAO) Regional Office for Near East and North Africa, said: “While all the calls for digital platforms are good, it is essential to have a complementary regulatory infrastructure – from Cairo to Cape Town.”
The harmonisation and complementarity of ambitions across the continent will support the acceleration of its development.
Summing it up, Ahmed Rezk from the United Nations Industrial Development Organisation (UNIDO) Regional Hub Office in Egypt, said: “It is vital to have the perfect mix of policies to foster the use of technology, skills development and building future industrial competencies – including advanced technology – to create a win-win situation for everyone in Africa.”