E-Commerce in Africa is booming and it has been for a couple of years. There are hundreds of different e-commerce startups that are operational across the continent in different countries and these startups have the potential to create thousands of new jobs as the industry begins to grow even larger. These jobs will be related to online marketplaces, supporting services, courier services, etc.
The growth of the e-commerce industry in Africa can be a front for sustainable development on the continent. New markets and stores will be opened in isolated rural communities, allowing women entrepreneurs to actively take part in the e-business opportunities.
There is a lot of potential in the African e-commerce industry but as with any new improvement, there stands hurdles in the way. Some of the hurdles range from low consumer digital trust, poor infrastructure, and weak delivery logistics. But African Leaders and International Community can help the industry grow in the following ways:
1. Update Policies
The whole business environment is shaped by the policies that affect everyone from the prices to payment options to IP protection. Africa is lagging behind the rest of the world due to its policies. For instance, out of a total of 54 nations in the continent, only 20 have laws and rules for online consumer protection.
Imagine if all the countries adopt these rules and regulations, it would allow for a more conducive environment for e-commerce.
2. Internet Accessibility
Africa has a huge population but only a quarter of that population regularly uses the internet because the costs are high and not everyone can afford the prices.
African Governments, Businesses, and International Organizations should play their role and work to provide affordable internet access to the people of Africa especially since the Internet has become a basic commodity of life. Having the Internet accessible to most of the population would boost domestic e-commerce growth alone.
3. Improve Logistics
The courier and logistic services in Africa are poor as compared to Asia, Europe, or America. The African governments should work together and implement the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) to reduce the customs costs that are involved in the cross-border exchange. Implementation of the TFA alone would improve the logistics. It all depends on the individual government how much they are willing to help their economy grow.
4. Enable More E-Payment Options
Enabling different e-payments options can also help the e-commerce industry grow. Currently, the most popular option of payment in Africa is Cash on delivery and this makes cross-border e-commerce difficult. Due to the fact that vendors can’t send goods across the borders without getting the payment first and the customers can’t pay if there are minimal options available or no options available at all.
Also, the policies are not adapted to the complex payment supply chains which means that vendors have fewer options to connect their local e-payments systems with services used by global customers.
The policymakers and the governments need to work on adapting the policies that will help the e-commerce industry flourish and also improve local and global payment system interoperability.
5. Coaching Small Businesses
The majority of African Enterprises are small businesses and they need to be coached about digitalization because digitalization is the key to a sustainable and profitable future. Many tech services and platforms are helping different small enterprises in Africa in digitization but more work is still required to coach the entrepreneurs about what is happening around the world and getting them ready to attract investments.
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