Digital platforms can play a significant role in promoting trade and commerce in Africa, says YouTube Europe, Middle East and Africa emerging markets MD Alex Okosi.
Digital trade can transform Africa’s economy and improve trade relations with the rest of the world; however, there is a need to develop comprehensive digital strategies and expand access to the Internet and digital infrastructure.
Africa is forecast to surpass 500-million ecommerce users by 2025, and while ecommerce penetration is forecast to reach 40%, digital trade currently accounts for only 1.5% of Africa’s total trade, compared with the global average of 15%, he said, citing data from the United Nations Conference on Trade and Development.
Further, speaking at the Africa Debate, held in London in May, he pointed to a significant digital divide within Africa, with only 43.1% of the population having access to the Internet, compared with the global average of 66.2%.
“This creates challenges as well as opportunities for businesses looking to engage in digital trade and for individuals seeking to benefit from the opportunities presented by the digital economy,” Okosi continued, noting that, to address the challenges, take advantage of the opportunities and promote digital trade in Africa, a comprehensive strategy is needed.
The strategy should include efforts to expand access to the Internet and digital infrastructure and initiatives to promote digital literacy and skills development, as well as promote inclusive and sustainable growth, while using the opportunities presented by the digital economy to drive economic development and improve the lives of people across the continent.
Further, collaboration and innovation will be required to create an enabling regulatory environment that supports digital trade, including measures to protect consumer rights and data privacy.
“Collaboration among governments, businesses and financial institutions is crucial in creating an enabling environment for digital trade. This includes developing regulatory frameworks, financing solutions and digital infrastructure,” Okosi added.
“This will help to build trust in digital transactions and ensure that businesses can operate effectively in the digital economy,” he said, speaking alongside a panel of experts on the importance of building a comprehensive digital trade strategy for Africa.
The Africa Debate led to discussions around the future of African trade and how the private sector can best support and prepare for a more integrated and competitive African trade environment.
With a focus on the African Continental Free Trade Area’s (AfCFTA’s) ecommerce protocol, the various panellists discussed the challenges and opportunities of building a comprehensive digital trade strategy, including the need for infrastructure development, regulatory frameworks and digital skills training.
Other panellists included Global Policy House CEO and founder and AfCFTA digital trade expert Michelle Chivunga; 4G Capital CEO Wayne Hennessy-Barrett; Twiga Foods CEO Peter Njonjo; Bank of Africa United Kingdom head of trade finance and commodity trade finance Toulay Oueslati; and Liquid Dataport CEO David Eurin.