Young people in Africa could unlock the benefits of the Africa Continental Free Trade Area (AfCFTA) through e-commerce, which accounts for global online sales worth $26 million. The trading bloc comes into force in January 2021.
However, even as e-commerce is touted as the panacea for growth of trade in Africa, countries are being warned about the sector’s legal hurdles.
When well utilised, technology and online market places can drive inclusive growth across Africa, with e-commerce likely to create as many as three million jobs by 2025. This is according to a recent virtual meeting on Trade Beyond Covid-19: Unpacking the AfCFTA for East Africa.
The meeting, hosted by the International Trade Centre (ITC) — the joint agency of the World Trade Organisation and the United Nations — was attended by government officials and other private business partners from around Africa. ITC executive director Pamela Coke-Hamilton said there is a need for African countries to incorporate technology in their trading programmes and should learn from regional blocs such as the East African Community (EAC), the Southern African Development Community (SADC), the Economic Community of West African States (Ecowas).
She said the opportunities and challenges of e-commerce in Africa interplay with other policy issues and called on AfCFTA members to do away with obstacles in the digital space by having synchronised regulatory approaches to check the fracturing of countries by multinational technology companies.
She said ditching outmoded business models for e-commerce will drive intra-regional trade to new business markets and fasttrack the implementation of the AfCFTA.
E-commerce can lower entry barriers and help connect MSMEs with global markets and value chains. However, UNCTAD Secretary-General Mukhisa Kituyi, warned of dangers associated with e-commerce.
"While digital trade offers an innovative tool for industrial leapfrogging and income convergence, some African countries lack the legal framework and enabling environment for digital trade to thrive under the AfCFTA. Many African countries still grapple with a lack of adequate and affordable connectivity and thorny issues such as cybercrime and data privacy," he said.
Citing experiences from the European Single Market, EU ambassador to Kenya, Simon Mordue said that SMEs can benefit greatly from a larger common market and with time will prove to become the continental engine of economic prosperity and positively impact millions of residents.
The implementation of the AfCFTA in Eastern Africa could result in welfare gains of $1.8 billion, a boost to intra-African exports worth more than $1.1 billion and the creation of more than two million new jobs, according to the UN Economic Commission for Africa and TradeMark East Africa.
ITC runs One Trade Africa, a programme for MSMEs, especially women and youth-owned, that trains on accessing AfCFTA trade opportunities.