In order to plan for addressing the challenges and opportunities presented by digital trade and e-commerce, the AUC held two major e-commerce conferences in 2018 (Nairobi) and 2019 (Dakar). The main objective of these conferences was to provide a platform to enhance understanding of the current state of e-commerce in Africa, the challenges and opportunities building on the experience of actors on the ground as well as other regions of the world, and to discuss and prepare a roadmap for the development of an African E-commerce Strategy with a view to ensuring that African countries maximize the opportunities of e-commerce and the digital economy.
Toward a formal inclusion of e-commerce within the AfCFTA Framework
The recommendations from the first conference included the development of an e-commerce/digital strategy which would be built from a situational analysis of the state of the digital economy in Africa and the establishment of multi-stakeholder groups at member state level which focus on the development of national e-commerce strategies.
The second e-commerce conference took note of the progress to draft the DTS and recommended the need for a comprehensive capacity building programme for African policy and law makers, negotiators, private sector as well as other key stakeholders to equip and skill them for the development of policies and laws and the participation in negotiations on e-commerce.
The Digital Transformation Strategy for Africa (DTS), which was developed through a multidisciplinary process involving several AUC departments, was adopted during the 33rd AU Summit of AU Heads of State and Government in February 2020.
Also, through Assembly/AU/Dec.751 (XXXIII), the 33rd AU Summit of AU Heads of State and Government launched the AfCFTA Phase III Negotiations focusing on a Protocol on E-Commerce. Thus, e-commerce will become a specific aspect of the AfCFTA as soon as the E-Commerce Protocol is negotiated and concluded.
Once e-commerce is brought under the AfCFTA and the Protocol is implemented, it is likely to lead to reduced transaction costs, shorter customs clearance times and better supply chain management which offers firms the possibility of reaching new markets and new customers, enhanced productivity, increased inclusiveness, and greater consumer choice. From this perspective, e-commerce has the potential to boost exports in such a way that domestic enterprises are able to break into foreign markets to connect with international supply chains. This potential is said to be even greater for those African countries that are landlocked, or face other geographical constraints, such as Rwanda which is currently pitching itself as an ICT hub in East Africa.
A tool for boosting intra-African trade to achieve the objectives of Agenda 2063
The operational phase of the AfCFTA was launched on July 7, 2019 during the 12th Extraordinary Summit of AU Heads of State and Government. On that occasion, a number of operational instruments which have the potential to support e-commerce across the continent were also launched, including an online Non-Tariff Barriers Reporting, Monitoring and Elimination Mechanism; the Digital Payments and Settlement System and the African Trade Observatory Portal, which will provide real time information on export and import opportunities in the AfCFTA.
In the AfCFTA context therefore, this means that e-commerce has the potential to contribute towards increasing intra-African trade which currently stands at around 18% and therefore help realize the objectives of the Boosting Intra-African Trade Action Plan, and meet the objectives of Agenda 2063. It can also help boost Africa’s share of global trade, which is currently estimated at less than 3%.
To be continued…
Tribune (in 4 parts) by Beatrice CHAYTOR, Senior Expert – Trade in Services, African Union Commission.