How Should Africa Engage in E-Commerce and the Digital Economy?

14 March 2018

The growth and diffusion of the Internet and digital technologies are profoundly transforming the global economy in a variety of ways. One of its most visible manifestations is the rapid expansion of e-commerce. According to estimates published by the website eMarketer, e-commerce retail sales are expected to reach US$4 trillion in 2020, or about 15 percent of expected total retail sales worldwide for that year. Although e-commerce is only one facet of the digital revolution, those numbers offer a telling glimpse into the scale of change that lies ahead.

While the economic potential associated with e-commerce and the digital economy is undoubtedly significant, not all countries are on an equal footing when it comes to capitalising on such opportunities. To date, the main business actors that have succeeded in leveraging digital trade and reaping its benefits are largely concentrated in developed and a few emerging economies. In many developing countries, in Africa in particular, important structural constraints – starting with the challenge of basic Internet access provision – continue to severely impede the emergence of an enabling environment to take advantage of digitalisation.

Recognising the need for international trade rules to keep pace with the evolution of global economic activity, policymakers and trade negotiators have shown growing interest in developing agreed frameworks for e-commerce and digital trade, with a number of free trade agreements including digital-related provisions . At the WTO, the last ministerial conference saw a group of 70 members agree in a joint statement to “initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce.” So far, the only African country to have joined this initiative is Nigeria. The African Group released a statement on e-commerce ahead of the ministerial, in which it argued that developing new rules on e-commerce would be “entirely premature.”

In this context, how can African countries create the conditions for improved digitalisation on the continent? Are there reasons to be concerned about new trade rules in the area of e-commerce? If so, what strategy should African policymakers and negotiators adopt?

This issue opens with an exclusive interview with Senegalese Trade Minister Alioune Sarr, in which he reflects on the national and regional priorities for the development of e-commerce. The interview is complemented by three pieces. In the first article, Jamie MacLeod analyses the risks and opportunities associated with digital trade in Africa, and presents a number of important implications in terms of national and international governance. Maxime Weigert, for his part, looks at the challenges hindering the development of African e-commerce, as well as the strategies adopted by the private sector. Finally, Christopher Foster and Shamel Azmeh discuss recent trends towards regulating broader aspects of digital technologies and data flows through international trade rules, and reflect on the stakes involved for African countries.

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14 March 2018
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