By Matthew Baker, 17 March 2006

Electronic means of payment, otherwise known as e-payment, though practiced in some countries such as South Africa, Tunisia and Egypt faces uphill challenges in Africa.

This is one of the main conclusions of the three-day forum on ICTs, trade and economic growth held from 14-16 March 2006 here in Addis Ababa.

The Department of Mathematics and Computer Science of the Addis Ababa University, in collaboration with ECA, shared the results of a survey on existing status of e-payment in the World, Africa in general and in Ethiopia in particular.

Challenges for e-payment in Africa included lack of inadequate telecommunication infrastructure because of the rural divide which exists in Africa.

Noted problems related to infrastructure include frequent connectivity failure in telephone lines; low bandwidth for Internet, high cost of Internet, availability of Internet, which especially at peak hours is low, unavailability of dedicated data service networks and closed financial networks including frequent power interruption.

However, it was also revealed that banks in Africa were slow on the uptake of automation, and many are not networked though some efforts are underway particularly among the private banks.

"To a large extent Africa and many African countries remain a cash-based society and using credit cards is not an option which hampers the growth of e-commerce", according to Dr Dawit Bekele, Addis Ababa University. Consequently, the absence of proper legal and regulatory frameworks in many African countries and the low level of credit card access are a clear indication of the main challenges of e-payment in Africa.

Dr. Bekele proposed a vision for "establishing a secure, affordable and open e-payment system for Ethiopia before the end of the Ethiopian Millennium". He also stated that "most African countries are lagging behind in e-commerce, and if Africans can’t do e-commerce within their country, it is very unlikely that they can deal with the rest of the world, and this could have catastrophic effects on Africa's economy as 'globalization is inevitable'".

The forum however recognised the advantages of e-payment, including increasing efficiency - in that every e-payment can reduce costs, among other things.

Participants called on ECA to document and disseminate best practices in ICT, trade and economic growth in Africa and organise a special workshop focusing on e-payment in Africa to develop prototypes and models that African countries can use.

This came about as a result of DISD's Internship programme for Addis Ababa University students who have developed a prototype e-payment application for Ethiopia, which was demonstrated at the Forum. In addition, there are plans to implement the prototype as a pilot project under the DISD/ECA-AAU VarsityNet programme.