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New ECA and GSMA report urges an overhaul of mobile services to boost e-commerce in Central Africa

14 December, 2020
New ECA and GSMA report urges an overhaul of mobile services to boost e-commerce in Central Africa

Yaounde, 14 December 2020 (ECA) –A new report by the UN Economic Commission for Africa (ECA) and the Global System for Mobile Communications Association (GSMA) has outlined practical measures that Governments and key stakeholders in the mobile telephony sector can adopt to boost the subregion’s sustainable development through electronic commerce.

The report titled The Role of mobile services in Enabling E-commerce in Central Africa and policy implications” was reviewed in an online meeting today by experts from government, the private sector, academia, the development community and civil society from Africa and Europe, Monday.

It encourages Central African States to overhaul their overall business environment in order to facilitate transactions in the sector which can bring about socially inclusive economic growth.

Impediments to be fixed through a more enabling environment include physical logistics challenges such as inadequate street addressing and mail-delivery systems.

There are also systemic challenges such as red tape with regards to starting an e-commerce business; convoluted tax regimes; customs clearances inefficiencies; limited interoperability of payment systems as well as their integration with mobile services.

Access and cost related drawbacks comprise high pricing of and unreliable mobile internet connectivity;   low credit and debit card penetration and the high restriction of their use by commercial banks, high cost of smart phones and related services, low levels of digital skills across the population and limited  access to e-banking and e-commerce solutions.

In spite of these challenges, the report notes, the Central African subregion has registered much progress in the development and use of mobile solutions which drive e-commerce. 

For instance, mobile subscriber penetration in the ECCAS sub-region has gone from just 18% at the start of the last decade to 42% (that is a total of 42 million people) by the end of 2019, and is set to reach 46% by 2025. 

This penetration rate is projected to double by 2025 when about 90 million persons in the subregion would be mobile-internet connected, opening up a vista for the rise in social and e-commerce chiefly through an interplay between social media platforms especially Facebook (which had 11.4 million active users from the ECCAS subregion by January 2020) and the use of mobile money.

Through such interplays, 48 million registered accounts carried out 1.8 billion transactions across the 17 mobile money platforms in the subregion in 2019. These transactions totalled US$ 30.4 billion – the equivalent of circa 16 trillion CFA francs.

The subregion therefore trailed East Africa which recorded mobile money transactions worth US$293.4 billion and West Africa which pulled off US$130 billion worth of mobile money deals.  But it was far ahead of Southern Africa which accounted for just US$2.5 billion worth of mobile money operations).

These figures would expand exponentially and generate benefits across economic sectors if the teething problems identified hitherto, are holistically addressed by governments, the private sector – especially mobile telephony companies, working in synergy as advised by the report.

Firstly, it calls for governments to enhance digital and financial inclusion by formulating and implementing policies that strengthen mobile infrastructure and affordability of mobile services, such as reducing or optimizing sector-specific taxes, making telecommunications spectrum more available and affordable to companies and overseeing the improvement of local and global payment systems interoperability side by side mobile and banking service operators.

Governments are also called upon to enact data protection laws that provide effective protection for individuals in order to boost peoples’ overall confidence in e-commerce and other digital services.

To fix glitches in the overall business climate, States are counselled to create an atmosphere of certainty for businesses and avoid politically induced internet shutdowns. They are further called upon to implement all clauses in the protocols establishing the African Continental Free Trade Area (AfCFTA) such as streamlining customs clearance procedures including: one border post agreements (which unify any two countries’ customs systems and processes) and e-submission gateways for customs clearance.  Still in this equation, the report notes, governments should provide fiscal incentives for small businesses and e-commerce start-ups, rather treat them in the same way as established businesses.

To make stakeholder collaboration work, the various actors (governments, mobile operators, the development community, private sector players and civil society) are requested to deepen collaboration to: tackle digital exclusion, increase consumer awareness and trust for digital services, beef-up the security of e-transactions, collectively develop the hard and soft infrastructure for mobile penetration and ecommerce, and bridge the skills and funding shortages for e-commerce businesses in the subregion.

 “This report is very important because it lays bare the critical advantages of functional mobile an e-commerce ecosystem for sustainable development in our subregion especially in the context of building forward better from the scourges of COVID-19,” said Antonio Pedro, Director ECA's Central Africa Office.

“Because of mobile technology, we are increasingly moving toward the last mile of digital inclusion in urban, sub-urban and rural areas and this enables citizens to link directly with vendors of modern services and producers of goods in a swift manner, enabling them to leapfrog some of the physical infrastructure challenges germane to the subregion,” he added.

Akinwale Goodluck, Head of GSMA’s Sub-Saharan Africa Directorate, described the synergy between his institution and ECA in producing the “robust and evidence-based report” as “wonderful and collaborative,” saying it would contribute greatly to enhancing the digital economy of Central African states, while urging policy makers and the associated industries to adopt its recommendations.


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