Despite bottlenecks, optimism grows about e-commerce in ACP countries

2 October 2013
ITC News
Panellists at WTO’s Public Forum discuss prominent e-commerce success stories and challenges in developing countries

Electronic commerce, or e-commerce, has become a significant tool in unlocking job creation and innovation for small and medium-sized enterprises (SMEs) in developing countries and. Despite significant bottlenecks and challenges, panellists at a session of the World Trade Organization’s Public Forum agreed that much has been achieved, citing success stories such as M-pesa, a mobile-phone payment system, and, more recently, Jumia in Nigeria and Cote d’Ivoire.

The session entitled ‘How to leverage e-commerce for trade development in the ACP countries’ held on 1 October, was organized by the African, Caribbean and Pacific Group of States, the Friedrich-Ebert-Stiftung (FES) and the International Trade Centre (ITC).

‘In the past 20 years, the internet has become a global marketplace,’ said Ambassador Marwa Kisiri, Head of the Geneva office of the General Secretariat of the African, Caribbean and Pacific Group of States (ACP). He added that the United Nations Post-2015 development framework, which is being developed, mentions the need to foster and make use of new technologies for the greater good of all.

In her welcome address, Ms Arancha González, ITC’s Executive Director, urged panellists to rise to the challenge of finding ways to harness the immense intellectual and entrepreneurial potential in developing countries in ways that would help them leapfrog developmental stages.

One ‘revolutionary’ example of the internet’s potential to offer a level playing field that did not distinguish between small and large companies, was M-pesa, the mobile-phone payment system widely used in Kenya.

‘It’s much better than anything else we have seen around the world,’ said Mr Konstantinos Komaitis, Policy Adviser at the Internet Society (ISOC).

Martin Labbé, Online Marketing and Digital Networks Adviser at ITC, highlighted more recent success stories, notably online retailer Jumia, which has bypassed online payments with a cash-on-delivery model in Nigeria and Cote d’Ivoire.

Nonetheless, inadequate online payment systems remain one of the major hurdles to e-commerce and are especially problematic when it comes cross-border trade, said Mr Labbé.

Panellists agreed that there are a number of bottlenecks to e-commerce in the ACP countries that need to be dealt with, including education and internet infrastructure. More should also be done to build the capacity of entrepreneurs and policymakers to enable and sustain e-commerce.

Mr Thiendou Niang, Managing Director of Senegal’s Afrique Communication, noted that only 6% of the population in Senegal had access to a formal bank account and added that ACP countries would need to build partnerships with the private sector to develop local models and local investors to tap into the potential of ACP countries.

Ms Sandra Ribeiro, Project Manager of Cape Verde’s e-Gov Upgrade Project, Núcleo Operacional para a Sociedade de Informação (NOSI), said that increased transparency resulting from the provision of e-governance services, such as electronic registration of births, marriages and even companies in Cape Verde has helped develop a culture of e-service in the country.

‘E-commerce in Africa will also push governments to adopt more transparent ways of governance. Bureaucracy contributes to higher costs of doing business,’ Ms. Ribeiro said. ‘Before the e-government initiative it would take three months to register a company; now it can be done electronically in one hour.’

Other countries have noticed, she said, and NOSI is now developing e-government solutions for Mozambique and Burkina Faso.

‘For a small country that doesn’t have much resources, we have gone far,’ Ms Ribeiro said.

The Public Forum is held on 1–3 October at World Trade Organization (WTO) headquarters in Geneva under the theme of ‘Expanding trade through innovation and the digital economy’.