Building an Inclusive and Sustainable Digital Trade Ecosystem in Africa through the AfCFTA Protocol on Digital Trade (AfCFTA)
6 Dec 2023 10:00h - 11:30h UTC
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Kolofele Kugla
The analysis emphasises the significance of digital inclusion in driving socioeconomic development in Africa. One of the key arguments made is the need to include Micro, Small, and Medium Enterprises (MSMEs) in digital trade, as this is considered crucial for their growth and success. By enabling MSMEs to have an online presence, they can expand their customer reach and increase sales. Given that SMEs account for 90% of private sector jobs and 80% of all jobs in Africa, supporting their digital inclusion is seen as a practical solution to boost employment and economic growth.
Furthermore, the analysis highlights the importance of digital inclusion in addressing the gender divide. Africa is the only region where women are more likely to be entrepreneurs than men. However, women face significant barriers in accessing digital skills and internet connectivity, limiting their entrepreneurial opportunities. By closing the digital gender gap and providing digital skills training and internet access for women, a significant socioeconomic problem can be resolved. It is seen as a way to empower women and promote gender equality.
Another crucial aspect discussed is the low level of digital literacy in Africa, particularly among women. Investing in digital education is seen as fundamental to achieving digital inclusion. By equipping individuals with digital skills, it can create a future labor force that does not require migration. This not only benefits individuals in terms of job opportunities but also contributes to the overall development of the continent.
The analysis also highlights the African Continental Free Trade Area (AFCFTA) as a catalyst for inclusivity and gender equality. The AFCFTA protocol contains provisions to promote gender equality and inclusivity. Additionally, a separate protocol has been formulated to address inclusivity issues. This demonstrates the commitment towards sustainable socioeconomic development and the recognition of the importance of inclusivity and gender equality within the trade framework.
Other key issues identified include the pressing need to address cross-border payments for easier transactions and the digital divide. Innovative e-payment solutions in East Africa can be shared with other African countries, and leveraging South Africa’s strong financial system can aid in the development of cross-border payment solutions.
Moreover, partnerships and collaboration are seen as vital in bridging the digital divide. Collaborations with institutions like Microsoft can provide lab facilities in schools, public libraries, and halls can act as shared spaces for digital labs, and students can contribute to website development for small businesses. Such partnerships can help ensure that the benefits of digital technology are accessible to everyone, regardless of their socioeconomic background.
The analysis also emphasises the role of tech companies in developing digital ecosystems through their corporate social responsibility (CSR). Tech companies can assist small-to-medium enterprises (SMEs) in establishing an online presence, and companies like DHL can provide support in understanding customs processes. It highlights the importance of corporate involvement in driving digital inclusion and supporting the growth of online businesses.
Lastly, public procurement regulations are seen as a potential tool for supporting online businesses. In South Africa and Kenya, regulations already require opportunities to be given to women. Having an online presence can become a factor in public procurement processes, thereby providing opportunities for online businesses and promoting gender equality.
In conclusion, the analysis underscores the central role of digital inclusion in Africa’s socioeconomic development. By including MSMEs in digital trade, bridging the digital gender gap, addressing the low level of digital literacy, fostering inclusivity and gender equality through the AFCFTA, and tackling pressing issues such as cross-border payments and the digital divide, Africa can unlock its full potential. Partnerships, collaboration, and the active participation of tech companies are key in bridging the digital divide, and public procurement regulations can be leveraged to support the growth of online businesses and create opportunities for women. Through these efforts, Africa can achieve sustainable socioeconomic growth and empower its citizens.
Adam Abdelal
AfriExim Bank has implemented a comprehensive digital ecosystem to revolutionize trade in Africa. This ecosystem encompasses various platforms designed to support different aspects of the trade value chain. For instance, the Trade Art Club and Mansa platforms facilitate due diligence and provide a digital repository of companies that have undergone scrutiny. These initiatives promote good practice, transparency, and accountability while reducing compliance costs.
The Pan-African Payment and Settlement System (PAPS) is another vital component of AfriExim Bank’s digital strategy. It enables trade transactions to be conducted in national currencies, eliminating the need for hard currency and reducing economic problems caused by dependency on foreign currencies. Furthermore, PAPS aims to harmonise payment systems across different regions of Africa, thus facilitating intra-African trade.
The African Trade Exchange platform offers collective buying opportunities, where different countries can come together for purchases, increasing their bargaining power. This strengthens the purchasing power of African nations and promotes responsible consumption and production.
Under the leadership of Adam Abdelal, AfriExim Bank has spearheaded several digital initiatives to enhance Africa’s position in global trade. Collaboration with the African Continental Free Trade Area (AFCFTA) and the African Union has been instrumental in implementing these initiatives. The success of these digital platforms in Africa has paved the way for future expansion.
The importance of public-private partnerships (PPPs) cannot be overstated in overcoming digital barriers in Africa. Investments in digital infrastructure capacity are crucial, and PPPs provide the private sector with a voice in policymaking while stimulating capacity building and skills development.
Investing in digital infrastructure is a priority as it enhances network connectivity and serves as the foundation of a thriving digital economy. Similarly, comprehensive digital skills training programs are essential to equip the workforce for the demands of the digital era.
Support for tech startups and innovation hubs is paramount in driving innovation and economic growth. Establishing policies, financial mechanisms, and access to funding and mentorship can create an enabling environment for their growth and success.
PPPs can play a significant role in improving government performance by reducing bureaucratic hurdles. Introducing digital platforms through PPPs can streamline processes and enhance efficiency.
Moreover, PPPs facilitate market access and support cross-border trade by creating an environment that allows businesses to engage seamlessly across borders.
The Pan-African Payment and Settlement System (PAPS) has successfully onboarded ten central banks, further strengthening its scope and reach. This system encourages central banks across Africa to join PAPS, promoting financial inclusion and fostering collaboration among African nations.
In conclusion, AfriExim Bank’s digital ecosystem, driven by a robust digital strategy, has brought about transformative changes in trade and economic development in Africa. The bank’s initiatives have not only improved Africa’s position in global trade but also addressed perceived trading risks, enhanced transparency and efficiency in trade and payment processes, and promoted collaboration among African nations. Public-private partnerships, investment in digital infrastructure, skills development, support for tech startups, and cross-border trade all play crucial roles in Africa’s digital transformation journey. The Pan-African Payment and Settlement System (PAPS) has demonstrated its effectiveness by onboarded central banks and expanding financial inclusion.
Darago Rashid
The analysis provides key insights into the protocol on digital trade and digital inclusion. It emphasises the importance of considering vulnerable populations in digital trade and incorporating provisions for them in the digital trade dynamic. Member states of the African Union are called upon to reintroduce the need to consider vulnerable populations in digital trade, and a clear article in the protocol specifically addresses digital inclusion. This indicates a positive sentiment towards the protocol’s focus on digital inclusion.
Additionally, the analysis suggests that states need to strengthen their policies and strategies around digital trade. It is argued that a vision, policy, and strategy are required to effectively implement initiatives related to digital trade and inclusion. The case of Togo is highlighted, where a clear vision emphasises inclusion as a priority, guided by the highest authority. This positive sentiment towards strengthening policies and strategies indicates the importance of a comprehensive approach to digital trade.
Furthermore, the analysis stresses the need for adequate cyber legislation and a strong legal framework to support digital inclusion. The case of Togo is presented as an example of a country with cyber laws enabling the implementation of protocol provisions. Togo’s laws include provisions on digital transactions, personal data, and the fight against cybercrime. This positive sentiment towards strengthening the legal framework suggests that a robust legal framework is crucial for promoting digital inclusion.
The analysis also highlights the importance of skill development and investment in skill-strengthening policies for managing emerging technologies and promoting digital inclusion. It is argued that economies must invest in skill-strengthening policies to ensure that digital inclusion goes hand in hand with the economy of skills. This underscores the significance of human capital development in the digital era.
Difficulties in balancing public and private sector involvement in digital platforms are noted. The case of Togo is mentioned, where the Ministry of Commerce created an e-commerce platform to promote local products but faced challenges competing with private sector platforms. As a result, they limited their platform to promotion rather than commercialisation. This negative sentiment implies the need for careful consideration in achieving a balanced and fair involvement of both sectors.
The analysis also highlights the need for concessions in terms of digital sovereignty and security. The protocol on digital trade requires states to make concessions, such as accepting data transferred from another party state and mutually recognising electronic certifications and authentications. This positive sentiment towards concessions suggests that a willingness to give up certain prerogatives is necessary to achieve a unified digital market.
Furthermore, the analysis argues that achieving a unified digital market is essential for the African Union’s ambition of creating a unique market and eliminating trade obstacles. It is clarified that this does not mean a loss of sovereignty but rather a consolidation to achieve common objectives. This positive sentiment towards a unified digital market emphasises the importance of collaboration and cooperation among African countries for digital trade.
The analysis also points out the importance of having a national strategy for cybersecurity and digital transformation, including infrastructure, security, and regulation of transactions. The case of Tunisia is cited as an example of a country with a national strategic plan composed of pillars that encompass these elements. This positive sentiment towards the presence of a national strategy highlights the value of a coordinated approach to cybersecurity and digital transformation.
The implementation of Mobile ID in Tunisia to ensure access to administrative services for citizens is seen as a positive development. This reinforces the importance of digital accessibility and the use of emerging technologies to improve public services.
In contrast, the analysis notes that many strategies do not have a data governance strategy. This negative sentiment highlights the need for a structured approach to data governance to ensure the responsible and ethical use of data in the digital era.
Lastly, the analysis suggests that the ECOWAS protocols will boost interoperability and information exchange between African countries. This positive sentiment towards the protocols underscores the value of regional partnerships and collaboration in promoting digital trade and inclusion.
Overall, the analysis provides valuable insights into the protocol on digital trade and digital inclusion. It emphasises the importance of considering vulnerable populations, strengthening policies and strategies, having a strong legal framework, investing in skill development, balancing public and private sector involvement, making concessions in terms of digital sovereignty and security, achieving a unified digital market, having a national strategy for cybersecurity and digital transformation, ensuring digital accessibility, and implementing data governance strategies. It highlights both positive developments and challenges in the pursuit of digital inclusion, underscoring the need for comprehensive and collaborative efforts to create an inclusive digital landscape in Africa.
Tola Onayemi
The analysis reveals several important points about digital trade in Africa. Firstly, the AFCFTA (African Continental Free Trade Area) protocol places a strong emphasis on digital inclusion and addresses the specific needs of small businesses, individuals with disabilities, and indigenous communities. Unlike other protocols, the AFCFTA protocol has a dedicated chapter on inclusion. This demonstrates the commitment to creating an inclusive and sustainable digital trade ecosystem.
Secondly, broadband access is a crucial issue that can greatly impact access to digital trade. Insufficient broadband infrastructure and high costs act as major obstacles for businesses and individuals in Africa. The lack of broadband access hinders digital trade opportunities and limits economic growth. Furthermore, the analysis highlights that organizations need to justify the return on investment for setting up broadband access, and increased economic activity on e-commerce platforms can potentially encourage investments in broadband infrastructure.
The standardisation of digital trade protocols is identified as essential in promoting economic activity and justifying investments in broadband access. By creating joint standards, countries can ensure that more businesses can go online, which in turn promotes economic growth. The harmonisation of rules and the predictability of regulations aid businesses in understanding and adapting to the rules surrounding data sharing. This increases market competition and facilitates cross-border trade.
Additionally, the analysis underscores the importance of public digital infrastructure for thriving e-commerce. The AFCFTA protocol aims to catalyse cross-country investment in infrastructure, and both public and private sectors are encouraged to make infrastructure investments. Building reliable and efficient digital infrastructure supports the growth of e-commerce and contributes to sustainable economic development.
The establishment of minimum data protection standards for cross-border transactions is advocated in the analysis. This is crucial for ensuring the security and privacy of data shared across borders. Data protection regulations already exist in 61% of African countries, highlighting a growing recognition of the need to safeguard data in cross-border transactions.
On the other hand, concerns are raised about the negative effects of data localisation. Prohibiting data sharing and enforcing data localisation can lead to increased costs for businesses, making data backups more expensive and increasing compliance costs for small businesses. Balancing the need for data protection and facilitating data sharing is crucial.
The analysis also highlights the challenges surrounding digital taxation in Africa. Digital taxes, particularly, remain a contentious issue. The discussions during negotiations centre around finding the best approach to digital taxation. The solution proposed is to use data modelling to strike a balance between generating revenue and avoiding excessive taxation. This ensures that consumer prices for online services do not become exorbitantly high.
Finally, it is argued that member states should view trade participation responsibilities as an opportunity to generate revenue, rather than solely focusing on taxation. Increasing trade participation can lead to an increase in GDP and wealth, resulting in more revenue in the long term.
In conclusion, the analysis sheds light on various aspects of digital trade in Africa. From the importance of digital inclusion and broadband access to the need for standardisation, public digital infrastructure, and minimum data protection standards, it is clear that strategic measures are required to foster a sustainable and inclusive digital trade ecosystem. Addressing the challenges of data localisation and digital taxation further contribute to creating a conducive environment for growth and economic development in the digital economy.
Audience
The analysis explored various aspects related to digital trade in Africa, including taxation, data flows, and digital inclusion. One of the key arguments raised was the concern about the level of taxation on digital infrastructure in African countries. It was noted that many African countries have been introducing taxes on different layers of the internet, which is identified as a major hindrance to going online, affording devices, and establishing digital infrastructure. The analysis highlighted the need to strike a balance between revenue generation and creating a conducive environment for the growth of the digital economy.
In contrast, ASEAN countries were praised for their work on analyzing digital trade between data flows and trade. These countries were seen as an example of how such analysis can be effectively conducted. This work in ASEAN countries suggests the importance of adopting similar approaches in Africa to better understand and harness the benefits of digital trade.
The need for convergence between national and regional governments in Africa was emphasized, particularly in relation to cross-border data flows and data localisation. The complexities involved in negotiating and establishing agreements and laws in this area were acknowledged. It was argued that a collective effort and better cooperation among African countries are necessary to promote seamless cross-border data transition and digitalisation.
The presenter highlighted the importance of the African Continental Free Trade Area (AFCTA) protocol and the challenges it faces in terms of ratification due to sovereignty issues. The overcoming of these issues was deemed necessary for the successful digitisation in Africa. This observation underscores the role of political will and collaboration in driving digital transformation on the continent.
In Ghana, the government has taken steps to ensure digital inclusion by setting up community information centres, which provide access to ICT services and the internet to grassroots communities. This initiative showcases the commitment of the Ghanaian government to bridge the digital divide and empower its citizens with digital resources.
The implementation of the digital trade protocol was seen as requiring the establishment of payment systems, such as the Pan-African payment system. This highlights the need for efficient and secure cross-border payment mechanisms to facilitate smooth digital trade across the continent.
Another noteworthy observation from the analysis was the suggestion that libraries, postal services, and schools should play a role in delivering ICT services to local communities. This aligns with the idea of promoting digital inclusion and ensuring that all segments of society have access to digital resources and opportunities.
To conclude, the analysis highlights the challenges and opportunities related to digital trade in Africa. It emphasises the need for balance in taxation policies, the importance of regional cooperation, the significance of digital inclusion initiatives, and the role of efficient payment systems. By addressing these aspects, Africa can harness the potential of digital trade and accelerate its economic growth and development.
Betiba
The African Continental Free Trade Area (AFCFTA) presents a promising opportunity for entrepreneurs, but adequate preparation, especially for small and medium-sized enterprises (SMEs), is essential. Betiba, a company, has recognized this need and developed the Ouadaka marketplace to assist merchants in leveraging the benefits of AFCFTA.
In promoting e-commerce, Betiba places great importance on training and adaptability to digital tools. They offer comprehensive training to merchants, covering digital marketing, photography for e-commerce, and the legal framework of online sales. This equips merchants with the necessary skills to navigate the digital landscape and thrive in the increasingly competitive e-commerce industry.
Furthermore, Betiba has implemented various initiatives to support merchants in their e-commerce ventures. They organize webinars on online security to raise awareness about potential risks and educate merchants on best practices for safeguarding themselves and their customers. Additionally, they facilitate access to microcredit, enabling merchants to secure the necessary funds for establishing and expanding their e-commerce businesses.
An important aspect of Betiba’s approach is their emphasis on inclusivity. Recognizing that illiterate populations may face challenges in engaging with e-commerce platforms, they propose the incorporation of artificial intelligence and audio functionalities in local languages. This ensures that entrepreneurs of all literacy levels can fully benefit from the opportunities presented by AFCFTA.
Overall, AFCFTA holds significant potential for entrepreneurs, particularly SMEs. However, adequate preparation and support are crucial for businesses to fully capitalize on these opportunities. Betiba’s Ouadaka marketplace, with its focus on training, adaptability, and inclusivity, serves as a valuable resource for entrepreneurs looking to thrive in the e-commerce landscape within the framework of AFCFTA. By equipping SMEs with the necessary skills and tools, Betiba aims to facilitate their growth and contribute to the success of AFCFTA as a catalyst for economic development.
Moderator – Efia Agemendia
The analysis includes four speakers addressing different aspects of digital trade in Africa.
The first speaker emphasises the importance of developing domestic strategies for digital inclusion, specifically focusing on the social and economic benefits it would bring. They argue that these strategies would create opportunities for marginalized groups in Africa. This aligns with the United Nations Sustainable Development Goals (SDGs), particularly SDG8 (Decent Work and Economic Growth), SDG9 (Industry, Innovation and Infrastructure), and SDG10 (Reduced Inequality). The speaker’s sentiment towards digital trade is positive.
The second speaker focuses on the need to safeguard the internet and enhance cybersecurity. They highlight the necessity of establishing legal and regulatory frameworks that facilitate digital trade while also ensuring effective cybersecurity management. By addressing these issues, the speaker believes that Africa can fully maximise the potential benefits of digital trade. The sentiment expressed by this speaker is also positive.
The third speaker argues for bridging the digital divide and promoting inclusivity and sustainability within the digital trade ecosystem across Africa. However, no specific evidence or supporting facts are mentioned for this point, and the sentiment expressed is neutral.
Finally, the fourth speaker acknowledges the challenges facing digital trade in Africa but remains optimistic. They highlight that these obstacles are actively being addressed in the digital trade protocol. Although no specific evidence or supporting facts are provided, the speaker’s sentiment towards digital trade is positive.
Overall, the analysis underscores the significance of digital inclusion, cybersecurity, bridging the digital divide, and resolving obstacles to promote digital trade in Africa. These factors are essential for achieving sustainable economic growth and reducing inequalities. Furthermore, the analysis reveals the need to develop legal and regulatory frameworks to facilitate digital trade while safeguarding the internet and enhancing cybersecurity measures. It also highlights the ongoing efforts to address challenges within the digital trade protocol.
Speakers
AA
Adam Abdelal
Speech speed
145 words per minute
Speech length
2084 words
Speech time
860 secs
A
Audience
Speech speed
179 words per minute
Speech length
840 words
Speech time
282 secs
B
Betiba
Speech speed
115 words per minute
Speech length
500 words
Speech time
261 secs
DR
Darago Rashid
Speech speed
119 words per minute
Speech length
2192 words
Speech time
1105 secs
KK
Kolofele Kugla
Speech speed
175 words per minute
Speech length
2509 words
Speech time
861 secs
M-
Moderator – Efia Agemendia
Speech speed
148 words per minute
Speech length
1755 words
Speech time
710 secs
TO
Tola Onayemi
Speech speed
215 words per minute
Speech length
4139 words
Speech time
1154 secs
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