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MOBILE COMMERCE

UK govt. report emphasises the potential of Africa’s digital economy

By our News Team | 2022

African digital commerce is generating only $180-billion, meaning there is room for growth – particularly as mobile tech becomes more available.

Mobile commerce in Africa has huge potential to contribute to the economic transformation of the continent, according to a recent study released by Britain’s Department for International Trade (DIT).

The report Towards A Flourishing Digital Economy for All – A Spotlight on Africa, was prepared in partnership with Mobile World Live and examines the various challenges and opportunities around the sector in emerging markets, particularly in Africa.

In remarks at the 2022 Mobile World Congress in Spain recently, Mike Freer, Britain’s Minister for Exports, noted that digital trade is at the heart of global growth and is expected to account for half of all trade by 2050. 

He said the UK is keen to work with countries across Africa to boost digital trade and, in 2019, set out a broad range of shared priorities with the African Union. Since then, Britain has supported projects in countries such as Côte d’Ivoire and Uganda to the value of US$2.6-billion in an effort to enhance digital trade.

Mobile Commerce

Photo by Nataliya Vaitkevich from Pexels

According to the Minister, mobile commerce has created many successful businesses around the world and he hoped the paper would spur discussions on how to boost mobile commerce in Africa.

Africa’s slice of the digital economy remains small

Giving an overview of the report, Dr Mike Short, Chief Scientific Adviser at the DIT, said the volume of e-commerce globally is expected to rise from US$3.3-trillion in 2019 to US$7.4-trillion by 2025. Of this, only $180-billion was generated in Africa, which indicates there is room for growth on the continent.

He said there has been rising interest in mobile commerce in Africa, with about 500 financial technology firms operating, and several technology hubs supporting them.

However, the report also showed that there are disparities in use, with low uptake in rural areas, in particular, masked by impressive headline figures on uptake. There are also large numbers of users still using second- and third-generation handsets, which hinders access to the full range of digital services.

According to the report, there are approximately 562-million registered mobile money users on the continent, who generate around $495-billion in transactions. However, only a quarter of these users are regarded as very active.

Other challenges identified are the lack of robust identity and addressing systems which engender trust in the digital economy. But the report indicates there is growing enthusiasm for mobile commerce in Africa, with customers spending an average of $39 on purchases.

“Our report triggers a much-needed discussion on how to advance the mobile commerce revolution in Africa, which will, in the long-term, lead to mutually beneficial digital trade between the continent and its trading partners, including the UK,” said Short.

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