With the potential to create up to 3-million new jobs by 2025, e-commerce could help to drive inclusive growth across Africa.

This is the key message from the African E-Commerce Agenda released today by the World Economic Forum and International Trade Centre.

Despite this, e-commerce start-ups face many obstacles, including low consumer digital trust, poor infrastructure and low regional integration.

The Africa E-Commerce Agenda includes a call to action for Africa’s political leaders, the international trade community and the development community, and lays out an eight-point action plan that will allow African governments to realise the benefits that e-commerce offers the continent.

“The scale of the challenges should not hold back effort, given that e-commerce could bring jobs for youth, new markets for rural communities, and empower female entrepreneurship, among other benefits,” says Elsie Kanza, head of the regional agenda, Africa and member of the WEF executive committee.

“Action by Africa’s leaders and international partners on an agreed set of priorities can ensure e-commerce is a force for sustainable development. With e-commerce policy debate ramping up in the region and new partnerships for capacity-building on the rise, now is a critical time to consolidate focus.”

Albert Muchanga, African Union commissioner for trade and industry, adds: “E-commerce is the future, and Africa will fully leverage it to secure hers.”

Each action item identifies challenges and sets goals to help policy-makers navigate the multi-dimension e-commerce landscape. It offers ways to address the challenges – including through public-private collaboration – and calls on the international development community to step up. It suggests how African economies may best use domestic, regional and international policy, given the borderless potential of e-commerce.

The eight action items are: refresh policies; expand connectivity; upgrade logistics; enable e-payments; manage data; grow the tech industry; coach small business; and join forces.

“The future of trade is digital, and a large component of this is e-commerce, which has the potential to transform how businesses in Africa produce, sell and consume goods and services,” says ITC executive director Arancha Gonz├ílez. “This eight-point plan sets out the e-commerce ecosystem in which governments and the business community need to invest in order to harness the power of the digital marketplace.”

The agenda also recognizes the importance of the larger ecosystem of digital technology and supporting elements.

“Africa’s E-commerce Agenda is a thoughtful, concrete and actionable workplan to promote inclusive digital trade that benefits individuals, with small businesses set to gain most,” says Ambassador Demetrios Marantis, senior vice-president and global head of government engagement primary organisation at Visa. “Visa is proud to be implementing this agenda, along with private- and public-sector partners, to realize the promise of e-commerce across the continent.”

The report points out that e-commerce in Africa is well underway, involving business-to-business, business-to-consumer, goods and services. Already, estimates suggest as many as 264 e-commerce start-ups are operational across the continent, active in at least 23 countries.

Online marketplaces could generate 3-million jobs by 2025. These will be direct, as well as in supporting services, such as logistics and payment service providers; customer relations management, marketing, analytics and website services and technology vendors. In turn, delivery services will need mechanics, job portals require recruiters, while any business relies on legal, accounting and office space.

With action, e-commerce can become a force for sustainable development, according to the report.

There are many challenges, however. Many start-ups are unprofitable; and entrepreneurs battle with low consumer trust and e-skills, low internet penetration and affordability, uncompetitive delivery infrastructure, fragmented markets and rising barriers to cross-border e-payments.

According to some estimates, emerging economies stand to gain $3,7 trillion in GDP by greater use of digital finance, yet only 34% of African adults made or received a digital payment in 2017.

Despite increased digital visibility in neighbouring markets, intra-regional and global e-commerce trade remains small.

In addition, regulations have not kept pace with digital developments: according to the United Nations, 32 of Africa’s 54 nations have laws in place to govern “e-transactions” (online exchange); 23 have laws on data protection and privacy; and only 20 address online consumer protection.

The region also lags behind others in the UNCTAD B2C E-commerce Index, which is calculated on a set of four composite indicators highly relevant to online shopping.

Generating the 3-million new jobs assumes a 25% to 50% annual revenue growth from Africa’s current online market places.

The African Union Commission, together with the Economic Commission for Africa and other relevant stakeholders, have been tasked by governments in the region to develop a digital trade and digital economy development strategy by February 2020. The World Economic Forum and the International Trade Centre stand ready to work with partners to advance progress.

The agenda is the result of consultations at two regional public-private dialogues. The first was held alongside the Africa eCommerce Week in Nairobi, Kenya in December 2018 and attended by 60 participants. The second took place during the Transform Africa Summit in Kigali, Rwanda in May 2019, with 25 high-level stakeholders.