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E-commerce Growth in Africa Remains Relatively Low
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E-commerce Growth in Africa Remains Relatively Low

E-commerce is growing all over the world. However, this growth is unequally distributed between countries and continents. While in Europe, Asia and America, the train seems to have reached its cruising speed, in Africa things are difficult to put in place

Challenges that Africa must imperatively meet

Nameless streets, customers without a postal address, or who forget to provide the amount of cash needed to pay for the order, these are the hassles observed in the field by any e-commerce player in Africa. Even if e-commerce is promising in Africa, it is still embryonic: less than 1% of trade is done online in Africa because the obstacles to the development of e-commerce in Africa are major: Inadequate road infrastructure for the transport of goods, low internet access, preponderance of cash payments, digital divide, unsuitable regulatory and institutional frameworks, poorly informed consumers.

Report charts of e-commerce development in Africa

Concerning for example the means of payment, while in European countries, several electronic payment methods exist, in particular bank cards, payment services such as PayPal, in the majority of African countries, electronic payment is limited to mobile money. Credit cards are only used by a tiny fraction of the population. Moreover, the emergence and development of electronic money and mobile payments are making uneven progress in different countries. Payment for online orders is mostly made by cash on delivery in ECOWAS countries, due to unequal financial inclusion between countries and interoperability issues. In such a context, it is difficult for e-commerce platforms to be able to do well.

It's not too late to get it right

Although there are many challenges for e-commerce in Africa, there are great prospects for digital payments on the continent. According to a McKinsey survey, Africa’s payments mix is evolving fast, with e-wallets continuing to grow the fastest. The future of electronic payments in Africa is one of tremendous growth and opportunity. Many African countries have seen record growth in e-payments over the past two years: mobile-money transaction volumes in Nigeria doubled to around 800 million in 2020, according to the Central Bank of Nigeria, while data from South Africa show that online commerce grew by around 40 percent during lockdowns in 2020 and 2021. 

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