The United Nations Conference on Trade and Development (UNCTAD) says the coronavirus crisis is boosting e-commerce as more people are shopping online all over the world.
But it seems the Least Developed Countries (LDCs) are not adequately prepared to tap the ensuing opportunities.
UNCTAD’s rapid eTrade readiness assessments conducted in Benin, Mali and Niger found that the three West African countries need far-reaching reforms to seize the benefits of online commerce.
Findings of the assessments released on April 30 during the UNCTAD eWeek reveal that the three nations need better infrastructure and e-commerce strategies, as well as capacity-building and improved access to finance for entrepreneurs.
The assessments funded by Germany as part of its support to UNCTAD’s eTrade for all initiative call for assistance from development partners to help the countries implement medium to long-term measures to grow their e-commerce sectors which, as in many LDCs, are nascent and mostly hinge on the informal sector.
Most payments are still made upon delivery, in cash or via mobile payments, due to the low penetration of financial services and the lack of confidence of consumers, producers and service providers, the assessments note.
In Benin, the assessment found a fragile but emerging e-commerce sector being propped up by government efforts.
The country’s Minister of Industry and Trade, Shadiya Alimatou Assouman, says “we see e-commerce not just as a trade accelerator, but also as an important means to overcoming the barriers erected by the COVID-19 pandemic and to ensuring the continuity of commercial activities.”
Benin’s Minister of Digitalisation, Aurélie Adam Soule Zoumarou, echoed the sentiments, saying: “Mobility restrictions due to the coronavirus pandemic demonstrate the need to intensify digitalization in all sectors of our country.”
She said e-commerce could bolster the country’s economic growth. “The report on Benin’s readiness to engage in e-commerce is therefore timely, and we’ll work to implement its recommendations.”
Until now, the growth of Benin’s e-commerce sector has mainly relied on the informal economy, through social networks and the strong development of mobile money. Now the country plans to develop a bonafide strategy with UNCTAD’s support.
In 2018, Benin adopted a digital law to regulate electronic communications, digital archiving, electronic signatures, e-commerce, personal data protection, cybersecurity and the fight against cybercrime. But it’s yet to be fully implemented
According to the UNCTAD assessment, “although Benin has already significantly invested in information and communications technology (ICT) infrastructure, it still should map priority needs and ramp up action to achieve its objective of providing high-speed broadband coverage to 80% of the population.”
For instance, it should expand connectivity and lower the cost of internet access, seeing as almost half of the population (45%) has no access to electricity.
It urges further action to bridge gaps between required and existing skills among digital entrepreneurs and more measures to ease their access to credit from banks or microfinance institutions.
Mali: Massive infrastructure investment needed
The Malian e-commerce sector remains in its infancy despite efforts by public and private sectors to boost it, UNCTAD’s assessment notes.
It points to the need to accelerate the implementation of projects and reforms in the country’s digital strategy through a steering and coordination framework with clear implementation commitments.
Landlocked Mali’s internet penetration stands at only 12.7%, with users concentrated in the capital Bamako, the assessment finds. The country’s digital isolation is aggravated by its geography, increasing the transportation and logistical difficulties faced by businesses.
“A massive increase in investments in internet broadband infrastructure, more public-private cooperation and infrastructure sharing are priority needs,” the report says. Also, more support is needed for the national post and logistics sector to make them digital-ready.
Despite Mali’s fast-growing mobile money adoption, it is hobbled by inadequate financial services, low financial inclusion, limited competition and slow uptake of e-payment methods for e-government services.
The country’s ongoing national implementation of a regional strategy for financial inclusion should be sustained to lay a firm foundation for e-commerce, the assessment report says.
It adds that the country’s legal framework should be improved and public administration officials better equipped to integrate e-commerce into their support for the private sector.
UNCTAD urges the Malian government to leverage its sensitized public administration, broadband internet infrastructure projects and dynamic startups to implement coherent and inclusive actions to boost the e-commerce sector and the digital economy.
Niger: Need for national e-commerce strategy
Niger does not have a national e-commerce strategy yet but has rolled out sectoral digital initiatives under various ministries, such as e-health, e-agriculture, e-education and e-government programmes, UNCTAD’s assessment says.
These initiatives could be bolstered by integrating sectoral strategies into a national strategy and by enhancing ratcheting up cooperation among the ministries, according to the assessment.
The country’s Minister of Trade, Sadou Seydou, says “the coronavirus pandemic is a harsh reminder of the important place of digital technologies in our lives and as a tool to mitigate the effects of such crises. A national e-commerce strategy will help guide our efforts.”
Also landlocked, Niger has made advances in rolling out an internet backbone network. It has also developed a legal framework by adopting several laws on electronic transactions, including on e-commerce and consumer protection.
“Niger’s e-commerce potential is constrained by insufficient coverage, limited access to the Internet, a 70% illiteracy rate, a 20% access to electricity and lack of addressing systems”, the assessment says.
It recommends a public-private consultation framework to support the development of e-commerce in the country.
Nigerien banks’ slow uptake of financing innovations and digital payments, as well as low penetration of financial services, also limit the country’s e-commerce growth.
The report suggests developing the interoperability of financial services and sensitizing customers and producers about the benefits of online payments, the uses of exchange platforms and their safe guarantees.
Further, it urges more efforts to build the capacity of entrepreneurs running the country’s emerging digital startups and incubators and to ease their access to credit from banks or microfinance institutions.