https://orcid.org/0000-0003-1529-3451
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ABSTRACT
The digital economy has become an essential factor in economic diversification, yet regional trade blocs lack support for putting in place legal mechanisms to facilitate cross-border e-commerce activities between their member states. This article examines the potential for cross-border e-commerce in the context of the African Continental Free Trade Area (AfCFTA) by identifying opportunities but also critical challenges in its Digital Trade Protocol. It also reviews the laws and regulations governing e-commerce in each signatory to the AfCFTA – including those laws related to e-transactions, data protection and privacy, consumer protection and cybercrime – taking a deep-dive into discussing the legal environment necessary to support cross-border online business activities. Based on this analysis, this article offers important insights and recommendations for policymakers, proposing an integrated cross-border e-commerce system based on a centralised shipping method. Specifically, it recommends harmonising customs procedures, improved infrastructure, and financing mechanisms.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
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4 The contribution of the digital economy to the national GDP accounted for about 9.6% in the Philippines in 2021, 13% in Thailand and Vietnam, 8.2% in the same year, and 14.26% in 2022 respectively. Asian countries have been notably successful in enhancing the digital economy, having e-commerce as one of its main pillars.
5 International Finance Corporation (IFC) and Google, e-Conomy Africa 2020 Report.
6 Florian Ploeckl, ‘A Novel Institution: The Zollverein and the Origins of the Customs Union,’ (Discussion Paper 05, 2019). https://iit.adelaide.edu.au/ua/media/2051/2019-05-a-novel-institution-fp-final.pdf
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9 UNCTAD, E-Commerce and the Digital Economy in LDCs: At Breaking Point in COVID-19 Times, 2022.
10 Hany Besada and Renata Thiebaut, ‘South-South Ideas: E-Commerce and Trade Agreements in the Global South – Lessons from the African Continental Free Trade Agreement’ (South South Ideas paper, 2023), https://www.southsouth-galaxy.org/wp-content/uploads/2023/09/South-South-Ideas-E-Commerce-and-Trade-Agreements-in-the-Global-South.pdf
11 The 2023 Global Innovation Index published by the World Intellectual Property Organization (WIPO) is available at: https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023-en-main-report-global-innovation-index-2023-16th-edition.pdf
12 Mauritius is the country with the best performance among the African countries, in the 45th position, followed by South Africa, in the 61st position, Morocco, and Tunisia in the 67th and 73rd positions respectively.
13 Vanessa Casadella and Sofiane Tahi, ‘National Innovation Systems in Low-Income and Middle-Income Countries: Re-evaluation of Indicators and Lessons for a Learning Economy in Senegal,’ Journal of Knowledge Economy 14 (2023): 2107–37.
14 In Western Sahara, the penetration percentage was 4.6%, while Eritrea had 6.9% and South Sudan 7.9%. Kenya had 85.2%, Libya 84.2%, and Nigeria 73%, have the highest numbers in the region.
15 Some of the countries profiled by UNCTAD have data as latest data the year 2017 or 2019, which do not necessary reflect the current scenario and needs to foster online business, and South Sudan, Western Sahara, Mayotte, and Saint Helena have yet to have public data on internet growth between 2000 and 2001. See Internet World Stats, ‘Internet Usage and Population Statistics Table for Africa,’ https://www.internetworldstats.com/africa.htm
16 Association of Southeast Asian Nations (ASEAN), ASEAN Agreement on Electronic Commerce, 2019, https://agreement.asean.org/media/download/20190306035048.pdf.
17 Raisina Debates, ‘Analyzing the Progress of the Africa Continental FTA,’ Observer Research Foundation, https://www.orfonline.org/expert-speak/analysing-the-progress-of-the-africa-continental-fta.
18 As of 1 January 2023, 44 out of 55 member states have submitted their instruments of ratification for the African Continental Free Trade Area Agreement to the African Union Commission (AUC). Somalia’s cabinet approval for the agreement is still pending, while Eritrea is the only member state that has yet to join the AfCFTA.
19 Raisina Debates, ‘Analyzing the Progress of the Africa Continental FTA.’
20 The purpose of the draft is to establish harmonised rules, common standards, and principles for digital trade in Africa.
21 UNCTAD, E-Commerce and the Digital Economy in LDCs: At Breaking Point in COVID-19 Times, 2022, https://unctad.org/system/files/official-document/dtlstict2022d1_en.pdf
22 African Union, The Digital Transformation Strategy for Africa 2020–30, https://au.int/sites/default/files/documents/38507-doc-dts-english.pdf.
23 African Union, The Digital Transformation Strategy for Africa 2020–30.
24 UNCTAD, ‘Informal cross-border trade for empowerment of women, economic development and regional integration in Eastern and Southern Africa,’ Projects, https://unctad.org/project/informal-cross-border-trade-empowerment-women-economic-development-and-regional-integration.
25 FAO, Agricultural Services and Digital Inclusion in Africa, 2018.
26 UNCTAD, E-Commerce and the Digital Economy in LDCs: At Breaking Point in COVID-19 Times, 2022, https://unctad.org/system/files/official-document/dtlstict2022d1_en.pdf
27 The World Trade Organization is the organisation responsible to regulate global trade and promote trade facilitation among member states. The organisation has advanced in the discussions regarding cross-border e-commerce. The Declaration on Global Electronic Commerce was adopted at the Second Ministerial Conference in 1998, but it has not yet resulted in an international document to regulate cross-border e-commerce.
29 The ECOWAS E-commerce Strategy is financed by the Government of the Netherlands. It will be published soon, but its extension to other AfCFTA members can create a conducive environment for cross-border e-commerce.
30 UNCTAD, ‘E-Commerce in LDCs.’
31 Alastair Tempest, ‘The Digital Economy and E-commerce in Africa – Drivers for the African Free Trade Area (AfCFTA)?, South African Institute of International Affairs, Special Report, May 2022, https://africaplc.com/wp-content/uploads/2020/04/AfCFTA-_Ecommerce_Special-Report_4-May-2020.pdf.
32 Jumia is a Nigerian unicorn established in 2012, known as a marketplace equivalent to the Amazon. The company is listed in the New York Stock Exchange.
33 Takealot.com is South Africa’s leading online store. It was officially launched in June 2011, following the successful acquisition of an existing ecommerce business called Take2 by the US-based investment firm, Tiger Global Management and Kim Reid in October 2010.
34 Alastair Tempest, ‘The Digital Economy and E-commerce in Africa – Drivers for the African Free Trade Area (AfCFTA)?, South African Institute of International Affairs, Special Report, May 2022, https://africaplc.com/wp-content/uploads/2020/04/AfCFTA-_Ecommerce_Special-Report_4-May-2020.pdf.
35 Tempest, ‘The Digital Economy and E-commerce in Africa.’
36 Cash on Delivery (COD) is a payment method where customers pay for the product upon receiving the order. Even if the transaction is conducted online, the customer pays with cash instead of other online payment methods, such as credit cards and e-wallets.
37 The World Bank, The Global Findex Database, 2021, https://www.worldbank.org/en/publication/globalfindex.
38 Digital merchant payment corresponds to payment made by a customer to an online merchant for the purchase of goods or services, which can or cannot be related to e-commerce. The main digital payment methods are bank transfers, credit cards, debit cards, e-wallets, and specific online payment gateways.
39 Statista, ‘Distribution of online payment methods in selected African countries as of 2022,’ https://www.statista.com/statistics/1190895/distribution-of-online-payment-methods-in-african-countries.
40 McKinsey & Company, ‘The Future of Payments in Africa,’ https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-payments-in-africa.
41 Pan-African Payment & Settlement System (PAPSS), ‘Get Connected,’ https://papss.com/get-connected.
42 U.S. Department of Commerce, International Trade Administration, The Rise of E-commerce in Africa, https://www.trade.gov/rise-ecommerce-africa.
43 Charlemagne Igue, Alastaire Alinsato and Toussaint Agadjihouédé, ‘E-commerce in Africa: Issues and Challenges,’ in Advancing Development Through Trade: Volume 23 (2020), ed. World Trade Organization, https://www.wto.org/english/res_e/booksp_e/09_adtera_chapter_05_e.pdf.
44 UNCTAD, Rapid eTrade Readiness Assessments of African Least Developed Countries, eT Ready, https://unctad.org/system/files/official-document/dtlstict2018_eTrade_overview_en.pdf.
45 Alastair Tempest, ‘The Digital Economy and E-commerce in Africa – Drivers for the African Free Trade Area (AfCFTA)?, South African Institute of International Affairs, Special Report, May 2022, https://africaplc.com/wp-content/uploads/2020/04/AfCFTA-_Ecommerce_Special-Report_4-May-2020.pdf.
46 Reuters, Tunisia tackles law to modernise foreign exchange, https://www.reuters.com/world/africa/tunisia-tackles-law-modernise-foreign-exchange-2023-02-08/
47 U.S. Department of Commerce, International Trade Administration, The Rise of E-commerce in Africa, https://www.trade.gov/rise-ecommerce-africa.
48 World Bank, Introduction to Public-Private Partnerships, https://ieg.worldbankgroup.org/sites/default/files/Data/reports/chapters/ppp_chap1_0.pdf.
49 Genevieve Donnellon-May, China’s Push to Advance Rural Revitalization, 2022, https://thediplomat.com/2022/02/chinas-push-to-advance-rural-revitalization/
50 Han Chu, Robert Hassink, Dixiang Xie and Xiaohui Hu, ‘Placing the Platform Economy: The Emerging, Developing and Upgrading of Taobao Villages as a Platform-Based Place-Making Phenomenon in China,’ Cambridge Journal of Regions, Economy and Society, advance online publication 16, no. 2 (2023): 319–34.
51 Farmcrowdy Website, https://www.farmcrowdy.com.
52 FAO, Agricultural Services and Digital Inclusion in Africa, https://www.fao.org/3/CA1050EN/ca1050en.pdf.
53 For example: C2C Maximum Value with no applicable tax: 100 dollars per order and 1,200 dollars per year.
54 For example, B2C Maximum Value: 1,000 dollars per order and 12,000 dollars per year (per consumer ID)
55 World Economic Forum, How Africa’s new Free Trade Area will turbocharge the continent’s agriculture industry, https://www.weforum.org/agenda/2023/03/how-africa-s-free-trade-area-will-turbocharge-the-continent-s-agriculture-industry/#:∼:text = By%202030%2C%20intra%2DAfrican%20agricultural,this%20intra%2Dcontinental%20trade%20boost.
56 The Trade Law Centre NPC (tralac), African Continental Free Trade Agreement (AfCFTA): Comparative analysis of tariff offers, https://www.tralac.org/documents/resources/infographics/4276-afcfta-comparative-tariff-offer-analysis-march-2021/file.html.
57 World Bank, Average time to clear exports through customs (days), https://data.worldbank.org/indicator/IC.CUS.DURS.EX?name_desc = true
58 UNCTAD, E-Commerce and the Digital Economy in LDCs: At Breaking Point in COVID-19 Times, 2022, https://unctad.org/system/files/official-document/dtlstict2022d1_en.pdf.
59 United Nations Department of Economic and Social Affairs (DESA), World Economic Situation and Prospects, Briefing No. 163,’ 1 August 2022, https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/publication/Monthly_Briefing_163.pdf.
60 The Paypers, CBN Adopts Rewards Plan for Users of eNaira and Merchants, https://thepaypers.com/online-payments/cbn-adopts-rewards-plan-for-users-of-enaira-and-merchants--1258140#.
61 Xolile Mtembu, New experimental digital currency named Project Dunbar being tested by the South African Reserve Bank, https://www.iol.co.za/business-report/markets/currencies/new-experimental-digital-currency-named-project-dunbar-being-tested-by-the-south-african-reserve-bank-cc948c08-f7a2-4859-b84f-0cb741d8452a.
62 Atlantic Council, ‘Central Bank Digital Currency Tracker,’ https://www.atlanticcouncil.org/cbdctracker.
63 Eun Young Oh and Shuonan Zhang, ‘Informal Economy and Central Bank Digital Currency,’ Economic Inquiry Journal, (23 June 2022): 1–22.
64 UNCTAD’S B2C e-commerce index is calculated based on an analysis of individual countries’ internet usage, security, account ownership and postal reliability, which are ranked from zero to one hundred.
65 UNCTAD, Online Consumer Protection Legislation Worldwide, https://unctad.org/page/online-consumer-protection-legislation-worldwide.
66 Atlantic Council, ‘Central Bank Digital Currency Tracker,’ https://www.atlanticcouncil.org/cbdctracker.
Additional information
Notes on contributors
Renata Thiébaut
Renata Thiébaut is a professor at Gisma University of Applied Sciences. She holds a PhD in Law and was a researcher at Harvard University from 2018 to 2020. She has worked with governments and global companies advising on digital transformation.