Leaders at the 2024 Africa Trade Development Forum (ATDF) in Kigali
African leaders have been urged to have a single political will, voice and systems in digitalizing the continental trade ecosystem if the African Union (AU) is to achieve its goals by 2030.
The African Union’s Digital Transformation Strategy 2020-2030 aims to use digital technologies to promote Africa’s integration, generate inclusive economic growth, stimulate job creation, break digital divides, eradicate poverty, promote open data policies, Foster innovation but also inclusion in a secure and equitable environment towards sustainable development.
Despite this ambitious strategy in a fast growing digital world, and some digital tools uptake in regional trade blocs, the 2024 Africa Trade Development Forum (ATDF) showed that there are gaps in aligning policies, fragmentation in the area of trading goods and systems to allow Africa to have one digital business (trade) platform which is shared with all.
The forum also showed that despite the African Continental Free Trade Area (AfCFTA) adopting AfCFTA Digital Trade Protocol (AfCFTA DTP) in February 2024 only nine African countries have inked the protocol. These are Benin, Burkina Faso, Cabo Verde, Cameroon, Côte d’Ivoire, Gambia, Kenya, Mauritius, and Nigeria.
The digital economy holds great promise for economic development in Africa. In 2020, the International Finance Corporation and Google estimated that Africa’s digital economy could reach $180 billion by 2025, accounting for 5.2% of the continent’s GDP.
By 2050, the projected potential contribution could reach $712 billion, or 8.5% of GDP. Moreover, if African internet penetration rates could be increased to those of the Global North, the digital economy could add 140 million jobs and $2,200 billion to Africa’s GDP.
As one-third of the world’s population and workers will be African by 2075, investing in bridging the digital gap—especially by training youth and women—could also set up the continent as the world’s next major exporter of digital services.
PM Dr. Édouard Ngirente
Considering these facts, Rwanda’s Prime Minister Dr. Édouard Ngirente said that the Protocol marks a new era in regional integration. It offers great potential to increase connectivity, reduce barriers, and drive economic growth.
“To make this a reality, our countries will have to adapt to the ever-changing trade environment driven by emerging technologies. Therefore, investing in Africa’s digital and technological capabilities is not an option but a must,” Ngirente said while officially opening the ATDF2024 which is happening in Kigali from 2 to 3 December.
Ngirente said that Rwanda is advancing digital trade and digitizing cross-border operations through key initiatives. These include the Electronic Single Window which streamlines trade processes by integrating all trade-related activities into a single electronic platform.
Rwanda has also invested in the digitization of Government services through an online platform called Irembo.
This initiative has simplified access to Government services for citizens, saving time and efforts and improved the efficiency and effectiveness of public administration as well as service delivery to both citizens and businesses.
“We are also promoting digital literacy, e-governance, and sector specific digital solutions to increase production, foster sustainable economic growth and strengthen regional integration,” Ngirente said.
Wamkele Mene, Secretary General, AfCFTA said the fragmentation is not only in goods but also in the digital ways of doing business, thus a need for interoperability of customs services at border posts- which the Digital Trade Protocol intends to achieve.
“We also see digital fragmentation. So as much as we may say, here’s a One-Stop order post. The officials from two, three different countries are sitting physically in one room. But, the paperwork is a mountain of paperwork for them manually,” Mene said.
To make sure that as goods are transiting through borders, Mene suggested that there must be a single digital trade system to make sure that transit is efficient and cost effective and if need be copy from the one used in the EAC region (at Mombasa) to enhance trade within Africa but also consolidate a single digital market.
“Where we continue in the fragmentation of having digital economies on the continent, we are not going to succeed. I think the example of the East African community of how a region has deployed digital tools to leverage on the digital economy is something that the rest of the continent certainly should model,” Mene said.
However, Annette Mutaawe Ssemuwemba, Deputy Secretary General, East Africa Community Secretariat said though the EAC has deployed tools, has a working digital systems, connectivity, the reality on ground between some EAC borders is a stack contrast on how they do things, invest and use the digital solutions.
For instance, she said that there is need for business re-engineering of some digital tools (such as the electronic cargo tracking system and electronic single windows) to be more efficient because they were meant to be integrated to work effectively as one.
“if on the basis of these protocols that have been signed, we can re-engineer and create digital corridors when a digital corridor in East Africa works well, it will connect to another corridor all the way until we exhibit in West Africa,” Ssemuwemba said.
Hailemariam Desalegn Boshe, the TradeMark Africa (TMA) Board Chair and Former Prime Minister of Ethiopia said the problem is that even Africa’s policy and regulatory environment is still largely fragmented which makes it hard to have a single voice on trade therefore a need for political will behind digital trade and systems.
“When we think about Africa as a continent, I think it is hugely fragmented and we need to address that issue properly. If there is no political commitment and political action, I think we cannot make this happen,” he said, adding that there is a huge difference in African leadership thus a coherent and harmonized leadership, investment (infrastructure) and engaging private sector is needed for a single digital trade to happen in Africa.
Haytham El Maayergi, Executive Vice President, Global Trade Bank (Afreximbank) said that they are already making this possible through the Africa trade gateway which, with the collaboration of other banks and government, can ease the payments from one country to another without changing currencies.
