Digital technologies offer a chance to disrupt this trajectory – unlocking new pathways for rapid economic growth, innovation, job creation and access to services which would have been unimaginable only a decade ago. Meanwhile, digital trade refers to commerce enabled by electronic means – by telecommunications and/or ICT services – and covers trade in both goods and services. Africa’s market share of the digital trade globally is small. But it has expanded rapidly, outpacing the global average.
For African economies, there is a genuine risk of being left behind and exacerbating the digital divide. There is a double digital divide among and within African countries. Digital development requires an intersecting set of policy interventions, international cooperation and support from Governments across the continent, in order to create an environment in which the digital economy can thrive. The foundation of this is connectivity – devices, electricity and internet access. Digital trade is one of the promising areas for the African Continental Free Trade Area (AfCFTA) and a factor of success of the African Union Digital Transformation Strategy (DTS) for Africa (2020–2030).
The Digital Trade Protocol (‘the Protocol’) of AfCFTA is a document intended to define the environment for digital trade between members of the African Union (AU). This refers to continental member states as well as island nations such as Mauritius and Madagascar. The rise of digital trade offers significant opportunities for Africa to boost growth, create better jobs and reduce poverty. Therefore, Africa has the opportunity to harness the digital economy as a driver of growth and innovation, but if it fails to bridge the digital divide its economies risk isolation and stagnation.
Facts & Figures
Between 2005 and 2021, global digital service exports increased by 40.52%, while Africa’s surged by 91.53%. This, coupled with low intra-continental trade, the presence of 11 of the world’s fastest-growing economies, and a young, digitally eager population of almost 1.5 billion, positions Africa as having the world’s largest untapped digital growth potential. The value of digitally delivered trade today is about $4.25 trillion but Africa has only 0.9% of it, according to the World Trade Organization (WTO). As a share of digitally deliverable services in total export services, digital trade represents 35% of total export services in Africa.
Digitally delivered trade 2024
- Global – $4.25 trillion
- Africa – 0.9%
Digital service exports 2005 – 2021
- Global – 40.52%,
- Africa – 91.53%.
The digital trade has increased across in all regions in the world and particularly in Africa since the beginning of the covid-19 pandemic in 2019. As a share of digitally deliverable services in total export services, digital trade approached, respectively, 35%, 68% and 72% of total export services in Africa, Europe and North America. However, the digitally deliverable services growth in Africa is inferior to world average over the whole period.
Digitally deliverable services (total export) 2019
- Africa – 35%
- Europe – 68%
- North America – 72%
In 2020, 24 per cent of firms received orders online and over 40 per cent of firms placed orders online. Uptake varies by firm size; on average, more than twice the share of large firms sells online compared with small firms.
Online orders – 2020
- Orders online by firms – 24%
- Firms placed orders online – 40%
With regard to consumers, an estimated 1.5 billion people, or 27 per cent of the global population aged 15 and older, shopped online in 2019. Among the 27 member countries of OECD for which data are available, the share of people shopping online increased by 5.2 percentage points in 2020. This was the greatest increase since records began in 2005.
Online consumers – 2019
- 1.5 billion people
Online consumers – 2020
- 5.2 % increase
In terms of economic value, total e-commerce is estimated to have reached $26.7 trillion globally in 2019, including both domestic and international transactions. The availability of reliable statistics on the share of cross-border e-commerce is limited; cross-border business to-consumer transactions are estimated to have accounted for around $440 billion of total business-to-consumer e-commerce sales at $4.9 trillion.
E-commerce – 2019
- $26.7 trillion
Cross-border B2C Transactions
- $440 billion
Cross-border B2C Sales
- $4.9 trillion
Around one in four online shoppers made cross-border purchases in 2020. However, business-to-business transactions account for the bulk (82 per cent) of e-commerce, yet the share that is international and therefore forms part of digital trade has not yet been determined.
E-commerce B2C Transactions -2020
- 82%
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*Sources: World Bank; World Trade Organization (WTO); United Nations UNCTAD; Trade Law Centre NPC (tralac); The Conversation; University of the Witwatersrand, Johannesburg.
