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Mobile Commerce in Africa: Growth, Opportunities and Challenges

A report from the UK International Trade Department (DIT) highlighted the immense potential of mobile commerce in Africa and its ability to contribute to the economic transformation of the continent.

The report Towards a thriving digital economy for all – Spotlight on Africawhich was launched at a thought leadership breakfast on the sidelines of Mobile World Congress 2022 in Barcelona, ​​has been prepared in partnership with Mobile World Live and examines the various challenges and opportunities around the sector in emerging markets, in particular in Africa.

In his welcome address, Mike Freer, UK Minister for Exports, observed that digital trade is at the heart of global growth and is expected to account for half of all trade by 2050. He said the UK is a champion of digital trade and highlighted the Digital Economy Agreement, the first of its kind in Europe, which demonstrates his government’s commitment.

The UK wants to work with countries in Africa to boost digital trade and in 2019 set out a wide range of common priorities with the African Union. Since then, the UK has backed projects in countries like Ivory Coast and Uganda to the tune of some £2bn ($2.6bn) to improve digital trade.

At the UK-Africa Investment Summit in 2020, the UK further pledged to create business support trade to boost trade between itself and Africa. It has built a digital gateway to connect the UK and Africa and also provide trade, finance and investment support.

Freer noted that m-commerce has created many successful businesses around the world and hoped the paper would stimulate discussions on how to improve the landscape and give m-commerce a boost to thrive in Africa.

Growing interest in mobile commerce

Providing an overview of the report, Mike Short, Chief Scientific Adviser at the UK Department for International Trade, revealed that e-commerce volume is expected to grow from $3.3 trillion in 2019 to $7.4 trillion by 2025. Of this amount, only $180 billion was generated in Africa, showing that there is room for growth on the continent.

He said the report showed growing interest in mobile commerce on the continent, with around 500 fintech companies operating, while several tech hubs have also sprung up to support them.

However, the report also showed that there are disparities in usage, with low uptake in rural areas in particular, masked by impressive uptake figures, while there were still large numbers of users. users are still using second and third generation handsets, which can hinder access to the full range of digital services.

Similarly, the report shows that while there are some 562 million registered mobile money users on the continent, generating some $495 billion in transactions, only a quarter are considered highly active.

Other challenges identified are the lack of robust identity and addressing systems that engender trust in the digital economy. However, the report shows that there is growing enthusiasm for mobile commerce, with customers spending an average of £30 ($39) on purchases.

Addressing systemic issues such as affordability is expected to provide further momentum to the sector.

Round tables

The report was well received by stakeholders at two roundtables following the presentation.

How can regulators, MNOs and other mobile technology industry players work together to develop a mobile commerce environment conducive to the advancement of digital commerce?

Panelists: Mr. Lacina Koné, Managing Director and CEO, Smart Africa; Shameel Joosub, Group CEO, Vodacom; and Sitoyo Lopokoiyit, Director of Financial Services, Safaricom and Managing Director, M-Pesa.

Shameel Joosub noted that connectivity, especially in rural areas, was one of the challenges facing mobile network operators on the continent and said that Vodacom has come up with several innovative ways to meet the challenge, including broadcasting signals from space and from balloons.

He welcomed partnerships with other organizations to increase coverage, which would enable more people to share in the benefits of the digital economy. To respond to smartphone access, Vodacom has also put in place systems to increase penetration while minimizing bad debts, for which it is also open to partnerships.

He called for more innovation to enable more small players to integrate their products and services into online platforms that would enable them to reach customers beyond their geographies and for training and support of local merchants to enable them to take advantage of digital tools to grow their businesses. .

Lacina Koné observed that regulations are more of a barrier to m-commerce than to access to finance. He said regulators need to adopt adaptive methods and pointed out that if M-Pesa had waited for regulators, it would never have taken off.

He lamented the worrying trend of governments taxing mobile money services, which would discourage usage and jeopardize mobile commerce. To address identity issues, he suggested that mobile phone numbers could be used as unique identifiers for customers who don’t have other forms of identification.

Smart Africahe said, launched the Smart Africa Trust Alliance which will provide a cross-border trust system that will provide basic consumer information that will enable them to access digital services when crossing borders in Africa without going through all due diligence procedures in Africa. the new country.

He said Smart Africa is partnering with Pan African Payment Settlement Systems to boost cross-border payments and ensure that more payments are processed within Africa’s borders without relying on external systems such as SWIFT.

Sitoyo Lopokoiyit said mobile money services were in partnership with banks, pointing to the fact that of the 40 million bank accounts in Kenya (up from 4 million in 2007), almost 90% were opened through M-Pesa .

He said it was great to see so many fintechs coming to Africa and that more growth and interoperability would benefit consumers. He revealed that M-Pesa has identified 2.6 million businesses on its network and has separated business wallets from personal wallets, allowing it to develop specific products for different categories of customers using the network.

Mobile money systems facilitate $8.5 billion in transactions between customers and micro, small and medium enterprises in Africa every month, while international remittances account for $3.5 billion.

In partnership with the British High Commission, the United States Agency for International Development and the World Food Programme, M-Pesa helped extend aid to some 2.5 million families facing starvation during the pandemic, which would not have been possible without it.

Investing in the digital infrastructure of the future

Speakers: Rupert Daniels, Director (Digital, Education, Creative, Consumer & Sport), UK Department for International Trade; Chris Sheldrick, co-founder and CEO of what3words; and Nicole Klingen, Acting Director and Practice Leader for Europe and Central Asia, Digital Development, World Bank

Nicole Klingen said digital development is key to post-pandemic recovery and observed that countries, cities and businesses that had invested in digital technology had done much better during the pandemic than those that had not. not done.

She said adoption was as important as the infrastructure itself, and people needed to be confident that their data and privacy were protected when adopting the technology. She observed that the lack of mobile money in Latin America, for example, had hampered social security payments during the pandemic, leading to the adoption and application of the Bank’s digital economy plan. for Africa to other parts of the world.

The World Bank, through the International Finance Corporation, has invested $5.6 billion in digital economies over the past fiscal year and is committed to supporting the creation of an enabling environment for cross-border digital trade and consolidation of trust systems.

Chris Sheldrick explained how what3words enables digital addressing systems through its innovative system, which has demarcated 57 trillion locations of 3 x 3 m each, which can direct e-commerce or emergency services to exactly where they are needed .

This system means that consumers can take control of the addressing system and not have to wait for government bureaucracies to develop street and property addressing systems in places where they are not already present. He said the addressing system is already available in 50 languages ​​and the company is working to increase the number of languages ​​so more people can use it in a language of their own.

Rupert Daniels, director of digital, education, creative, consumer and sport at DIT, observed that the UK has the second highest volume of e-commerce investment in the world, which means there is a lot of innovation, creativity, knowledge and experiences he can share with others.

DIT therefore seeks to foster partnerships with countries and businesses in Africa to enable more robust use of digital tools and platforms to drive economic growth.

He said that with the right identity and trust systems in place, businesses in the UK and around the world can pave the way for a bright new future of digital trade, economic growth and development.

To download Towards a thriving digital economy for all – Spotlight on Africa, please visit

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