With groundbreaking protocols on digital trade and trade in services Africa is developing platforms for economic growth through increased intra-African trade, projected to rise from 18% in 2022 to 50% by 2030. Digital trade is anticipated to contribute 5.2% to Africa’s GDP by 2025, creating over 10 million jobs, particularly in the services sector. The continent’s digital economy is expected to expand from $115 billion in 2020 to $180 billion by 2025.
Nigeria is solidifying its position as Africa’s digital trade leader, driven by its thriving mobile economy, large internet user base, and rapidly expanding digital infrastructure. The country is working towards the ratification of the Protocol on Digital Trade to the AfCFTA Agreement and strengthening policy harmonisation to foster inclusive growth. With its market size, entrepreneurial drive, and digital momentum, Nigeria is well-positioned to spearhead Africa’s digital trade revolution.
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Challenges in Digital Trade Across Africa and Solutions
Despite the potential of Africa’s digital economy, several challenges hinder its growth. Regulatory fragmentation, inconsistent standards, limited access to financing for digital service providers, and a lack of digital inclusion persist. Additionally, inadequate infrastructure, connectivity deficits, and a digital skills gap further impede progress. Cybersecurity threats, including data breaches, undermine trust in digital trade transactions, necessitating stronger security frameworks.
To mitigate these challenges, various initiatives are being implemented. The AfCFTA is harmonising regulations and standards across the continent to facilitate digital trade growth. Initiatives such as Afreximbank’s Pan-African Payment and Settlement System, the African Development Bank’s Digital Africa initiative, and the World Bank’s Digital Economy for Africa programme aim to enhance digital infrastructure, improve digital skills, and promote inclusion. Furthermore, cybersecurity measures, including the African Union’s Cybersecurity Convention, are being enacted to safeguard digital transactions and bolster confidence in digital services.
A Roadmap for Implementation of Digital Trade
The AfCFTA Agreement and its protocols on digital trade and trade in services offer a transformative opportunity to accelerate cross-border trade through Africa-focused solutions. To capitalise on this potential, African states must prioritise regulatory frameworks, ensure alignment between national strategies and the AfCFTA Protocol on Digital Trade, and engage in multi-stakeholder collaboration.
To unlock the full potential of digital trade, African governments must ratify and domesticate the Protocol on Digital Trade, ensuring vertical regulatory alignment at national and regional levels. Additionally, they should enhance public digital infrastructure, develop tools for a digital marketplace, and promote inclusion for MSMEs and underrepresented groups to foster innovation.
Multi-stakeholder collaboration is essential. African states should forge strategic partnerships with the private sector, the AfCFTA Secretariat, regional organisations, and development partners to mobilise resources, harmonise policies, and improve access to finance. By implementing these measures, Africa can leverage digital trade to drive economic growth, create sustainable jobs, and alleviate poverty across the continent.
