Digital Technology Breaking Intra-Africa Barriers In Trade And Communication
When thinking about the term “informal economy”, photos like these often come to mind.
However, what’s often forgotten is that the coming – and current – generation of Africa’s informal economy are millennial digital natives – people who are passionate, hungry for experiences, educated and exposed to global trends. They have online tools and resources at hand that weren’t available to the generations preceding them.
“Informal” doesn’t mean “on the streets” anymore, synonymous with vulnerable and marginalised, but equal opportunities and environments that can give Africans the chance to achieve their ambitions, and social platforms like Mpesa, Facebook and Instagram to make it happen.
Digital platforms are making trading easier by encouraging financial and social inclusion, and leads to domestic growth across the continent. The African Continental Free Trade Area (AfCFTA) introduced in May 2019, was signed by all but three of Africa’s fifty-five nations, and is the largest free trade area in the world since the World Trade Organisation’s establishment in 1995. AfCFTA covers over 1.2 billion people, and over $3 trillion in GDP (Gross Domestic Product).
World Bank statistics put intra-Africa trade at worth just $170 million in 2015, when the potential stands at trillions. The benefit of our growing population can help facilitate regional trade growth, especially since Africa is set to have the largest global workforce by 2035. Agreements like AfCFTA come at the right time to draw on this potential.
How does digital technology come into play here?
Agreements like AfCFTA are potentially “born digital” trade agreements. That means they can promote home-grown innovation by creating computer algorithms and templates to automate cross-border transactions, and accessible versions of computer-language versions of laws. All of this is not only helpful, but simple and cost-effective for businesses and people unfamiliar with trade and legal terminology (especially small traders) to understand parts of the agreement, and ensure they receive the benefits of AfCTFA.
The African youth will be the main beneficiaries of trade agreements like AfCFTA, where in the next five to ten years money will be predominantly more digital – especially for e-commerce and informal commerce.
To make these digital wallets inter-operable, where someone can send Congolese francs to a business they’re working with in Nigeria, and they receive it in Nigerian naira, seamlessly and securely.
While the idea of a standardised currency is far from reality, having digital wallets connected through blockchain currency isn’t, both in technology and regulations. This could give a major boost to intra-African connections, from jobs to e-commerce to digital marketing. You can check out our takes on the top digital marketing trends in Nigeria, Kenya, and other African countries too.
What does breaking intra-Africa barriers mean for entrepreneurs?
Access to a larger market. That’s why agreements like AfCFTA are important for entrepreneurs and businesses to understand, so that they know how it can affect and benefit their ventures. More awareness means better planning trade in businesses, all keeping these intra-Africa agreements in mind. If entrepreneurs and policy-makers can work together, the vision of a rapidly growing African Union with increased competitiveness, innovation and structure around how goods and services move can become a reality.
We don't think it's an exaggeration to say that it's an exciting time to be African. - Achieng Butler, CEO, Digital Odyssey
More than anything, this is a message to to the Africa youth, with a growing population of 1.2 billion, that Africa is now open for business. Digital Odyssey’s expertise in growth marketing and our deep understanding of the African market not only improves customer engagement on our clients’ websites and digital campaigns, it also results in measurable ROI.
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