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The Ghana International Trade and Finance Conference (GITFiC) has called for digital infrastructure that will enable the Free Trade Area to address the scale for a billion people on the continent.
“An efficient digital economy can only be accomplished when the government and other stakeholders drive policies and solve basic infrastructural problems that can ease and drive down the cost and ease of doing business, strengthening digital infrastructure, promoting digital literacy, and making affordable high-speed digital technologies.”
This was part of recommendations GITFiC made in their April research on digital economy.
The research led by Gerald Ekow Woode said it was important to note that digitalisation was the lifeblood of business in the digital economy.
“Digitalisation is crucial to facilitating intra-continental trade, and consequently vital to the successful implementation of the AfCFTA.
“The lack of a common framework will continue to hinder the integration and optimisation of the imminent benefit of the trade agreement and the continent cannot afford to miss out on the immense prospect of a continental digital market and harnessing a global digital economy.”
The research said the digital payment system was an important component of intra-African trade, and the significant restrictions on cross-border payment in Africa made intra-African trading difficult or impossible.
“Many African nations, most notably South Africa, Kenya, and Nigeria, have taken the lead in innovative Fintech advancements that are challenging traditional banking and bringing previously ‘unbanked’ people into the mainstream economy.
“Mobile money has also taken off as the most cost-effective and efficient means for the unbanked to move money from one mobile phone to another and Mobile banking, as demonstrated in Kenya, has proved enormously beneficial to the national economy, enabling micro-level e-commerce.”
It said African leaders must see the nexus between digitalisation and trade and a comprehensive digital development strategy should address investment in digital infrastructure, complex cross-border internet regulatory concerns, bridge the digital divide and inclusion, and curtail prospective undesirable social and development effects.
It said beyond a digitalised framework, the success of the AfCFTA would be hinged on policies around addressing e-transaction and consumer protection, content restrictions and censorship laws, Intellectual property protection, Intermediary liability, and competition.
It said the implementation will see multi-national companies adopt a digitalised global trade with ease, trade more with Africa without fear of inadequate protection, and increase the intra-continent trade volume. A proper harmonisation of data protection and AfCFTA would create opportunities and a sustainable path for Africa’s youthful and growing population
“African governments will build digital businesses products and models not just for the continental market, but equally to expand and seek a global competitive advantage.”
The GITFIC said while the private sector would drive digital economic progress, trade policy decisions made by governments would have an impact and through the African Continental Free Trade Area (AfCFTA) accord, African policymakers could stimulate digital trade and the development of the digital economy.
“The underlying infrastructure, such as energy and telecommunications, is critical to the growth of the digital economy. The digital economy cannot thrive without solid foundations. Liberalising trade in these services will allow new players to enter the market and increase competition.”
It said the AfCFTA should also include accurate and convincing promises to ensure the unfettered cross-border flow of information, as cross-border trade in the digital economy was difficult without it.
“For example, not only physical but also digital components must be able to quickly cross borders in regional and global value chains, especially as manufacturing gets more complex. Other services could be liberalised and regulatory restrictions reduced to facilitate and encourage trade.
It’s also critical to identify and support people whom the digital economy has the potential to leave behind on a national level.
“Policymakers must discover measures to limit the developments’ harmful consequences. Although trade regulations are unlikely to impact the economy’s inevitable digitalisation, new opportunities offered by digital commerce, such as those in cross-border services, may provide fresh options for those who have been displaced by digital innovations. This will necessitate government initiatives based on evidence, as well as a commitment to reskilling.”
The GITFIC said the government would need to help local entrepreneurs build new business models by supporting the development of innovation centres.
“The Government of Ghana’s flagship programme, You-Start Initiative, is a good example of expanding e-government services and policies to make things like crowdfunding more accessible.”