Common market for eastern and southern Africa (COMESA) has taken to transform its 21 Member States into one single market of diverse opportunities that promote trade and investment in the largest Regional Economic Community in Africa.
COMESA’s ultimate vision is to be a fully integrated, internationally competitive regional economic community with high standards of living for all its people ready to merge into an African Economic Community. Moreover, it has a mission to achieve sustainable economic and social progress in all Member States through increased cooperation and integration in all fields of economic activity. This process can be fostered by applying e-commerce.
Digitalization continues to transform various aspects of our daily lives and has dramatically affected the world of trade. More products and services increasingly being sold over digital platforms known as electronic commerce or e-commerce. To build the capabilities needed for countries to take advantage of the transformations in commerce, policies implemented at national and international levels matter. In addition, COVID-19 pandemic has further accentuated the shift towards e-commerce as people and businesses had to transition to virtual platforms (UNCTAD, United Nations Conference on Trade and Development, 2021).
Globally, the United Nations and other international bodies are supporting e-commerce development, given its fundamental role in advancing the UN 2030 Agenda for Sustainable development and other international development goals (UNCTAD, 2017). E-commerce has the potential to accelerate the attainment of the 17 Sustainable development goals (SDGs). It can also promote the empowerment of women entrepreneurs and other traders, consistent with supporting SDG 5 on gender equality and empowerment of women and girls. Furthermore, e-commerce can support SDG 8 on creation of decent jobs and economic growth through promoting entrepreneurship and emerging jobs. There is potential to advance SDG 9 through e-commerce as it promotes innovation and integrates enterprises into value chains and markets. Additionally, cross-border e-commerce can significantly increase the exports of developing countries, accelerating the attainment of SDG 17. The immense benefits of e-commerce can also trickle down to other SDGs, including SDG 1 on ending poverty in all its forms everywhere.
There are several definitions of e-commerce. However, most global definitions are consistent with the organization for economic cooperation and development (OECD) e-commerce definition.
OECD defines e-commerce as “the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing orders. Payments and delivery do not have to be conducted online.” the definition excludes orders made via telephone calls, fax or manually typed email from being classified as e-commerce transactions (OECD, 2019). Before adopting the OECD definition, the World Trade Organization (WTO) Work Programme on Electronic Commerce defined e-commerce as ‘the production, distribution, marketing, sale and delivery of goods and services by electronic means (Ismail, 2020). The United Nations Conference on Trade and Development (UNCTAD) defines e-commerce as “purchases and sales conducted over computer networks” (OECD, 2019). At a regional level, the African Union Convention on Cybersecurity and Personal Data Protection define e-commerce as “the act of offering, buying, or providing goods and services via computer systems and telecommunications networks such as the Internet or any other network using electronic, optical or similar media for distance information exchange” (African Union, 2000).
As OECD,2019 illustrated, there are various models of conducting e-commerce. However, the typical business models include Business-to-Business (B2B), Business–to–Customer (B2C), Business-to-Government (B2G), Consumer-to-Business (C2B) and Consumer-to-Consumer (C2C).
The e-commerce market continues to grow at an unprecedented rate globally. E-commerce is expected to reach approximately $7.3 Trillion in sales, accounting for 24.5 percent of overall retail sales globally by 2025. E-commerce retail sales worldwide are predicted to increase by 120% between 2019 and 2025. By 2025, retail e-commerce share of total retail sales is expected to steadily increase by 24.5%.
E-commerce is growing across all regions, with North America and Asia leading in e-commerce penetration. While there has been traction in e-commerce in Africa, it has been growing at a slower pace than other regions. In Africa, e-commerce revenues have been increasing and are expected to reach $46 Billion in 2025, with Nigeria, South Africa and Kenya taking the lead.
This infant stage of e-commerce development in Africa needs COMESA’s interference of enhancement specially for the member states of the region. As I have mentioned earlier, being the beneficiary of e-commerce depends on the national, regional and international polices. Accordingly, COMESA can support the regions with the development of polices, strategies, technological infrastructure and management that can manipulate the e-commerce models.
In the Ethiopian context, e-commerce is the transaction of goods and services through the Internet or other information networks (The Electronic Transaction Proclamation No. 1205/2020). An e-commerce transaction should allow tracking of products/ services from ordering to delivery and accept diverse payment options and delivery methods either online or offline.
The Digital Ethiopia 2025 Strategy has identified e-commerce as a priority area for economic growth. Undoubtedly, digital transactions, including e-commerce, will play a catalytic role in driving the attainment of Ethiopia’s development goals and aspiration. However, Ethiopia’s e-commerce development is still at an infancy stage, with limited players and no defined e-commerce value chains across different sectors of the economy. Therefore, Ethiopia is on the mode of developing e-commerce strategy to provide a collective vision for e-commerce development and growth in Ethiopia and aims to facilitate B2C, B2B, and C2C by effectively leveraging shipment, cargo, airline, and other national capabilities.
The Ethiopia’s National E-Commerce Strategy which is being developed has three principal objectives. These are to Create an enabling environment from a policy, legal and operational perspective, promote e-commerce in the domestic, regional, and international consumer markets and ensure coordination and buy-in amongst critical stakeholders ahead of the implementation phase.
Furthermore, the strategy is premised on five goals: to increase private sector participation in the e-commerce sector, to increase consumer awareness, trust, and confidence in e-commerce, to promote exports and enhance forex earnings, to build the regulatory capacity of key institutions and to promote innovation in e-commerce.
More than ever, it has become fundamental for countries, particularly developing nations, to have clearly defined frameworks to support e-commerce growth, as demonstrated by the COVID-19 global pandemic in 2020. The government of Ethiopia has also identified e-commerce as an engine to propel economic growth and diversification. The e-Commerce Strategy aligns and is consistent with attaining the aspirations set out in the Homegrown Economic Reform Agenda, Ten Year Development Plan (2020 – 2030), National Vision 2025, 2025 Digital Transformation Strategy and further builds on the country’s existing trade policies and strategies.
The 2019 homegrown economic reform agenda acknowledges Ethiopia’s large population and market size as a leverage point for e-commerce development. Therefore, the E-Commerce Strategy aims to implement the following critical actions in the Homegrown Economic Reform Agenda (Federal Democratic Republic of Ethiopia, 2020):
Promotion of e-commerce and digitization of the financial and logistic sectors to support market expansion across the country and internationally, Improvements in the financial and logistics sector are required, including in e-payments, the national addressing system, and geospatial-enabled logistics modernization. Additionally, the strategy aims on enacting measures to accelerate the development of a digital payment ecosystem and promote e-transactions and introduction of policy and regulatory reforms to encourage investment and start-ups to drive e-commerce.
Thus subjects are proper with the COMESA’s regional agendas. With a moto of “growing together for prosperity”, COMESA offers a wider, harmonized and more competitive market, more harmonized monetary, banking and financial policies, greater industrial productivity and competitiveness. In addition, increased agricultural production and food security, more rational exploitation of natural resources and more reliable transportation and communication infrastructure are its pivotal offers for the region.
As its profile shows, the gross domestic product of COMESA is 851 billion dollars with a population number of 598 million. Its global export is 90 billion dollars whereas intra COMESA export is 9.7 billion dollars.
In order to further enhance these results and accelerate the success of its vision and mission, focusing on e-commerce is preferable and is a demand of digitalization season.
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