Page 26 - LUA May June 2024 for Website

SPECIAL REPORT

"A deep agreement with binding and
enforceable provisions could provide a
significant boost to continental integration
in general, and the digital economy in
particular. There are, of course, significant
challenges based on the different levels of
readiness to commit and implement the
provisions of the protocol. At the same
time, the AfCFTA digital trade protocol Our research at
could provide a guide as countries design GSMA shows that 60
their policies and institutions in line with
continent-wide efforts." percent of micro, 49
percent of small and
PAYMENT OPTIONS AND 33 percent of medium
E-COMMERCE BOOST
Despite the promising growth of enterprises use
e-commerce in Africa, payments remain social media services
a significant hurdle and cash transactions exclusively to sell
are prevalent, says Angela Wamola, Head
of Sub-Saharan Africa, GSMA, the mobile online versus online
industry association. "For our 2023 report marketplaces and
on e-commerce in Africa, GSMA Mobile their own websites.
for Development surveyed 1,500 micro,
small and medium enterprises (MSMEs) ANGELA WAMOLA
using e-commerce in six African markets: GSMA
Egypt, Ethiopia, Ghana, Kenya, Nigeria
and South Africa. As many as 43 percent of (What3Words) have rolled out national
MSMEs said consumers prefer to purchase says Dufay. "Ongoing efforts to streamline VPAS and start-ups are operating VPAS
in-person and the same percentage said the user experience and the continued services in many African countries. At
that they prefer cash. rollout of JumiaPay on delivery to increase the same time, to address the logistics
"MSMEs need to shift from cash cashless orders, positions JumiaPay as challenge, there are examples of digital
as a prominent payment method to a stronger enabler of the company’s innovations such as two-wheels ride
digital payments to improve cash flow, e-commerce platform. hailing apps, which use underutilised
reduce revenue losses and ease financial "We are focused on making JumiaPay assets such as motorbikes and bikes
management as well as enable data- a stronger enabler of our e-commerce and leverage partnerships with mobile
driven business planning. However, high platform. We are streamlining the user operators such as MTN for payments.
transaction costs, particularly for small experience to reduce processing times "However, infrastructure, addressing and
purchases, and Know Your Customer and the number of steps needed to logistics challenges still hinder the efficient
(KYC) processes for payments processing validate payment, and are in the process of movement of goods, particularly in rural
deter consumers with limited purchasing implementing this in Nigeria. We believe areas. Logistics networks also struggle
power from opting for digital payments. that over half of the transactions could be to meet the demands of e-commerce,
Trust is another huge issue for both cashless by the end of 2024." impacting timely deliveries. Overcoming
consumers and merchants. these supply chain hurdles requires
"Continuing to address these SUPPLY CHAIN CHALLENGES investment in infrastructure, improved
payment barriers is crucial to unlocking FOR E-COMMERCE IN logistics, and innovative solutions to
the full potential of e-commerce in AFRICA enhance efficiency and reliability."
Africa. Greater availability of mobile E-commerce in Africa faces various Jumia Logistics is serving as a
money, greater interoperability of supply chain challenges including powerful enabler of the e-commerce
payment systems, and offering recourse infrastructural limitations such as platform. "Our localised, integrated
mechanisms for fraudulent transactions unreliable road networks and inadequate logistics network is effective in harnessing
are key areas to prioritise to boost the addressing systems, says Wamola of the power of local partners to expand our
adoption of digital payments and enable GSMA. "We are seeing several digital footprint and drive commerce beyond
greater financial inclusion." innovations in addressing and logistics. major urban markets," says Dufay. "To
JumiaPay transactions in Q12024 For example, Virtual Postal Address improve network optimisation and reach
reached two million, an increase of 52 Systems (VPAS) exist and have been more underserved communities, we have
percent year-over-year driven by the implemented both in the private increased the number of pick-up station
successful rollout of JumiaPay on delivery sector and at the national regulatory deliveries. We are also improving our
in one of Jumia’s largest markets (Kenya), level. Ghana (AsaaseGPS) and Nigeria proprietary systems to drive scalability,

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