September 25, 2023

While digitalization has triggered the so-called “Fourth Industrial Revolution,” it has also exacerbated discrepancies in technological advancements between developed and developing nations, as well as urban and rural communities. Digital transformation has contributed to nation’s overall economic development with digital economies becoming a great contributor to growth in national Gross Domestic Product (GDP) and an upsurge in the importance of new business models, such as e-commerce and cross-border e-commerce.

At the global level, the World Trade Organization has taken steps to regulate cross-border e-commerce, establishing a dedicated ‘Joint Initiative on E-Commerce’ with over 80 members. Similarly, the United Nations has provided support, particularly to developing nations, through training and capacitation building, funding and other digitalization initiatives. eTrade Readiness Assessments led by the United Nations Conference on Trade and Development (UNCTAD) have identified challenges and opportunities to enhance e-commerce and provided policy recommendations to several governments, which will help understanding the current scenario in Africa.

Advances in infrastructure, logistics, online payment systems and favourable legislation suggest that further alignment could improve cooperation in cross-border e-commerce. Regionally, economic blocs have incorporated e-commerce related provisions aiming to create propitious environments that facilitate online business among and between their members. The Association of Southeast Asian Nations (ASEAN) has contributed greatly to the harmonization of laws to foster cross-border e-commerce and is regarded as the best practice on this topic as compared to other blocs in the global South. However, even within ASEAN, much can still be done, as was identified throughout the development of this paper.

Nationally, nations started incorporating e-commerce and cross-border e-commerce into their development agenda. Support from international organizations has provided them with additional guidance on the next steps to be taken. Tunisia, for instance, is one of the latest nations to have engaged with UNCTAD to further develop its digital economy through a series of programmes, which include the Easy Export initiative, Innovative Startups and Small and Medium Enterprises Project and amendments to its foreign exchange laws to enable e-trade.

This paper focuses on the African region because informal trade has grown in recent years despite constraints that have been identified. For example, in many African countries most online transaction payments are done through cash on delivery, and the delivery infrastructure particularly for cross-border e-commerce is not yet developed.

The African Continental Free Trade Area (AfCFTA), one of the latest agreements in the global South, promises to build economic strength in a market of over 1.3 billion people across over fifty nations. Efforts to advance trade relations among its members through e-commerce have the Digital Trade Protocol as its main pillar. However, unlike cross-border e-commerce provisions in other economic blocs, the Protocol does not have binding elements that offer a concrete roadmap for actionable results for market access.

The recommendations herein have as their main objective to suggest a progressive agenda to bolster cross-border e-commerce based on supra-national and national-level approaches. Proposed approaches include legal revisions to those policies that currently pose a barrier to cooperation, a simplified taxation scheme to be implemented by national customs bodies, implementation of a shared database containing country member e-commerce-related laws for easy access and knowledge sharing, and the future creation of an intra-bloc, online, cross-border marketplace that provides the necessary logistic services and digital payments for AfCFTA members.