recommendations to realize the potential of African e-commerce 5

According to IPAR, an institute for analysis and research on public policies in Rwanda, the process of digitizing economic activities must be facilitated and simplified This advice applies to other countries in sub-Saharan Africa

About

Idriss Linge is a Researcher at the Tax Justice Network, and a journalist working with the Ecofin Agency, a media agency specialising in financial and economic issues with a focus on Africa

He has been interested in questions surrounding tax for several years, which began when he analysed questions of taxation for a better distribution of mining revenues in his country, Cameroon, on behalf of civil society Idriss is also the producer the French-speaking Tax Justice Network podcast Impôts et Justice Sociale and is the author of several reports on taxation and illicit financial flows in Cameroon

In a little publicized report on the role of e-commerce in the postCovid 19 economic recovery, the IPAR-Rwanda institute made 5 recommendations which, from its point of view, would allow this sector to keep all its promises.

The first concerns a review of fees paid on financial transactions via mobile phones. According to the analysis, more affordable prices would encourage more people to make purchases through digital channels. A start, according to the analysis, would be to make fees free on small amounts.

The second piece of advice is to put in place public policies favorable to the acquisition and use of smartphones. In the specific case of Rwanda, the institute believes that this approach would make the current plan, which consists of connecting agricultural producers in Rwanda, more coherent. But the only acquisition of smartphones will not be enough, it will also be necessary to educate the population to use them.

It is also a question of initiating discussions on Internet tariffs Although Rwanda offers some of the lowest tariffs in Africa, for people living in rural areas, accessing technology remains an economic challenge The development of new connectivity solutions does not help matters, because investments in 4G are recent and require amortization for the companies that operate them IPAR believes that a support system for people in rural areas is an approach worth exploring

The last two recommendations relate to the expansion of exports via e-commerce, reducing the burden of formalities and providing support to the small and medium-sized enterprises concerned IPAR-Rwanda's recommendations have been supported by a comprehensive cost-benefit analysis for Rwanda's economy But the questions raised are applicable to several countries in sub-Saharan Africa, excluding South Africa

According to the most recent report of the GSMA (association of mobile operators) on the regulation of the telecommunications sector, African public policies have, in recent years, taken too many decisions likely to slow down the expansion of business around digital. In several countries of the region, in fact, governments find in mobile money an opportunity to mobilize tax resources. At the end of 2021, the question was debated in Cameroon where a 0.2% tax was imposed on the amounts transferred, and also in Ghana where the question even gave rise to a fight between parliamentarians.

However, despite its acknowledged rapid development, mobile money in Africa is far from having exhausted all of its growth potential. According to cross-data, made public in 2020 by Google and the World Bank, the potential for ecommerce in Africa will be $700 billion by 2050.

To this must be added that national and international transfers by mobile, deposit/withdrawal operations, as well as the payment of various fees and taxes for private or public services, should further inflate these potential volumes.