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The State of e-commerce in Africa

ecommerce1While businesses coveted the relatively untapped African e-commerce market and saw tremendous opportunity there, Africa faced a number of troubling   obstacles to the development of e-commerce over the last decade.

These problems ranged from the technical to the social to the political. For instance, the continent was characterized by inadequate telecommunications and business infrastructure, structural inequality, a number of severe armed conflicts, political upheaval, massive public debt, and enormous health problems including the world’s gravest AIDS epidemic. Lastly, in both Internet advancement and overall economic activity, Africa was marked by severe internal economic inequality both within and between nations. South Africa was the clear standout in terms of national economic performance and e-commerce, while a few Northern African nations were performing respectably. However, the bulk of sub-Saharan Africa languished in dire poverty, and it faced a number of severe obstacles on the path to prosperity.

Still, businesses, investors, and policy makers generally weren’t sour on the prospects for African e-commerce. Rather, the debate centered on which issues needed to be addressed first so that African e-commerce could prove profitable and sustainable over the long term. Should the technical shortcomings be addressed so as to give later e-commerce programs a leg to stand on? Did the root lay in international financial tinkering so as to spur investment that would support e-commerce?

Was it incumbent upon African and international leaders to first focus their attention on relieving some of the dire social maladies faced by the African people, or was the development of e-commerce a means toward that end? By the early 2000s, there were no definitive answers to these questions, but various interests were pushing forward in all these areas.

Today we have a growing e-commerce industry that certainly has its issues.  However, these companies are positioning themselves well.  The companies that are able ensure mobile access to their portals as well as get consumers to feel comfortable with their brands prior to the market reaching critical mass will win in this market.  We’ve included some of the companies doing business on the continent and in the Diaspora in our Directory.

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    Ryan Shen-Hoover is the founder of InvestingInAfrica.net and co-manager of Kivuno Capital Management, LLC.

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    Alex Twinomugisha has extensive experience in ICT for Education and Development in the areas of planning, design, implementation and management.

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