E-commerce: The answer to eradicate poverty in Africa?

Mwangi, a 32-year-old Kenyan man lost his job after 10 years in employment. With no idea on how start earning again, he resolved to go online and search for options. He had always desired to start a business but had little capital. Then a Jumia ad popped when he was doing his research, and a brilliant idea was born. With the little money he had, he purchased  African fabrics and started selling on Jumia. The rest, as he says, is history. But he got his life together and was now earning even more than he did from his job. Jumia, an e-commerce company has helped to eradicate poverty in Africa by providing many opportunities for vendors to sell online.

What is e-commerce and it’s impact on businesses?

With the invention of the internet, consumers became more available online. Internet World stats shows that in mid-2019, internet penetration in Africa was at 39.6%. It’s estimated that in 2020 there will be 500 million African mobile internet users. E-commerce means taking advantage of the internet to sell products.

The internet now connects a huge number of consumers to local brands, and Africa as a continent is not left out.

In an interview by McKinsey report, Sacha Poignonnec, the co-CEO of Jumia observed that African internet users want the same things as everyone else. Quality products at affordable prices. There’s high productivity because of e-commerce as most people now prefer buying items from the comfort of their homes and not visiting a physical shop.

Majority of Africans now shop online, hence it’s possible to create more jobs through the following methods.

  • Make data affordable to everyone.

African consumers pay more when it comes to internet access. According to a study by Alliance For Affordable Internet (A4AI), only 10 out of 45 countries have affordable internet.

If 1 GB mobile data does not cost more than 2% of an individual’s average monthly income, then data is considered affordable. In Africa it costs 7.12% of the income. Those who cannot afford data do not enjoy e-commerce

  • Reduce barriers to entry

In as much as e-commerce is all about making purchases online, most products have to physically reach consumers. Transport sometimes delays items, hence making buyers to lose trust in vendors. For overseas purchases, smooth clearance process and transportation make business easier, therefore more jobs and opportunities are also created in the process.

  • Digital skills training

Not everyone who can access the internet knows how to use it. E-commerce is a wide niche that requires skills training to thrive.  Training vendors and merchants on important skills such as digital marketing, copywriting and posting on the e-commerce platforms is vital . Unemployed youths with the required skills also benefit from opportunities for such jobs.

  • Improve access to funding

A big percentage of Small and Medium-sized Enterprises (SMEs) in Africa don’t have access to capital to expand their business. According to World Association of Investment Promotional Agencies (WAIPA), 90% of funds received for Africa e-commerce are concentrated in 5 countries-Kenya, Egypt, Morocco, South Africa and Nigeria.

This means there’s less access for other countries to make improvement and create more employment.

Bottom Line

While there are still a lot of arguments on the viability of e-commerce, it is possible to create a lot of opportunities through job creation and eradicate poverty in Africa . In 2025, the population of internet users in Africa will rise to 50%.  600 million Africans will use the internet, and contributing $300 billion to the continent’s economy according to McKinsey. This is a huge number which will make the e-commerce sector boom without doubts. Now is the ideal time to take advantage of this business sector and empower more people to employ themselves through e-commerce.

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