E-commerce should not be ignored
WITH the advent of Covid-19, the world is increasingly going digital creating both opportunities and challenges that call for changes to existing policies and adoption of new policies in developing countries such as Namibia.
One striking way that digitalisation is impacting our economies is through growth in e-commerce which according to UNCTAD’s latest estimates, global e-commerce sales in 2018 amounted to US$25.6 trillion, up eight percent over 2017.
A growing share of e-commerce involves cross-border sales and therefore contributes to international trade. For example, the share of the 1.45 billion online shoppers worldwide that made cross-border purchases, rose from 17 percent in 2016 to 23 percent in 2018.
The value of e-commerce and contactless payments has been accentuated by the current Covid-19 crisis, provoking actions by governments.
Much of this digital innovation is taking place in Africa and it’s time for Namibia to join this bandwagon and strengthen its e-commerce space that trails behind its peers in the region and beyond. In Senegal, the Ministry of Trade and SMEs is partnering with the private sector to facilitate delivery of essential goods and services through e-commerce. In Uganda, the Ministry of ICT has made a call to develop digital solutions in the fight against Covid-19 to support health systems and public service delivery.
Central banks and regulators in other parts of Africa have taken measures aimed at reducing transaction costs of electronic payments, boosting uptake of cashless e-government solutions, for example, for the provision of monetary transfers to the most vulnerable groups.
Digital solutions help reduce the spread of the virus by minimising the need for face-to-face interactions, and at the same time keeping some businesses from closing shop. And the digital world has served as a welcome palliative amidst prolonged physical distancing and self-isolation during the crisis.
This deepening in the digital shift has wide implications for trade and development. It is influencing the behaviour of people, businesses and governments, helping drive an unprecedented transformation of how goods and services are developed, produced, sold, distributed and consumed.
As more and more companies and consumers go online to find the products they are looking for, sellers need increasingly to have a presence on the internet. Otherwise they become invisible in the market.
What is also true is that technology is not deterministic. It is up to governments, in close dialogue with other stakeholders, to shape e-commerce and the digital economy by defining the rules of the game. This is a huge challenge that will involve adapting existing policies, laws and regulations, and/or adopting new ones in many areas.
Namibia’s digital divide, differences in readiness and the high concentration of market power all point to the need for policies and regulations that will help create a fairer distribution of gains from the ongoing process of digital transformation and increased reliance on e-commerce.
Digitalisation affects different countries in different ways, and individual governments require policy space to regulate the digital economy in order to fulfil various legitimate public policy objectives.
At the same time, several policy challenges may be more effectively addressed at regional or international levels. This applies, for example, to data protection and security, taxation and trade.
Finding adequate solutions requires greater international collaboration and policy dialogue, with the full involvement of developing countries. Indeed, any consensus will need to incorporate significant flexibilities to enable all countries to participate but Namibia can already start moving in this direction and follow some of its peers on the continent.