E-commerce trends in Angola
E-commerce is fundamentally tied to the development and expansion of internet-based technologies. As such, e-commerce market size in a given country, is dictated by the depth of penetration and widespread access to the internet in that country. Unsurprisingly, e-commerce is substantially bigger in developed countries. However, it is also rapidly growing in emerging economies, boosted by the major growth of mobile broadband that is occurring many emerging economies.
Mobile broadband is experiencing a particular boom in African countries, where the relatively cheaper and easier infrastructural development needed to support mobile networks is offering a means of bypassing the challenges of traditional hardwired broadband access. Consequently, countries like Angola, are undergoing significant mobile broadband growth.
In order to effectively channel that increased broadband access and capacity into e-commerce market growth however, various other challenges must be overcome. In particular, analysis of e-commerce readiness: the ability to utilise ICTs for the benefit of an economy, suggests that African countries in general, remain underprepared. Under the auspices of the UN Economic Commission for Africa (ECA), Southern African Development Community (SADC) members have taken measures to develop a unified approach to assessing and improving sub-regional e-commerce readiness. Angola in particular appears to be embracing those goals. Where South African remains the dominant continental actor in terms of e-commerce, Angolan efforts to spur e-commerce growth appear to be paying off.
E-commerce readiness refers to the ability of a country to support and facilitate the growth of the e-commerce sector. At a Commerce Readiness Study for the SADC sub-region mid-term review meeting, held on the 16th and 17th of April 2012 in Mauritius, a ‘Methodology and Roadmap’ presentation identified the following key domains for considering e-commerce readiness:
- State of Infrastructure
- Legal/Regulatory institutions
- Trust, Confidence, and Security of e-commerce
- E-readiness at firm or Small and Medium Enterprise (SME) levels
- Human Resources
Speaking at a two-day mid-term review meeting of the SADC study on e-commerce in Luanda, Angola in January 2012, (prior to the Mauritius meeting) Cecilia Mamelodi-Onyadile from the SADC Secretariat noted that, “the SADC e-commerce strategy will empower SADC member States to be part of the global marketplace 24 hours a day and will make the SADC sub-region more competitive and generate a new stream of foreign exchange. This can happen for the average person selling traditional crafts or a large online store.”
The Minister of Telecommunications and Information Technologies of Angola, H.E. Dr José Carvalho da Rocha underscored the need for all SADC member States to create the required enabling environment to support the SADC e-commerce strategy and its effective implementation. Da Rocha highlighted the deployment of affordable basic Information and Communication Technology (ICT) infrastructures, the promotion of adequate legislation, the development of ICT-skilled human resources, as well as supporting SMEs to embrace e-commerce.
Broadband licenses, infrastructure development by Angola
Where the ECA’s SADC sub-region e-commerce readiness initiative appears to have lost some steam with regards to a lack of recent meetings, the Angolan approach to e-commerce readiness and development appears to have continued on the track identified by its Minister of Telecommunications and Information Technologies.
Paul Budde Communication published a comprehensive review of the state of telecoms in Angola, in October 2013. Highlighted in this report, were key development milestones, including: the landing of an additional international submarine fibre optic cable; the planning of further development in terms of national fibre backbone networks; the restructuring of Angola Telecom; and efforts towards granting a third mobile license. These developments all point toward a concerted effort by the Angolan government to strengthen its domestic broadband capacity, further reflected in significant investments budgeted between 2013-2015 for further infrastructure improvements. The BuddeComm report estimated a Market Penetration rate for Mobile internet access at 71% by the end of 2013. That infrastructure investment, and especially, the high levels of mobile broadband penetration, bodes particularly well for e-commerce in Angola.
The challenges of payment in e-commerce platforms
Where sufficient infrastructural capacity is vital for enabling the development of e-commerce markets, an equally vital aspect of e-readiness, is the facilitation of the necessary accompanying financial legislation and regulation. In particular, such institutions are key to encouraging banks to accept and participate in e-commerce. In recent years, efforts in this area appear to have been heading in the right direction.
E-commerce appears on track to support the massive consumer boom that has resulted from high economic growth rates across the continent‚ according to Robin Philip of payment services provider PayGate: “A year ago (2012) we said e-commerce in Africa wasn’t ready for take-off yet‚ largely because there weren’t enough banks to make the system work. The lack of business infrastructure was a real brake on development…”
The 2012 ECA meetings on e-commerce readiness noted these challenges. Proposals were made for the passing of e-transaction, cyber-criminality, personal data protection, and consumer protection laws and reforms in the various banking sectors. Moreover, the integration of e-commerce requirements including e-signature and authentication, mobile-banking e-payment and e-transfer were suggested. These measures appear to be paying off. According to Philip: “Established banks in many African countries now had a much better understanding of e-commerce and an appetite for it … Once a bank is open for e-commerce business‚ they can attract a lot of business.”
E-commerce market development offers substantial economic potential to developing countries in general. In the African context, this may be especially true. Angola appears to be one of the leading SADC countries in taking serious measures to facilitate the growth of its own e-commerce market.
For more, see:
- ‘Experts meeting to review e-commerce readiness of SADC member countries started’, ECA Press Release No. 04/2012. Available at: http://www1.uneca.org/TabId/3018/Default.aspx?ArticleId=64
- Mochiko, T., ‘E-commerce poised to support Africa’s massive consumer boom’, Bizcommunity.com, 4 July 2013. Available at: http://www.bizcommunity.com/Article/7/394/95995.html
- ‘Angola – Telecoms, Mobile, Broadband and Forecasts’, Paul Budde Communication Pty Ltd – available through Research and Markets (paid access). October 2013. Available at: http://www.researchandmarkets.com/research/qqwwj3/angola