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Can e-commerce reduce logistical challenges and costs faced by African traders? How?

The UNECA (United Nation Economic Commission for Africa) 2021 edition of the flagship publication, African Women’s Report: Digital Finance – A Pathway to Women’s Economic Empowerment in Africa, addresses the key challenges that limit the use of digital finance to promote women’s empowerment in Africa. Such challenges include the lack of an enabling environment for digital connectivity (as Africa has a lower rate of mobile and Internet usage compared to other global regions, despite mobile money services spread more than on any other continent), the shortage of prerequisite skills in digital and financial literacy (only around 12 per cent of women possess digital finance-related information and ICT skills, much below the global average) and the exclusion of women from conventional financial institutions and products (as only 33 per cent of them holds a formal bank account, compared with 43 per cent of men).

Despite these challenges, the report concludes that there are considerable opportunities for digital transformation in Africa, because political commitment to digital transformation is currently strong. Electronic commerce, in particular, is prominent in policy agendas across the continent. In addition to the African Union’s Digital Transformation Strategy for Africa 2020–2030, African States are also negotiating an electronic commerce Protocol to complement the African Continental Free Trade Area (AfCFTA) Agreement. The Protocol will regulate electronic commerce at continental level, including data and products to be traded under electronic commerce, and is expected to favour the development of African-owned e-commerce platforms at the national, regional and continental levels.

The UNECA report also notes that development of e-commerce within the AfCFTA legal framework can help to reduce the logistical challenges and the significant financial expenses faced by African traders because of the poor intracontinental transport links. Unfortunately, it does not reveal how. Although this aspect is not directly related to women's trade, as the report mentions the logistical and transport costs in Africa, it would have been interesting to analyse the impact that digital logistics solutions can have on these costs, as they offer today an important opportunity for improving transport in Africa, contributing to solve the problem of unbalanced trade flows between ports and the hinterland which plagues African trade.

A solution that e-logistics providers offer is that they facilitate the matching of the transport demand with supply. Today many cargo owners/shippers use e-logistics platforms in Africa to post offers of available load to which truck operators can access without any brokers or intermediaries. Apart from eliminating intermediation costs, such solutions allow transporters to better plan use of roads or time of transporting cargo, by deploying their fleet more efficiently.

E-logistics providers currently offering truck aggregation solutions are particularly numerous in Africa: TAI+ and Sendy, which are active in Kenya, Lori Systems, a cloud-based platform launched in Kenya and Uganda that is now used in other 8 countries in Africa, Truckr in Ghana and Kobo360, in Nigeria and Cloud-Fret in North Africa are some of them. All these platforms allow truck drivers to receive transport requests (sometimes through an app to be installed on their phones), and to select cargo to be transported according to its nature, volume, weight, and on the basis of pickup location and drop-off locations where their vehicles are available. Last but not least, these solutions bind transport companies to the price calculated by the platforms, so that traders will not be surprised by last-minute, unpredictable costs that inflate the final price of transport.

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