Welcome to the April edition of the EFA Newsletter
This month we will concentrate on the issues raised at the 3rd Annual Ecommerce Week held by the United Nations Conference on Trade and Development (UNCTAD) in Geneva from the 16 – 20 April. Both our Co-Chairman, Dylan Piatti, and I attended the Week of panels and intergovernmental meetings.
The event attracted more than 1,200 participants from over 110 countries and more than 180 private companies. EFA hosted a highly successful panel session, “Africa and the ecommerce potential” on theThursday, and Dylan and I sat on a number of different panels during the week.We also met a wide range of experts and government representatives including government and businesses from 18 African countries, which will greatly strengthen EFA’s outreach capabilities to the rest of Africa.
Unfortunately, due to travel arrangements, neither of us were able to attend the South African Government panel in the first morning on “An African digital structural transformation”, however, it was good to see that South Africa was, for the first time, represented by government and business. Previously SA had not been represented at all.
The main concerns expressed by business during the event were – consumers’ lack of trust in online payments; increasing concerns over privacy issues (see below); security and online fraud; problems caused by the over-lapping mandates of multiple ministries (particularly in the developing countries), and challenges in cross-border ecommerce, including tariff and non-tariff barriers. There was a session by the courier companies (‘Fostering effective trade logistics’) but most delegates had no problems with consumer trust on delivery except a few African countries, including ourselves.
There were a number of inter-governmental agreements to encourage ecommerce, particularly in the developing world (eg ‘Fostering development gains from domestic and cross-border ecommerce in developing countries’), and a global agreement to improve official data on ecommerce, including B2B and B2G (business to government).
eTrade For All
This initiative was launched at UNCTAD’s ministerial conference in Nairobi in July 2016. “eTrade for all” become operational on 25 April 2017 when the online platform was launched, and in just one year, has delivered impressive results, delivering on its promise to make ecommerce more inclusive, by bringing partners closer and offering increased and more transparent opportunities for collaboration.
Dylan and I met with the UNCTAD Secretariat to discuss how best to cooperate and benefit from the programme. At present there are 29 official partners and an additional 30 contributors, and we were told that there is more emphasis on cooperation with business. We have been put in touch with the African Business Forum which coordinates the initiative for this continent. The Programme is well funded.
The most visible outcome has been a major spin-off, the UNCTAD Rapid eTrade Readiness Assessments, which diagnose the opportunities and challenges for ecommerce in least developed countries, providing a road map for moving ahead. A total of 7 assessments have already been carried out, and the latest 3 (including Liberia for Africa) were showcased during the opening session of the ecommerce Week.
The novelty of ‘eTrade for all’ is that it connects those in need of assistance with those that can provide it, and by offering a clearer picture of countries’ needs to donors, the programme is making ecommerce development work more effective. The newest tool, called MyeT4a, will allow for even closer interaction among partners and potential beneficiaries. Improved effectiveness is key to increasing e-commerce uptake in many countries, especially the least developed, so that their citizens can also benefit from the huge opportunities offered by the $26 trillion industry, according to UNCTAD’s latest estimates.
Ecommerce in Africa
Much discussion on the panels and in the inter-governmental meetings was given over to how best to develop ecommerce in Africa. In one of the keynote presentations Ms Omobola Johnson, former Nigerian ICT minister, pointed out that there are tens of millions of small businesses in Africa, yet they barely contribute to gross domestic product (GDP).
Digital platforms could change that by providing access to markets and to finance. In addition to providing the infrastructure to access markets beyond their community, digital platforms can help bring small businesses into the formal economy and get them access to much needed finance. Ms. Johnson said that developing countries have the advantage of being able to learn from the mistakes more advanced economies made while building their digital economies.
In discussions with the African Union (AU), the World Trade Organisation (WTO) and UNCTAD representatives, we were told that there are plans to hold at least one high level pan-Africa conference on ecommerce (Mombasa was mentioned as the possible venue) before the end of the year, and that EFA would be invited to partner that event. Please let me know if you would be interested to work with us on this (email@example.com ).
The EU commits to help Africa develop ecommerce
In another keynote speech, the EU’s digital economy and society Commissioner, Mariya Gabriel, said that the European Union is dedicated to helping Africa build a single digital market and help unleash the transformative power of ecommerce on the continent.
She pointed out that information and communications technologies (ICTs) have boosted economic development worldwide, with estimates showing that, for example, a 10% increase in internet access gives a 1.2% push to per capita gross domestic product (GDP). Getting more people affordable and reliable connections in Africa, where broadband penetration is as low as 16% in some parts of the continent, is key to growing the economy and fighting poverty.
Better connectivity will also be an important step to increasing the ICT sector’s contribution to Africa’s GDP, which currently stands at just 5%. The African Union aims to triple this figure by 2040.
The EU Commissioner said “The digital revolution has changed the way we manufacture goods, provide services, buy products, obtain information and interact with each other. Creating a single digital market was the EU’s response to the challenges posed by the digital transformation in our society and in our economies. However, as you know, the digital revolution doesn’t stop at the borders of the EU. Our expertise and our experience can be put to the benefit of development cooperation between the EU and Africa.” She added that the digital economy was identified as a priority during the November 2017 European Union-African Union Summit in Abidjan, Côte d’Ivoire. EU funds will be put aside to realise this ambition, she concluded.
Facebook to fund a new cybercrimes initiative
When trying to sell a poster on OLX I have just met a scam, where the “buyer” supposedly sends me money on Paypal and asked me to pay a shipper to forward the poster to her cousin in the UK (a quick call to Paypal verified that no money had been transferred). So, the following initiative by Facebook caught my eye.
Facebook has partnered with Digify Africa to host Internet safety training sessions for a 1,000 13- to 18-year-olds at 8 youth clubs and more than 50 high schools across SA in the next 2 months. The programme aims to teach young people how to keep themselves safe online. Topics include understanding your digital footprint; Facebook community standards and core policies around hate speech, bullying, harassment, nudity and self-injury; the importance of reporting; privacy settings; and identifying false news and fake profiles. The lessons and resources will also be put online, so teachers not part of the selected schools can run the course.
Facebook continues to face serious questions about its role in handing out data
Meanwhile, readers will have seen Mark Zuckerberg being grilled mid-April by the US Congress Select Committee on how over 70 million (last count) people had their data leaked to Cambridge Analytica, which has played a very questionable role in both the UK’s vote to leave the EU and Trump’s election victory – plus interference in a number of other elections, including at least 2 in Africa.
This has concentrated people’s concern on the safety of their data, particularly when transacting online. As readers know, the EU’s General Regulation on Data Protection, which includes some extra-territorial rules on how European data can be processed outside the EU, comes into effect on 1 May. Watch this space as the Europeans start to take on Facebook.
The European Union introduce new rules for ecommerce platforms
The new EU rules will: – increase transparency by requiring that providers of online intermediation services must ensure that their terms and conditions for professional users are easily understandable and easily available. This includes setting out in advance the possible reasons why a professional user may be delisted or suspended from a platform. E-Platforms also have to respect a reasonable minimum notice period for implementing changes to the terms and conditions. If a provider of online intermediation services suspends or terminates all or part of what a business user offers, it will need to state the reasons for this.
In addition, the providers of these services must formulate and publish general policies on (i) what data generated through their services can be accessed, by whom and under what conditions; (ii) how they treat their own goods or services compared to those offered by their professional users; and (iii) how they use contract clauses to demand the most favourable range or price of products and services offered by their professional users. Both online intermediation services and online search engines must set out the general criteria that determine how goods and services are ranked in search results.
In addition, providers of online intermediation services are required to set up an internal complaint-handling system. To facilitate out-of-court dispute resolution, all providers of online intermediation services will have to list in their terms and conditions the independent and qualified mediators they are willing to work with in good faith to resolve disputes. The industry will also be encouraged voluntarily to set up specific independent mediators capable of dealing with disputes arising in the context of online intermediation services. Finally, associations representing businesses will be granted the right to bring court proceedings on behalf of businesses to enforce the new transparency and dispute settlement rules.
The EU proposes to set up an Observatory to monitor the impact of the new rules: The Observatory would monitor current and emerging issues and opportunities in the digital economy, with a view to enabling the EU Commission to follow up, and depending on the progress achieved and the insights gained through the Observatory, the EU Commission will assess the need for further measures within 3 years.
SARS completes its paperless processing of imports/exports
SARS has introduced an electronic cargo system that tracks the movement of cargo coming into and leaving the country, which brings to an end one of the last remaining paper-based processes for customs. The new electronic reporting system will expedite the processing of legitimate trade and improve the management of risk for goods coming in and leaving the country.
SARS points out that one of the benefits to trade of electronic cargo reporting is that it will save on costs involved in paper reporting. Presently carriers spend hundreds of thousands of rand a year on the paper and administrative costs associated with submitting paper manifests to SARS offices. Whether the new system will reduce the delays at the frontiers is to be seen.
As we all know, the electricity meter has been the centrepiece of any energy utility company’s relationship with its consumer. A contract is set up with the consumer to provide energy, and the meter is read to determine how much energy has been used. The utility company then bills the consumer according to usage. Unless something – a billing query or outage, for example – compels the consumer to contact the utility, the bill sent to the consumer is the only touchpoint the utility company would have with them. However, in a smart city environment with the advent of smart metering systems and the rise of powerful technology platforms and tailored software solutions which incorporate advanced analytics, big data, machine learning and AI, this interaction is evolving in exciting ways.
Energy utilities like ESCOM will be able to continuously to collect and analyse data from smart meters, and sensors to determine and monitor the health of infrastructural assets. This is creating new opportunities, for example, all of the data can now be collected into a single IoT platform. Linking this to advanced predictive analytics capabilities enables utilities to manage key assets within its value chain, driving down maintenance costs and optimising customer satisfaction through the uninterrupted supply of power. And when energy consumption levels exceed supply, utilities can better communicate with major consumers of energy and incentivise them to reduce consumption, thus avoiding outages.
Energy consumers are further empowered by gaining real-time visibility of their useage, allowing them to manage energy consumption better at a business or household level.Both Johannesburg and Cape Town have expressed the wish to become “smart cities” within the next 5 years.
E-payment Challenges for global ecommerce
The World Trade Organisation (WTO) has issued a draft white paper on this issue, which inter alia proposes to use the General Agreement on Trade & Services (GATS) to address the variety of national regulatory concerns identified in the paper, including opaque regulatory and licensing criteria/procedures; discretionary and unpredictable means used to approve financial services, and the absence of any dispute resolutions systems (please let me know if you would like a copy firstname.lastname@example.org ).
Retailers in the USA embrace Artificial Intelligence (AI) – or else
Traditional retail giants are entering the Big Data and AI space to keep up with the likes of ecommerce of Amazon and Alibaba, both of whom are leveraging big data and powerful AI algorithms to transform the retail space.
In addition to fierce competition, the need for a change in strategy is being underscored by the record rates at which many US retailers are shutting down. In 2017 alone, 21 retail chains applied for bankruptcy, including high-profile names like RadioShack, Toys R’ Us, and Aerosoles. Meanwhile other retailers like Macy’s and Sears announced they will be shutting down hundreds of stores across the USA.
The question is being asked – is this the beginning of the end of the American mega-mall shopping centres?
News from Egypt
Egypt is now looking to the future of commerce by backing a far-reaching strategy that aims to double the number of businesses selling products and services online by 2020. UNCTAD’s National E-commerce Strategy for Egypt was presented in Geneva during E-Commerce Week as a best practice example of how developing country governments can work with intergovernmental and private sector partners to plan for an “e-commerce ecosystem” that boosts growth, skills and jobs.
Finally, some global figures on ecommerce
To conclude this edition of the Newsletter, here are some global stats from the World Trade Organisation: between 2013 and 2015, ecommerce grew by 38%. Only 10% of e-commerce is business-to-consumer. Of that 10%, only 7% – so 0.07% overall – is crossing borders. The rest is domestic. Most ecommerce is either BtoB or BtoG. Given the increase in e-government worldwide, the increase in BtoGovernment is significant. A point worth considering in SA!