Mobile commerce in Africa: Growth, opportunities and challenges

A new report from the UK's Department of International Trade outlines the enormous potential of Africa’s digital economy.


Image : Department for International Trade

This article is sponsored by DIT

A report by the UK’s Department for International Trade (DIT) has highlighted the immense potential for mobile commerce in Africa and its ability to contribute to the economic transformation of the continent.

The report Towards A Flourishing Digital Economy for All – A Spotlight on Africa, which was launched at a thought leadership breakfast on the sidelines of the 2022 Mobile World Congress in Barcelona, was prepared in partnership with Mobile World Live and examines the various challenges and opportunities around the sector in emerging markets, particularly in Africa.

In his welcome remarks, Mike Freer, the UK’s minister for exports observed that digital trade is at the heart of global growth and is expected to account for half of all trade by 2050. He said the UK is a champion of digital trade and pointed to the Digital Economy Agreement, which is the first of its kind in Europe as a demonstration of its government’s commitment.

The UK is keen to work with countries across Africa to boost digital trade and in 2019, set out a broad range of shared priorities with the African Union. Since then, the UK has supported projects in countries such as Côte d’Ivoire and Uganda to the tune of some £2bn ($2.6bn) to enhance digital trade. 

At the UK-Africa Investment Summit in 2020, the UK further committed to building a business support trade to boost trade between it and Africa. It has built a digital gateway to connect UK and Africa and also provide support in terms of trade, finance and investment.

Freer noted that the mobile commerce has created a lot of successful businesses around the world and hoped that the paper would spur discussions on how to improve the landscape and provide a fillip for mobile commerce to flourish in Africa.

Rising interest in mobile commerce

Presenting an overview of the report, Mike Short, chief scientific adviser at the UK’s Department for International Trade, revealed that the volume of e-commerce is expected to rise from $3.3 trillion as at 2019 to $7.4 trillion by 2025. Of this, only $180bn was generated in Africa, which shows that there is room for growth on the continent.

He said the report showed a rising interest in mobile commerce on the continent, with about 500 financial technology firms operating, while several technology hubs have also sprung up to support them.

However, the report also showed that there are disparities in use, with low uptake in rural areas in particular, masked by impressive headline figures on uptake, while there were still large numbers of users still using second and third generation handsets which can hinder access to the full suite of digital services.

Similarly, the report shows that while there are some 562m registered mobile money users on the continent generating some $495bn in transactions, only a quarter are regarded as very active.

Other challenges identified are the lack of robust identity and addressing systems which engender trust in the digital economy. However, the report shows there is great and growing enthusiasm for mobile commerce, with customers spending an average of £30 ($39) on purchases.

Addressing systemic issues such as affordability, it is expected, will provide further boost to the sector.

Panel discussions

The report was welcomed by discussants in two panel discussions after the presentation.

How can regulators, MNOs and others in the mobile tech industry work together to develop a conducive mobile commerce environment to advance digital trade?

Panellists: Mr. Lacina Koné, Director General & CEO, Smart Africa; Shameel Joosub, Group CEO, Vodacom; and Sitoyo Lopokoiyit, Chief Financial Services Officer, Safaricom and MD, M-Pesa.

Shameel Joosub noted that connectivity, especially in rural areas, was one of the challenges that mobile network operators on the continent are confronted with and said that Vodacom has devised several innovative ways to deal with the challenge, including beaming signals from space and from balloons.

He welcomed partnerships with other organisations to boost coverage, which would allow more people to share in the benefits of the digital economy. To address access to smartphones, Vodacom has also put systems in place that can increase penetration while minimising bad debts, for which it is also open to partnerships.

He called for more innovation to enable more small players to onboard their products and services onto online platforms that would enable them to reach customers beyond their geographical areas and for training and support for local merchants to enable them take advantage of digital tools to grow their businesses.

Lacina Koné observed that regulations were more of a barrier to mobile commerce than access to finance. He said regulators needed to approach adaptive methods and pointed out that had M-Pesa waited for regulators, it would never have gotten off the ground.

He bemoaned the worrying trend of governments seeking to tax mobile money services, which would discourage usage and imperil mobile commerce. To address issues with identity, he suggested that mobile numbers could be used as unique identifiers for customers who do not have other forms of identification.

Smart Africa, he said, has launched the Smart Africa Trust Alliance which will provide a cross-border trust system that will provide basic information about consumers that will enable to them access digital services when they cross borders in African without going through the entire due diligence procedures in the new country.

He said Smart Africa is partnering with Pan African Payment Settlement Systems to boost cross-border payments and ensure that more payments are processed within the borders of Africa without recourse to external systems such as SWIFT.

Sitoyo Lopokoiyit said that mobile money services were in partnership with banks, pointing to the fact that of the 40m bank accounts in Kenya (up from 4m in 2007), nearly 90% had been opened through M-Pesa.

He said it was great to see so many fintechs coming to Africa and that more growth and interoperability would benefit consumers. He revealed that M-Pesa has identified 2.6m businesses on its network and has separated business wallets from personal wallets, which enables it to develop specific products for the various classes of customers using the network.

Mobile money systems facilitate $8.5bn in transactions between customers and micro, small and medium enterprises in Africa every month, while international remittances account for $3.5bn.

In partnership with the British High Commission, United States Agency for International Development and World Food Programme M-Pesa had helped extend assistance to some 2.5m families who faced famine during the pandemic, which would not have been possible without it.

Investing in the digital infrastructure of the future

Panellists: Rupert Daniels, Director (Digital, Education, Creative, Consumer & Sports), UK Department for International Trade; Chris Sheldrick, Co-Founder and CEO at what3words; and Nicole Klingen, Acting Director & Practice Manager for Europe & Central Asia, Digital Development, World Bank

Nicole Klingen said that digital development is key to the post-pandemic recovery and observed that countries, cities and companies that had invested in digital technology did a lot better during the pandemic than those which had not.

She said adoption was as important as infrastructure itself and that people need to be confident that their data and privacy is protected when they adopt technology. She observed that the lack of mobile money in Latin America, for example, had impaired social safety payments during the pandemic and this had led to the Bank’s digital economy for Africa blueprint being taken and applied to other regions around the world.

The World Bank, through the International Finance Corporation has invested $5.6bn in digital economies in the last fiscal year and is committed to supporting the creation of enabling environment for digital trade across borders and the consolidation of trust systems.

Chris Sheldrick explained how what3words is enabling digital addressing systems through its innovative system, which has marked out 57 trillion locations of 3x3m each, which can direct e-commerce or emergency services to the exact spot where they are needed.

This system means that consumers can take control of the addressing system and not have to wait for government bureaucracies to develop street and property addressing systems in places where they are not already present. He said the address system is already available in 50 languages and the company is working to increase the number of languages so more people can use it in a language native to them.

Rupert Daniels, director of digital, education, creative, consumer and sports at the DIT, observed that the UK is the recipient of the second highest volume of investment in e-commerce in the world, which means that there is a lot of innovation, creativity, knowledge and experience that it can share with others.

The DIT is therefore seeking to foster partnerships with countries and companies in Africa to enable the more robust use of digital tools and platforms to spur economic growth.

He said with the right identity and trust systems in place, businesses in the UK and around the world can lead the way to a bright new future of digital trade, economic growth and development.

To download Towards A Flourishing Digital Economy for All – A Spotlight on Africa, go to

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