The United Nations Conference on Trade and Development has predicted that Nigeria and other African countries will have more than half a billion e-commerce users by 2025.
According to the UNCTAD, this was because the sector had shown a steady 17 per cent compound growth rate of online consumers.
In its report titled, ‘The economic development in Africa report 2023: The potential of Africa to capture technology-intensive global supply chains’, the global body said the enlarging consumer market on the continent would push e-commerce growth.
It highlighted that Nigeria, South Africa, and Egypt had the most e-commerce traffic on the continent.
It said, “As mentioned earlier, e-commerce in Africa is at a swiftly developing, yet early stage, with Nigeria, South Africa, and Egypt having the most e-commerce traffic.
“Africa is forecast to surpass half a billion e-commerce users by 2025, which will have shown a steady 17 per cent compound annual growth rate of online consumers in this market. This should indicate a mobile-first approach to any business looking to sell online to the various African markets.”
The UN agency declared that a projected expansion of the middle class in Africa would have growth impacts on the economy, adding that as more people with higher incomes and purchasing power got lifted out of poverty, consumerism would be stimulated by this growing segment of society.
It said even though the adoption of e-commerce in Africa had been slower when compared with other regions, the pandemic caused a change in consumer behaviour and e-commerce.
Commenting on how Africa’s youth population would drive e-commerce, UNCTAD said, “With the fastest-growing population in the world and the highest concentration of young people, as well as a large potential for e-commerce to their credit, African countries will continue to be magnets for consumer markets and products, with major implications for supply chains in terms of logistics, transportation, warehousing, and last-mile distribution.”
Earlier this year, the United Nations Economic Commission for Africa predicted that e-commerce in Africa would grow by 50 per cent by 2025.
The acting Executive Secretary of UNECA, Mr Antonio Pedro, disclosed this at the opening event of the 9th Session of Africa regional forum on sustainable development in Niamey, Niger.
He noted that investing in capacity building would be critical to delivering on the growth of e-commerce on the continent.
However, this projection might not be realised because of the current prevalence of double-digit inflation on the continent.
Recently, Jumia, one of the most prominent e-commerce sites, announced the loss of one million users because of rising inflation and economic hardship.
The firm stated that its users declined to 2.4 million year-on-year in the second quarter of 2023 from the 3.4 million it was in the corresponding period of 2022 because inflation surged in its major operating markets, including Nigeria, Ghana, and Egypt.
Jumia Group’s Chief Executive Officer, Francis Dufay, lamented, “Usage performance continued to be affected by the difficult operating environment with record levels of inflation impacting consumers’ spending as well as sellers’ ability to source goods.