Africa is a very big and diverse continent: Africa’s land size is as big as China, India, the United States and most of Europe combined. The population of more than 1.4 billion is further growing three times faster than global average.
The 54 different countries on continental Africa are very different in their economic development. What they have in common is a rapid growth of access to high-speed internet and a huge mobile-phone penetration. Considering that 70% of the Sub-Saharan population is younger than 30 years old with eagerness to access the global information and goods, fosters huge potential for e-commerce.
The e-commerce market volume is currently 37.3 billion USD and is expected to grow by 17.2% annually, with many markets demonstrating even faster growth. It’s forecasted that by the year 2027, over 608 million Africans will be regular e-commerce users. That said, when it comes to payments, only a few percent of the population has access to cards or even bank accounts. Local Mobile Money payment solutions and wallets are present in many markets and are used by the local population for almost any payment (both POS and online). Africa accounts for 70% of the world’s $1 trillion mobile money market in 2022.
Africa is a global region with the biggest potential for e-commerce in the upcoming decade. The huge and very young population is eager to buy things online, especially cross-border – both physical goods and digital goods. Online sales boomed during the COVID-19 pandemic and e-commerce in Africa is projected to grow staggering 56% by 2025.
In addition to growing e-commerce markets (most prominent being Nigeria, Kenya and South Africa), online-sales are rapidly growing throughout almost all African countries and often reach growth rates of 20% and more.
This is supported by technological and infrastructure development initiatives: in many countries mobile-phone penetration is reaching 80% of the population. The World Bank estimates that there are more than 650 million mobile phone users in Africa. In 2021, African continent led mobile internet usage with 13% above global average and shows 5% more usage then the 2nd place holder Asia region.
This also impacts the payment preferences. While access to bank accounts and cards is very low – with only 40% of Africans having a bank account. However, Africa is home to the most successful Mobile Money solutions worldwide. Telecom-companies like Vodafone, Airtel or Orange offer their millions of subscribers an easy way to pay both at POS and online. Africa currently has 562 million registered Mobile Money accounts, an increase of 12% over the previous year.
While cross-border e-commerce in Africa still bears a lot of complexities and restrictions with regards to money-remittance or general legal frameworks, national governments in many countries have initiatives to change legislation to make cross-border e-commerce easier. This will just further increase the potential of sustainable and high growth potential.