Digital economy spurs stronger Africa-China cooperation

NAIROBI－Africa has been accelerating digital transformation since the outbreak of COVID-19 and the continent is now a hot spot for the rapid growth of mobile payments, e-commerce, remote work and online education.

The booming internet market is offering more opportunities for cooperation between Africa and China since both are at the forefront of the world's digital revolution.

The COVID-19 pandemic has hit Africa hard. African countries have imposed sometimes severe restrictions on populations to contain the spread of the disease, including lockdowns and curfews. As a result, digital payments and e-commerce have become a new norm for scores of households, playing a crucial role in scaling up economic recovery on the continent.

"People basically have gone cashless right now, and it's convenient to use mobile money as everyone has one now. It's a win for both clients and us," said Mirriam Maluli, a menswear store owner in the city center of Nairobi, Kenya's capital.

South Africa's leading online payment gateway PayFast reported its transactions via QR code payments surged 412 percent between March 2020 and February 2021, as digital payments are convenient and safe for people whether they are shopping in person or online.

The pandemic has also sparked a surge in internet demand and network connectivity. Kenya's telecommunications service provider Safaricom PLC registered a 39.8 percent year-on-year growth in active 4G devices and a 43.7 percent rise in homes connected for fiber-to-the-home service between April 2020 and March 2021.

A survey by Dalberg Group, a global consulting firm, found digital devices and services have improved the daily lives of 84 percent of Kenyans, while nearly a third said using digital services has boosted their incomes.

A report released in April by Visa Consulting and Analytics, Visa Inc's payments consulting arm, said sub-Saharan Africa registered a 42 percent year-on-year growth in e-commerce sales from 2019 to 2020.

The pandemic provided a growth opportunity for cooperation between Africa and China on digital transformation.

Cainiao Smart Logistics Network, the logistics arm of Chinese e-commerce giant Alibaba Group, launched an air cargo route between China and Nigeria in June, marking its first China-Africa airfreight service.

"As one of Cainiao's key emerging markets, Africa has witnessed a booming demand from local consumers purchasing items such as apparel, home appliances and electronic accessories from China," Cainiao said in a news release.

Founded by Chinese entrepreneur Yang Tao, Kilimall is one of the major e-commerce platforms operating in East Africa. Lu Xiaoyong, marketing manager at Kilimall, said sales have more than doubled since the pandemic.

Lu said consumers in Africa have moved from offline to online due to pandemic-related lockdown measures, providing an opportunity for e-commerce expansion in Africa.

With more African households embracing online shopping, the e-commerce market will continue to boom following the rising smartphone penetration rate, increasingly mature mobile payment systems and falling mobile data costs, said Lu.

Sitoyo Lopokoiyit, CEO of M-Pesa Africa, Africa's leading fintech platform operator, said there are good opportunities for Africa to partner with China and make digital technology reach more people on the African continent.

OPay, a Chinese-backed Nigerian fintech startup, is expanding rapidly and bringing accessible banking services to more vulnerable people during the pandemic.

Qiu Zhien, CEO of OPay Nigeria, said OPay now has 7 million registered app users across the country, with monthly gross transactions exceeding $3 billion.

Despite the pandemic, Africa has shown strong growth potential. The United Nations Economic Commission for Africa said the continent was projected to grow at a rate of 3.9 percent in 2020 and 4.1 percent in 2021, making the region one of the most attractive markets in the world.

"Our data indicate that the appetite for businesses to move online hasn't slowed down. Digital payments are increasingly becoming the standard for retail in our current climate," Jonathan Smit, managing director and founder of PayFast, said in a statement.

A report produced by Google and the International Finance Corporation estimated that Africa's internet economy would reach $180 billion by 2025, accounting for 5.2 percent of the continent's gross domestic product. By 2050, it could grow further to $712 billion, or 8.5 percent of GDP.

The e-Conomy Africa 2020 report said factors stoking growth are a combination of increased access to faster and better quality internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa's commitment to creating the world's largest single market under the African Continental Free Trade Area agreement.

Huang Meibo, director of International Development Cooperation Academy at Shanghai University of International Business and Economics, said Africa is one of the regions in the world where the population is younger and growing faster, with 60 percent of people under the age of 25.

Huang said in the long term, Africa is poised to become one of the most promising digital economy markets in the world.

Xinhua