Electronic commerce (‘E-commerce’) refers to commercial transactions occurring by way of electronic means. With the establishment of digital economies resulting in an increase of digitization, e-commerce is a megatrend that is re-designing economic relations worldwide. This new borderless method of transacting provides great opportunities to stimulate trade.
In February 2020, the African Union Heads of State and Government Assembly made a decision to include e-commerce in the third phase of negotiations of the AfCFTA. The E-commerce Protocol, also known as the Protocol on Digital Trade, aims to promote the emergence of African-owned e-commerce platforms at national, regional and continental levels. Additionally, the E-commerce Protocol could minimize many already existing issues across the continent. Some examples include the reduction of poverty by employing e-commerce training and capacity building, decreasing transportation costs for e-commerce deliveries by removing tariff barriers, and upgrading digital infrastructure by establishing more reliable payment solutions and improving internet access across the continent.
The complexity with e-commerce is that it overlaps with many areas of law such as consumer protection, data protection, intellectual property rights, competition policy and tax-related issues, amongst others. The negotiators of the AfCFTA must determine how in-depth to regulate these issues within the E-commerce Protocol. Another important aspect for consideration is the regulation of online dispute settlement. The use of e-commerce channels and platforms varies from country to country. To strike a balance between a country’s capacity and access to e-commerce, state parties will need to understand national and regional rules as well as custom duties and custom procedures.
As seen in other trade agreements, the four main categories to be addressed in the AfCFTA regarding e-commerce are:
- Market access: Possible challenges that may affect e-commerce operations such as customs duties, valuation and pricing, cross-border flows and digital products.
- Rules and regulations: In particular, legal convergences that impact on e-commerce. As mentioned above, these areas of law include consumer protection, data protection, intellectual property rights, competition policy and tax-related issues.
- Facilitation: Measures that seek to use digitization to make trade easier, faster and simpler. These measures relate to legal validity and ethics such as transparency, digital identity, cybersecurity, e-signatures, e-authentication, e-contracts and paperless trading.
- Enabling issues: Provisions that warrant the structural foundation of a digital economy. For example, technology infrastructure, networks, Internet access and related issues of affordability and quality.
The E-commerce Protocol should also support and take into account the objectives of other protocols under the AfCFTA, such as those on financial investment, intellectual property and competition policy. These protocols will work in conjunction with one another as their subject matters intersect.
E-commerce is used broadly in the marketplace amongst governments, traditional businesses and entrepreneurs. Aside from the generation of a digital economy, the E-commerce Protocol could also boost certain digitally-enabled sectors across Africa, such as FinTech. Therefore fostering innovation, creating employment opportunities and increasing the overall economy of the African continent.
The outbreak of the Covid-19 pandemic not only proved how important e-commerce is but also highlighted its advantages. Strengthening e-commerce requires legal adoption and infrastructural development. The E-commerce Protocol of the AfCFTA aims to achieve both through the liberalisation of legal rules and regulations as well as the construction of technology infrastructure. Therefore, improving intra-African trade and making the African continent a competitive role player internationally.
Centurion Law Group
Centurion Law Group is a leading pan-African legal and energy advisory group that covers a full suite of practice areas. Our specialization is in assisting clients that are starting or growing businesses in Africa. Centurion is at the forefront of understanding the AfCFTA and its legal implications.
Get in touch with the Centurion team should you require any legal assistance or advice.
Caitlin Naidoo & Lona Fica
For Centurion Law Group’s AfCFTA Desk