McKinsey published a report end of 2013 claiming that there is huge potential for Africa to grow its GDP by expanding its internet in general and its E-Commerce activities in particular.
Following a decade of rapid urbanization and strong economic growth, Africa is going digital. While just 16 percent of the continent’s one billion people are online, that picture is changing rapidly. If infrastructure investment continues, the Internet will take hold on a much larger scale in the coming decade—potentially adding $300 billion a year to Africa’s GDP.
Evidence of what is to come can already be seen in Africa’s major cities, where consumers have greater disposable income, more than half have Internet-capable devices, and 3G networks are up and running. Significant infrastructure investment—for example, increased access to mobile broadband, fiber-optic cable connections to households, and power-supply expansion—combined with the rapid spread of low-cost smartphones and tablets, has enabled millions of Africans to connect for the first time.
In 2013, Africa’s iGDP (which measures the Internet’s contribution to overall GDP) was low, at 1.1 percent—just over half the levels seen in other emerging economies. However, this number keeps growing quickly. By 2025, Africa’s iGDP should grow to at least 5 to 6 percent, matching that of leading economies such as Sweden, Taiwan, and the United Kingdom. However, if the Internet achieves the same kind of scale and impact as the spread of mobile phones in Africa, iGDP could account for as much as 10 percent, or $300 billion, of total GDP while producing a leap forward in economic and social development.
E‑commerce will open up a new shopping experience for Africa’s growing middle class. By 2025, it could account for 10 percent of retail sales in the continent’s largest economies, which will translate into some $75 billion in annual revenue.
Financial Fairplay AG is an early mover in this up and coming business, helping producers of consumer goods to establish their brands early for the African E-Commerce market and helping investors, who finance such deals to make attractive returns.
