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African governments have generally accepted that Information and Communication
Technologies (ICTs) have a key role to play in facilitating socio-economic development. Several of them have liberalized their ICT markets and are giving their ICT sectors priority to make ICT services affordable to larger sections of their population. Liberia is a country that has a liberalized ICT market, although ICT is yet to become a priority. However, be that as it may, Liberia has made overwhelming progress in ICT in the past few years. The progress that has been made in Liberia and the entire African continent is basically the result of the telecommunications boom that has been occurring on the continent for the past twenty years. As we acknowledge and enjoy this boom, we must begin to contemplate, anticipate, and prepare for the next economical and technological boom in Liberia; E-Commerce.
E-Commerce or Electronic commerce refers to any business, or commercial transaction, that involves the transfer of information over the Internet. It is part of the “new economy” and will be the next technological boom in Liberia after the cellular phone. It will change the culture of Liberia similar to the cultural change experienced with the cell phone, which allowed Liberia to be more connected and engaged. E-Commerce will change our economics as well. But most of all, e-commerce will be fueled by developments that are currently occurring on the African continent. Below, are a few developments in Africa reported by the BBC and Telegeography in the first fifteen days of the month of July. These developments demonstrate that, in Africa, we are gradually setting the stage for e-commerce.
· BBC reported recently that Nippon Telegraph and Telephone (NTT) is expected to buy the South African IT firm Dimension Data in a $3.24 billion deal. This move is by far the largest purchase yet in sub-Saharan Africa by a Japanese company, even though they (Japanese companies) have been slow to enter the African market.
· Indian and Chinese companies have been far more active on the continent than any other country. Last month, Bharti Airtel (Indian company) completed a $9 billion acquisition of mobile operations in fifteen African countries.
· Last month (June) the world's biggest mobile phone company, China Mobile, expressed interest in investing in Africa.
· Intracom Telecom, a 51%-owned unit of Sistema of Russia’s Sitronics group, announced signing a $1.2 million contract with DiscoveryTel Ghana (DTG), for the rollout of the Ghana’s first mobile WiMAX network.
· Nigeria’s government is close to privatizing its ailing incumbent fixed line operator Nigerian Telecommunications (NITEL) to New Generation Telecommunications consortium which emerged as the preferred buyer after bidding $2.5 billion.
· Gambia recently awarded Globacom, a Nigerian Telco a secure license to operate in Gambia.
· Zambia Telecommunications Company (Zamtel), Zambia’s monopoly fixed line operator announced that it has spent approximately $34 million on laying fiber-optic cables across the country.
· Kenya-Data Networks (KDN) has expanded its network reach to six major countries in sub-Saharan Africa, enabling it to deliver cost effective services to Tanzania, Uganda, Rwanda, Gabon, Malawi and the Democratic Republic of Congo.
· In South Africa, Neotel has launched an 8Mbps uncapped internet access package under the name 'NeoBroadband WiMAX'.
· Algeria’s government has announced that it plans to hold a 4G license tender in 2011. Currently and amazingly, only three cell phone companies are in operation in that country. They include: state-owned Algerie Telecom Mobile (Mobilis), Egyptian-owned Orascom Telecom Algeria (Djezzy GSM) and Wataniya Telecom Algeria (Nedjima), a subsidiary of Qatar’s Qtel.
· Main One Cable Company recently (July) launched its high capacity fiber-optic cable system, which links West Africa to Europe. The cable spans 7,000km and has landing stations in Nigeria and Ghana with branching units in several other West Africa countries; excluding Liberia.
· Glo-1, another West African submarine fiber-optic cable system, which was developed by Nigerian telecoms operator Globacom and French vendor Alcatel-Lucent, was recently commissioned. Glo-1 is 9,800km and stretches from the UK across West Africa with landing points in Nigeria, London and Lisbon, connecting 17 countries to the rest of the world.
In other developments, large companies like IBM have been running cloud computing infrastructures in South Africa since 2008. Recently, India announced that it will begin producing the $35.00 computer. And in the financial sector there has been a proliferation of banking institutions that are making significant progress in Africa. In Liberia, Ecobank took the pioneering initiative of introducing the ATM card and other innovative banking approaches. Oh, lest I forget, Liberia expects broadband in 2012!
What do all these investments in technology, telecommunications and financial institutions mean to Africa? To me, this explosion of investments in telecommunications and technological initiatives and proliferation of African banks will lead to several things, one being e-commerce. And since there is a heavy penetration of mobile phones in Africa, M-Commerce will eclipse E-Commerce.
Are there Any Challenges?
There will be several challenges that could slow e-commerce penetration in Liberia as well as the entire African continent. One of these challenges is transacting business with Western countries. During my MBA (master of business administration) studies, I focused on electronic commerce in Africa; Liberia to be specific. I discovered in my research that individuals and companies in Western countries are apprehensive about online transactions with individuals and firms in African countries because of the Nigerian and Ghanaian Internet scams that have been and continue to be perpetrated by a few individuals from the continent. However, this will not deter or strangulate e-commerce in Africa, as inter-African online transactions will sufficiently fuel a successful e-commerce initiative until the West gains confidence in African online transactions.
Liberia stands to gain a lot from e-commerce; the agriculture sector in particular. Local goods will gain global exposure and farmers will get a fair price for their products. The field will be leveled; there will be no large and small companies because every company will have a place on the Internet. In order for E-Commerce to occur, it will require high speed and low cost Internet access. This means broadband Internet connections will energize the metabolism of the Liberian economy and the economies of other countries on the continent.
We should begin to set the stage for this new revolution. With the advent of broadband in 2012, there should be better policies and regulations; those that would help galvanize the e-commerce revolution. Focus (good pricing) should be placed on the “last mile”, which refers to the means by which retail consumers gain access to bandwidth. Flexible policies will ignite the entry of more businesses, which will lead to more jobs, competitive prices and better quality of products and services. But overall, just as the dot.com revolution came and went in the United States, so too will the telecommunications revolution come and go in Africa. And E-commerce will lead to the next wave of economical and technological boom on the continent. I reckon Liberia will not miss this opportunity!
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