Inspiration
Over the week, during the Agribusiness Students Association of Ghana’s maiden annual ABSAG National Festival, 2023, which was held at the Sasakawa Centre on the University of Cape Coast campus, I had the privilege of delivering a presentation on agribusiness e-commerce. It was exciting to see the passion and ambition of the attendees, as well as the in-depth questions they asked about the potential of this evolving sector of our digital economy. As I was unable to respond to all of the questions as a result of time, I decided to write this op-ed on agribusiness e-commerce to appeal to a wider readership and range of interests.
Agribusiness E-commerce in Ghana
The advent of e-commerce has opened up numerous doors for intra-Africa trade and economic growth. They include cheaper transactions, faster customs clearance, more efficient supply chain management, higher productivity, broader access to goods and services, and more consumer options. These benefits facilitate better access to newer markets for SMEs and, to a greater extent, Landlocked Developing Countries (LDCs) under AfCFTA. The last two decades have seen significant growth in e-commerce. Global retail e-commerce sales are valued at $3 trillion and continue to grow rapidly. E-commerce sales accounted for 11.9% of all retail sales worldwide in 2018 and reached 17.5% in 2021. The major drivers of e-commerce span from shifting consumer preferences, and growing internet adoption to ever-improving delivery options. Just last week, the executive secretary of the United Nations Economic Commission for Africa revealed that e-commerce will grow by 50% across Africa by 2024; which will be spurred on by investment in capacity building across the continent.
Ghana has approximately 15 million internet users who purchase daily online, with leading local e-commerce platforms including Hubtel, Jumia, Plendify, Tonaton, and Jiji, as well as, Govo, Uber Eats, and Bolt Food. Furthermore, e-commerce revenue in Africa is expected to grow significantly, with an annual percentage change of 52.7% between 2017 and 2027. Agricultural products sold online are estimated at around 447.3 million dollars with e-money transactions performed in September 2022.
Agricultural e-commerce in Ghana is still in its infancy, but there is great potential for growth in the industry. Increased smartphone penetration, improved internet infrastructure, and the availability of several digital payment platforms have created opportunities for the development of e-commerce in the country. E-commerce is growing in Ghana, and the pandemic has accelerated the adoption of eCommerce and delivery services in the country.
Challenges facing agricultural e-commerce in Ghana include limited access to financing, inadequate logistics infrastructure, and lack of trust in online transactions. Farmers and agribusinesses in Ghana face difficulty in securing the capital needed to develop and firewall e-commerce platforms, which limits their ability to secure and reach a wider audience. Additionally, the logistics infrastructure in Ghana remains inadequate, which often leads to delayed deliveries and increased costs. There is also a lack of trust in online transactions among Ghanaians, which continue to limit the adoption of e-commerce platforms in the country. Scammers and hackers are often after unsuspecting users of e-commerce services.
Trailblazers in Agri-E-commerce in Ghana
Despite these challenges, there are thriving examples of agribusiness e-commerce in Ghana including AgroCenta and Esoko, which provide secure online marketplaces for smallholder farmers to sell their products and connect farmers to buyers, respectively. The Mobile Money Payment System, for instance, is a popular digital payment system in Ghana and has facilitated the growth of e-commerce in the country. AgroCenta, an online marketplace that connects smallholder farmers to buyers, has also been successful in Ghana. The platform provides a secure online marketplace for smallholder farmers to sell their produce, and buyers can purchase agro-commodities directly from the platform. Another example is Esoko, which provides a mobile platform that enables farmers to receive market information, access credit, and sell their produce online. Esoko has been successful in Ghana and other African countries.
AfCFTA-inspired pan-African E-commerce Platforms for SMEs
- Aetrade Group is a social entrepreneurship initiative that seeks to fill crucial gaps in the e-commerce space and other information and communication technologies (ICTs) across the continent through collaborative efforts with the African Union (AU) Commission and AU Member States. The AeTrade Marketplace is a compressive continental e-commerce platform provider for African entrepreneurs in partnership with the African Union Commission. The Aetrade group recently launched their pan-African e-commerce platform (Sokokuu) where vendors can set up stores to trade their products and services across the continent.
- Africa Trade Exchange (ATEX) is a B2B and B2G platform to enable procurement in the bulk of basic commodities to ensure countries’ access to scarce supplies in a transparent manner by the UNECA, AU, Afrexim Bank, and AfCFTA Secretariat. The goal of ATEX is to help small, medium, and large African businesses tap into new markets in Africa and thereby facilitate optimisation of their supply chains for accelerated economic growth. ATEX is a digital trade platform connected within the digital ecosystem, supporting the implementation of the African Continental Free Trade Area (AfCFTA) agreement. ATEX will help realise the development potential of e-commerce and digitalisation, particularly by facilitating access for small and medium-sized enterprises (SMEs) into new markets. This will enhance intra-African trade and the African trade position in the global market, thus assisting African businesses optimising their supply chains and their continued growth.
In conclusion, while agricultural e-commerce in Ghana faces several challenges, including limited access to financing, inadequate logistics infrastructure, and lack of trust in online transactions, there is great potential for growth in the industry. The increased adoption of digital payment systems and the growth of e-commerce in Ghana present opportunities for agribusinesses to reach a wider audience and expand their businesses.
Research Desk Consulting Limited.