Policy, Growth, and Advancing Implementation of the AfCFTA Protocol on Digital Trade in Nigeria with Prachi Agarwal and Alberto Lemma

[00:00:00] You're listening to the Unlocking Africa podcast.

[00:00:03] It's really creating a brand new marketplace that other African countries can engage for trade, for both for digital goods and services, but also for e-commerce.

[00:00:13] It has the potential to reshade Nigeria's economy by integrating it more deeply into the African and global market spaces.

[00:00:19] What would happen if Nigeria decided to expand its digital penetration, which means how many people have accessed and engaged with the internet and with digital services and products?

[00:00:30] Nigeria does have a very vibrant digital entrepreneurship landscape. I mean, even Lagos and Abuja alone have four to five tech unicorns already.

[00:00:40] Stay tuned as we bring you inspiring people who are unlocking Africa's economic potential.

[00:00:46] You're listening to the Unlocking Africa podcast with your host, Terser Adamu.

[00:00:55] Welcome to the Unlocking Africa podcast, where we find inspirational people who are doing inspirational things to unlock Africa's economic potential.

[00:01:05] Today, we have Prachi Agarwal and Alberto Lemma, who are research fellows at the International Economic Development Group at ODI.

[00:01:17] ODI is a think tank that aims to force for positive change, lead thinking and agendas to build a more resilient, just and equitable future for all.

[00:01:28] Welcome, welcome, welcome to the podcast, Prachi and Alberto. How are you?

[00:01:34] Very well. Great to be here. Thank you.

[00:01:36] Fantastic. It's a pleasure to have you here.

[00:01:38] And I guess we're here to discuss a report that you recently published, which is titled Advancing Implementation of the AFTER Protocol on Digital Trade in Nigeria.

[00:01:51] That's right.

[00:01:52] So as we get started with the conversation, I guess let's get straight into it.

[00:01:57] If you could tell us in terms of what inspired the research on the AFTER Protocol on Digital Trade.

[00:02:04] It's a new opportunity for the continent to actually unlock new avenues for growth, what we call transformative growth.

[00:02:12] In a sense, it's part of the structural transformation approach.

[00:02:16] Going away from the older, less productive sectors such as agriculture, well, not going away, but addition to these sectors, and moving on to new, more productive sectors.

[00:02:27] And the protocol is a great opportunity for this because it really creates a single unified market across Africa, and that's the aim for it.

[00:02:36] And not just the market, but it also has provisions to allow infrastructure, both in terms of the digital software side, all the protocols, but also on the technological side and on the hardware side, to really connect up these countries.

[00:02:50] So it's really creating a brand new marketplace that other African countries can engage for trade, for both for digital goods and services, but also for e-commerce.

[00:03:02] So effective is just creating a really big market across Africa, something that for many smaller nations wouldn't have otherwise been feasible to have their own, for example, software industry with small markets.

[00:03:15] But now it's possible to foster growth in technology hubs across the continent and have a large market to support it, particularly for software and services that are tailored for the African market, that are not necessarily tailored for the global or for the Western market, but actually more tailored for the needs and requirements of the African market.

[00:03:38] Brilliant. So you touched on some interesting points there with regards to the transformative potential.

[00:03:45] So I was hoping you could briefly explain the transformative potential, specifically of the AFDA protocol on digital trade for Nigeria's economy.

[00:03:55] Nigeria's economy is fairly large, and it's also one of the countries across Africa that has a nascent, more developed ICT sector, but also the services sector.

[00:04:08] So the protocol really allows Nigeria to act as a service hub for the provision of goods and services, not just for countries in Western economies, but also for other African countries, like I mentioned earlier.

[00:04:23] And given the large size advanced capacities are already in Nigeria, they're well placed to take advantage of the protocol, should they be able to then support the growth of e-commerce and also the production of digital goods

[00:04:39] And on top of which, a fundamental part of the whole digital services and digital goods economy is that it's not dependent on logistics, road transport logistics particularly, and also it's not dependent on resource acquisition.

[00:04:55] I can add to what Alberto was saying.

[00:04:58] I can add to what Alberto was saying.

[00:04:58] And the transformative potential of the AFDA protocol on digital trade, especially for the Nigerian economy, is deep inside the idea that the protocol can reduce trade barriers, like tariffs on digital trade for goods and services, as well as regulatory mismatches.

[00:05:14] It can allow Nigerian businesses, especially startups, SMEs and companies that are private entities that are run by women and youth to access a larger consumer base across the African continent.

[00:05:26] The protocol in itself can foster innovation and, as I mentioned, reduce trade costs through digitalization and promote digital inclusivity, which has very far-reaching effects, not just on the digital economy itself, but also fintech, e-commerce, IT services, goods which are traded through digital means.

[00:05:48] And as Alberto said, and I want to reiterate what he said, that it has a potential to reshape Nigeria's economy by integrating it more deeply into the African and global market spaces.

[00:05:59] The future is digital in this respect.

[00:06:02] And I think it's a very big opportunity for Nigeria to have, to leverage its youthful population's demographic dividend in that respect and its dynamic technological sector at the moment to really build on the idea of economic diversification and move away from the economy, which is so dependent on oil at the moment and move into a more inclusive and tech-driven future.

[00:06:26] Thank you for that.

[00:06:27] So if we look specifically at the elements of the report, what would you say are the key findings that the report has highlighted regarding Nigeria's digital ecosystem?

[00:06:42] I want to divide my response into three main categories.

[00:06:45] We found out a lot of things about what Nigeria is in terms of its capabilities and the current ecosystem, but we were also able to identify significant gaps in its ecosystem.

[00:06:57] And obviously then our research goes on to suggest various policy recommendations that Nigeria can undertake to build a very powerful digital ecosystem.

[00:07:09] But more on that later.

[00:07:11] In the very beginning, we found out that Nigeria has a very large and fast-growing digital ecosystem on the continent.

[00:07:20] But at the same time, it faces significant challenges.

[00:07:23] These challenges are in the form of inadequate digital infrastructure, high regulatory barriers, and various issues with cybersecurity, consumer protection.

[00:07:34] And this leaves the digital environment open to cyber threats, to information leakages, and lots of barriers that are restricting businesses to really benefit from the digital trade protocol.

[00:07:51] The interesting bit here is that Nigeria does have a very vibrant digital entrepreneurship landscape.

[00:07:57] I mean, even Lagos and Abuja alone have four to five tech unicorns already.

[00:08:03] So there's a massive scope for companies to drive innovation in e-commerce and fintech spaces.

[00:08:11] But there is, however, a great alignment which needs to be reached or there needs to be greater alignment between national policies and international standards.

[00:08:23] Because we found that Nigeria is far behind when it comes to issues like I mentioned.

[00:08:30] And they are not aligned with international standards.

[00:08:37] Thank you for sharing that.

[00:08:40] So if we look at the potential economic impact of advancing implementation, I read in the report that it estimates potential GDP growth from 11.7% to 12.8%.

[00:08:55] Would it be possible to explain how digital trade can contribute to this rise?

[00:09:01] Yes, Tersa, that's part of an estimation exercise that we carried out forward.

[00:09:07] So we were basing this on a framework.

[00:09:09] Another paper I wrote about how to measure the potential impact of the digital trade protocol on African economies.

[00:09:16] And it's basically looking at using previous studies to estimate what the impact of similar digital trade protocols have had in other regions.

[00:09:27] And applying this to African countries and then specifically to the Nigerian context.

[00:09:34] And within that, we find that the adoption of similar agreements was leading between a 15% to 16.9% growth in exports.

[00:09:44] When you look at then what growth in exports does to the Nigerian economy,

[00:09:48] this then translates effectively to a GDP per capita increase between 11.7% and 12.5%.

[00:09:54] Of course, these are optimistic estimations.

[00:10:00] But I think broadly, we're in line to see a pretty large increase in GDP.

[00:10:06] We also made assumptions on employment increase based on other studies that we carried out looking at what happens with assumptions that a 1% increase in GDP,

[00:10:19] what kind of impact that would have on employment.

[00:10:21] And we also looked at that the protocol could create an additional between 11 and 12 million new jobs in additional workers in the economy,

[00:10:32] which is a very large number.

[00:10:35] And again, it's a bit optimistic, but it's an estimate at the moment.

[00:10:40] Obviously, there's a multitude of factors that could change these numbers that we can't really see through these estimations.

[00:10:51] So yeah, that's the broad impact.

[00:10:53] But then we're also looking at it from the other side, which is not just the protocol,

[00:10:57] but what would happen if Nigeria decided to expand its digital penetration,

[00:11:03] which basically means how many people have access to the internet and engage with the internet and with digital services and products.

[00:11:12] And then when we put the estimates of the increase in exports together with the estimates of digitalization rate,

[00:11:19] that's when we saw this increase in GDP, the total figure that's in the report.

[00:11:24] So we estimated about 11.7% to 12.8% increase in GDP, if you're putting these things, these two factors together,

[00:11:32] which requires not just signing onto the protocol and taking part in trade,

[00:11:38] but also an effort by Nigeria and the government to really promote digitalization,

[00:11:45] including more infrastructure, ICT infrastructure, access to skills, et cetera, et cetera.

[00:11:50] You touched on the job creation potential.

[00:11:53] Sure. So I was wondering, were these specific sectors or job types that you would expect to benefit the most from this growth?

[00:12:03] This was not a disaggregated study at the sectoral level.

[00:12:07] We were looking at it from an aggregated macroeconomic perspective or at the national level.

[00:12:13] We would obviously be expecting a large chunk of this growth to come from within ICT and ICT adjacent sectors.

[00:12:24] And within the ICT sector, what's interesting is that Nigeria's productivity per worker within the ICT sector

[00:12:34] is much, much larger than the average productivity.

[00:12:37] I mean, we're looking at in 2022, an ICT worker in Nigeria as productivity was approximately 173,000 US dollars,

[00:12:49] whereas in 2015 US dollars, whereas the average worker productivity was $7,000.

[00:12:57] So if we're looking at that large increase in GDP, it's likely to stem from a large increase in the amount of workers that are within the sector

[00:13:09] and engaging in more productive jobs and thus contributing higher to the economy.

[00:13:16] Of course, we can't be, as I said, this was an aggregate study.

[00:13:21] We didn't look at each sector individually.

[00:13:23] So we can't really be sure how the distribution will happen because on top of just the ICT sector and ICT adjacent sector,

[00:13:31] you've obviously got the whole e-commerce sector, which is more in line with more traditional retail services.

[00:13:37] And then there's logistics and some more of the creative sectors as well that would benefit from this participation.

[00:13:46] But that's broadly what we're looking at.

[00:13:49] Thank you for sharing that.

[00:13:51] I guess in order to create more ICT sector jobs, it will require investment in the digital infrastructure.

[00:13:59] From the research you've done, what would you say the current state of Nigeria's digital infrastructure?

[00:14:08] Compared to infrastructure globally, it's not in a great shape.

[00:14:14] Compared to infrastructure across the continent, it's in a better state.

[00:14:18] But we're still looking at low global internet subscriber numbers, access to the internet, etc.

[00:14:26] So there's quite a lot that needs to be done in order to increase the potential access to digital products to do that.

[00:14:35] There was another study I've done recently, which whilst not looking directly at Nigeria,

[00:14:41] I was looking more at the continent as a whole.

[00:14:44] And I estimated that because energy is such a big part of this discussion, especially for data centers,

[00:14:51] and you need data centers to have a well-functioning digital economy, both in terms of the e-commerce side,

[00:14:59] consumer data software, all aspects of it.

[00:15:04] Then if African countries wanted to achieve the same level of data centers per capita as Europe or North America,

[00:15:16] on average, they would have to invest all their, for the next 10 years at least,

[00:15:24] all their new energy projects would have to go solely to the provision of energy for these data centers,

[00:15:32] just to keep up with the same rate that you have in Europe and in North America.

[00:15:38] So there's still a large gap, not just in the digital infrastructure, but also in the energy infrastructure that's required to make it function without it.

[00:15:47] And then there's obviously interconnectivity issues between within countries or between the urban and rural areas.

[00:15:55] And that's a bit of a, that's an issue because digital services, digital products can really be used as a,

[00:16:03] as a great equalizer between the rural and urban areas.

[00:16:08] Of course, you'll have a larger concentration of creative industries in, in, in urban areas,

[00:16:14] but you'll also be able to access more working from home opportunities,

[00:16:18] more e-commerce opportunities in rural areas with access to the internet.

[00:16:23] And if there's still that large rural urban gap in connectivity, then that's a problem.

[00:16:28] But then there's also the issue of connectivity between countries and that needs to be addressed.

[00:16:33] And that's where the AFCFTA also, the digital protocol also helps because it does commit countries to increasing their connectivity between countries.

[00:16:44] You touched on a few key points there in terms of the need for data centers, connectivity,

[00:16:50] low number of internet users or access.

[00:16:53] So I guess with that in mind, what role can improve broadband and mobile network penetration play in facilitating digital trade specifically in Nigeria?

[00:17:07] It's a fairly key role.

[00:17:08] And the main role is that you're allowing more SMEs, more enterprises to access greater markets.

[00:17:16] So if you, if they are not currently connected, then they can't engage and they can't increase their market reach.

[00:17:25] I mean, that's the basics of it in that sense.

[00:17:29] But also it's a matter of updating, allowing them to update their systems and use more efficient, more modern systems.

[00:17:39] But also be able to outsource in a way their skills and capabilities because you don't need to, you can use other programs and AI and algorithms to do a bunch of work,

[00:17:54] which maybe you don't have the necessary labor skills for within a small SME.

[00:18:01] For example, you can, you could potentially use automated bookkeeping services or things to do business plans to set out business plans.

[00:18:11] So it's, there's a whole host of improvements that come with it.

[00:18:15] Obviously, the first one is access to markets by reaching new clients.

[00:18:21] But then obviously you'll need to look at the logistics infrastructure that allows you to then send the products.

[00:18:27] If you're on the other hand, focused on services or digital goods, then just by having the access, you open up your market immediately.

[00:18:35] Obviously, you then need to be able to have the correct tax regimes and, you know, a VAT.

[00:18:42] For example, who wears VAT paid on these digital goods and all the different regimes.

[00:18:48] And that's the protocol also helps with that.

[00:18:51] I guess it's safe to say that policy and regulation plays a big part in how fast or slow we advance in this space.

[00:19:00] From the work or the research you've done, how important would you say policy alignment with international best practices in Nigeria is for the success in the digital trade space?

[00:19:12] Thank you, Tarsa.

[00:19:13] It is extremely important that Nigeria's policies are in line with international best practices to ensure success in the digital trade arena.

[00:19:25] And to succeed in digital trade, Nigeria has to do several things.

[00:19:30] The report, for example, underscores the importance of international best practices in data management, cyber security, e-commerce regulations, regulations on free data flow, data protection, harmonization of regulations on digital trade.

[00:19:49] And these standards are essentially really important to foster interoperability with other African nations.

[00:19:57] And this also includes regional payment methods or how to maintain security of consumers and retailers on e-commerce websites.

[00:20:06] And, for example, adopting global standards for electronic trade documents, which is e-verification, e-authorization, e-signatures.

[00:20:16] If Nigeria is able to align with international best practices in these areas, it is likely to attract more investment in digital trade in Nigeria and also make it a very competitive play in the digital space in Africa.

[00:20:29] And the African continental free trade area, the digital trade protocol within it is an excellent opportunity for Nigeria to not just learn from what's happening globally, but also learn from other countries on the continent that are quite successful in the digital space already.

[00:20:47] Thank you for that, Prachi.

[00:20:49] As you've mentioned, the report highlights is there are 52 restrictive digital trade policies in Nigeria.

[00:20:56] How do you believe these restrictive trade policies hinder digital trade?

[00:21:04] Yes, you are right.

[00:21:06] The report does highlight that Nigeria has some of the highest number of restrictive digital trade policies on the continent.

[00:21:14] Like you said, there are 52 in total, and that's the second highest on the continent.

[00:21:19] And these restrictions come in the form of high digital trade tariffs.

[00:21:24] Complexity in regulatory requirements for online sales and transactions.

[00:21:29] Incomplete digital trade infrastructure.

[00:21:33] The access to a safe environment, to safe transactions, online payment methods.

[00:21:41] And such policies essentially create hurdles for businesses, particularly small and medium enterprises, SMEs,

[00:21:48] and companies that are run by other vulnerable sections of the economy, such as women and youth.

[00:21:56] And it makes them harder for them to engage in digital trade at all.

[00:22:00] These barriers also inherently diminish Nigeria's attractiveness for investment.

[00:22:06] And as a result, are likely to stifle the growth of its exports, especially in digitally enabled services and goods.

[00:22:14] And I think it is very essential that Nigeria is able to, you know, overcome these restrictive policies.

[00:22:22] So if you see globally, there are other countries like the US, for example, which is very restrictive when it comes to digital trade.

[00:22:29] There are lots of policies that want to ensure that regulatory or their regulatory practices in place to ensure security and safety.

[00:22:40] It doesn't mean that Nigeria cannot grow despite these policies in place, because USA has, despite it being restrictive.

[00:22:48] But what is essential is to have more awareness and there has to be active policies that engage with the private sector and with businesses to make sure that they understand what needs to be done

[00:23:01] on how they can actually benefit from these policies rather than them being restrictive in nature.

[00:23:06] You touched on the policies creating hurdles for businesses such as MSMEs.

[00:23:11] So if we look specifically at businesses, how aware is the private sector of the after digital trade protocol?

[00:23:20] Thank you for that question, Dorsa.

[00:23:22] To be very honest, awareness of the digital trade protocol and what needs to be done to really benefit from it is pretty low in the Nigerian case.

[00:23:32] Alarmingly, about 70 to 80 percent of the firms that we surveyed in our report were not aware of the protocol itself.

[00:23:39] And that's a massive gap, right?

[00:23:42] Essentially, considering that SMEs, the life blood of Nigeria's economy are critical for the success of the digital trade.

[00:23:50] And even in sectors that are more digitally forward, like fintech and telecommunication, the level of awareness was pretty limited.

[00:23:58] And this inherently impacts the level of understanding amongst businesses.

[00:24:04] It is one thing to have heard about the AFC-FTA protocol, but it's an entirely different thing to understand how it works for you and what it means for businesses and the opportunities it presents or unlocks.

[00:24:16] And sadly, this is where things get murkier.

[00:24:19] The report shows that most businesses lack a deep understanding of how the protocol could transform their operations or the regulatory frameworks that are in place in Nigeria at the moment to take full advantage of this.

[00:24:32] And while some government agencies are more involved in discussions, there's a major disconnect between what is happening in reality and what Nigeria needs and how well prepared it needs to be to benefit from this.

[00:24:47] Interesting, interesting.

[00:24:48] So it's clear that access to information is a challenge or barrier that these MSMEs face.

[00:24:54] So what are the challenges do you believe they face specifically when it comes to participating in digital trade?

[00:25:03] For participation purposes, I think the main issue is awareness to begin with.

[00:25:08] They need to be aware.

[00:25:10] And when I talk about awareness, it's not just about how to trade on e-commerce platforms or just about the protocol itself.

[00:25:18] But there is a whole depth of understanding that needs to be imparted on issues such as cybersecurity, on payment gateway methods, on data privacy, on consumer protection.

[00:25:29] These components are essentially very important to digital trade.

[00:25:33] And just to zoom into one or two of these.

[00:25:38] So cybersecurity essentially is a critical barrier when it comes to Nigeria's digital trade growth story.

[00:25:43] This is obviously given the low level of awareness and the private sector players about it.

[00:25:48] And in our report, we find that Nigeria needs to take immediate action by strengthening its cybersecurity frameworks and increasing awareness of best practices amongst businesses to reduce cyber attacks and data breaches.

[00:26:02] In addition to that, Nigeria also needs to focus on improving its payment gateway methods to ensure that transactions, especially cross-border ones, you know, from between Nigeria and another country in Africa, are secure and seamless for both merchants and consumers.

[00:26:18] And these are some of the two issues.

[00:26:20] There are, like I said, many other issues that need to be knowledge about which need to be imparted to businesses so that they can really understand what this means for them.

[00:26:29] Thank you. So you touched on the current state of cybersecurity and data protection.

[00:26:35] So from your research that you've carried out, what strategies do you believe Nigeria can adopt to improve, for one, cybersecurity awareness and also the infrastructure as part of the AFTER protocol implementation?

[00:26:51] That's an excellent question.

[00:26:53] Like I said, cybersecurity is a big issue.

[00:26:56] And I think the main suggestion or the main recommendation from our side, Fund Nigeria, at this stage would be to launch a nationwide awareness campaign to educate businesses and consumers about cybersecurity risks and best practices, like I said.

[00:27:10] And this essentially means that it must strengthen its regulations to protect consumer data and to even give them the access to their data to ensure that there is no unauthorized access or misuse of their personal information.

[00:27:26] And this would mean upholding rights of consumers to control how their data is stored or even used.

[00:27:31] And this is where consumer protection laws come in.

[00:27:34] The other thing that I want to say is that there is a need to support all of this.

[00:27:39] There is a need to invest in infrastructure that supports secure digital transactions, perhaps in the form of better encryption technologies and a stronger legal framework to address cybercrime.

[00:27:51] I think that is very essential in the Nigerian case.

[00:27:53] And this would mean that the government and ministries and the private sector will need to collaborate to help fill in these gaps in cybersecurity training and infrastructure.

[00:28:03] And this is how Nigeria can actually, you know, take a step forward, take a step ahead and move in the right direction towards a secure and a more robust digital trade system.

[00:28:16] Keeping on the theme of recommendations, the report proposes 12 policy recommendations.

[00:28:23] Which of these do you think are the most urgent for Nigeria to focus on?

[00:28:30] From the 12 policy recommendations in the report, I have my top five.

[00:28:35] When I was writing them, I had my top five.

[00:28:39] I think perhaps the most urgent is to develop a broad-based digital trade policy in Nigeria,

[00:28:46] which would come from a collaborative process between all public sector and private sector stakeholders

[00:28:52] through inter-ministerial collaboration and ensuring that businesses have a voice.

[00:28:58] So essentially what I mean by inter-ministerial collaboration,

[00:29:02] I mean that the digital trade ecosystem touches upon several departments within the government,

[00:29:09] from trade to finance to ICT to infrastructure.

[00:29:13] And I think it is very important that there's a coordinated effort across government ministries

[00:29:17] and taking views from the private sector to develop this digital trade framework,

[00:29:22] so as to say, which brings everyone's interests together.

[00:29:28] That's my first.

[00:29:29] Second would be to reform Nigeria's regulatory environment to align with international standards.

[00:29:37] Then third would be boosting transparency in e-commerce regulations.

[00:29:42] And then followed by ensuring that there's a regulatory framework for data privacy and cybersecurity.

[00:29:48] And finally, enhancing the environment for innovation.

[00:29:52] So innovation is the key here.

[00:29:54] And these five recommendations, which we have provided,

[00:29:59] my top five recommendations are the key to unlock the benefits of the digital trade protocol.

[00:30:05] And this will provide a very solid foundation,

[00:30:08] which is needed for sustainable growth in the Nigerian digital economy today.

[00:30:12] Thank you for sharing that.

[00:30:15] Interestingly, you highlighted inter-ministerial collaboration, which I agree on.

[00:30:20] So if you look at collaboration, what role does Pan-African regulatory collaboration play in

[00:30:27] promoting whether it's e-commerce or trade across the continents under AFTA?

[00:30:33] That's an interesting question.

[00:30:34] Well, while our report focuses on Nigeria and the Nigerian identifying gaps and challenges within the Nigerian case,

[00:30:45] your question mentions is that what can we do in terms of ensuring that across the continent there is some alignment?

[00:30:53] Yes.

[00:30:53] The most important bit here is that once countries,

[00:30:57] and this is what the AFCFD Digital Trade Protocol will do,

[00:31:00] it is essentially creating a common framework for countries to come together

[00:31:04] for digital trade to ensure that they have similar policies in place.

[00:31:08] And that, like I mentioned earlier,

[00:31:10] it is very important to create an interoperability between countries.

[00:31:13] So, for example, if an SME or an exporter sitting in Nigeria wants to sell its goods via e-commerce

[00:31:20] to somebody in Kenya or in South Africa,

[00:31:23] it is important that they have the same payment method,

[00:31:26] which means that the payment gateway should be able to accept Nigerian Naira as well as Kenyan shillings.

[00:31:34] At the same time, and they should be able to convert those currencies and ensure a seamless and a secure transaction,

[00:31:40] a payment transaction.

[00:31:41] So that's one kind of it.

[00:31:43] The other would be to ensure that goods which are being exported from Nigeria via e-commerce websites

[00:31:48] are reaching Kenya or South Africa in a timely manner.

[00:31:52] That would mean there has to be some kind of coordination between the customs department.

[00:31:57] There has to be coordination between postal departments.

[00:32:02] And these are some elements that the AFCFD Digital Trade Protocol is trying to harmonize.

[00:32:08] Then, of course, there are needs for consumer rights, as I said.

[00:32:13] And when you harmonize the regulations on consumer rights and protection,

[00:32:17] you essentially say that if these are being flouted or if there's a cybercrime

[00:32:23] where there are data breaches in one country,

[00:32:26] other countries are also on board to make sure that their consumers and sellers are also being protected at the same time.

[00:32:33] So having common practices across the continent is going to be very essential

[00:32:39] in making sure that we're able to create this large digital marketplace on the continent

[00:32:44] where everybody can trade and consume goods and services, digital services,

[00:32:50] on an equal footing where things are not getting delayed,

[00:32:54] not just trade, but also any kind of protection is not getting delayed

[00:32:59] because there are differences in how countries perceive these laws and regulations to be for digital trade.

[00:33:04] And the Digital Trade Protocol is trying to establish exactly this,

[00:33:08] a common regulatory framework to ensure that goods and services can be digitally traded seamlessly

[00:33:16] and quickly across the continent.

[00:33:18] Thank you, Frida.

[00:33:20] I guess as the conversation is about advancing implementation of the AFTA protocol

[00:33:25] on digital trade in Nigeria,

[00:33:28] are there any trends that you're seeing in the digital trade space

[00:33:31] that you're particularly excited or encouraged by?

[00:33:36] Do you want to take that, Alberto?

[00:33:38] I wouldn't say there's any particular trends that are too exciting at the moment.

[00:33:44] I mean, obviously there's the whole AI issue,

[00:33:47] but I think we've got a separate discussion that needs to be made there

[00:33:51] about the role of AI in Africa and who and where controls it

[00:33:55] because there's issues there with China's role in AI.

[00:34:00] I think that's what the main sticking point in the future will be

[00:34:04] is about how AI is being implemented in Africa

[00:34:08] and how local resources and local data is being used and to what ends.

[00:34:14] I think that's the most interesting one.

[00:34:17] When it comes to the e-commerce space, I think there's obviously the idea

[00:34:23] that you can have your local e-commerce platforms taking off,

[00:34:28] but also there is still the risk that you might have with this open market,

[00:34:33] a larger market and greater digital integration,

[00:34:35] that you have more global marketplaces that come in like Temu and Alibaba,

[00:34:40] obviously Amazon and eBay that then come and effectively dominate,

[00:34:47] monopolize these spaces.

[00:34:48] So there's still some consideration there to be done about how you want to interact.

[00:34:53] Once you've opened up the markets,

[00:34:54] how you actually want to interact with these global services,

[00:34:58] considering how big they are already and how well established they are.

[00:35:01] I think those are some of the key, I wouldn't say trends,

[00:35:06] but at least ideas to bear in mind.

[00:35:07] You mentioned something quite key there in terms of looking at the future,

[00:35:12] how AI is used on the continent.

[00:35:15] So if we look at the future,

[00:35:17] where do you see specifically Nigeria in say five years time,

[00:35:21] if it successfully implements the AFTER protocol on digital trade?

[00:35:27] Never been one for predictions, I must say.

[00:35:30] I don't think we should make too many predictions for us economists.

[00:35:36] It's never a good look when they don't come to fruition.

[00:35:40] But I mean, I think it's given Nigeria's English language capabilities,

[00:35:46] its large pool of labor,

[00:35:48] I think there's a good opportunity for it to effectively be a part of,

[00:35:54] to be able to provide digital services,

[00:35:56] at least to the Anglophone countries.

[00:35:59] To a greater extent.

[00:36:01] But having said that,

[00:36:03] there is also the risk that all of these back office processes

[00:36:06] all end up being taken by AI algorithms and large language models

[00:36:12] and other AI systems.

[00:36:15] So there is a risk that an important and crucial part

[00:36:20] of the whole ICT sector growth process

[00:36:22] will not be available to African countries,

[00:36:26] given, you know, chat GPT and the likes rising in sophistication

[00:36:30] and in capabilities.

[00:36:33] So I think it needs to be in five years time,

[00:36:36] if Nigeria wanted to really be at the forefront,

[00:36:39] or at least take advantage of it,

[00:36:41] it needs to leverage its own cultural and creative industries

[00:36:45] in order to create and generate content and software

[00:36:49] that are more in tune with the needs of African markets,

[00:36:53] starting from Nigeria itself,

[00:36:55] the West African region,

[00:36:57] but maybe as the continent as a whole,

[00:37:00] rather than competing globally.

[00:37:02] And I think that's where the key opportunities are,

[00:37:04] because the whole market is untapped,

[00:37:06] and it's usually underserved by global companies.

[00:37:10] And so having products that are localized,

[00:37:13] that are made locally,

[00:37:16] that are tailored to local experiences and requirements,

[00:37:18] then I think that'll be the key to make it a success.

[00:37:22] Yeah, to add that,

[00:37:23] one point, you've covered everything.

[00:37:25] To what Alberta said,

[00:37:28] yes, Nigeria has this potential

[00:37:29] to become a business processing,

[00:37:32] outsourcing or a BPO hub.

[00:37:34] And we recently,

[00:37:36] in some conversations with government in Nigeria,

[00:37:40] that has become one of the main priorities

[00:37:42] for the country at the moment,

[00:37:44] to position itself as a large BPO sector player in Africa,

[00:37:48] and even try to emulate the success of India

[00:37:52] and the BPO industry boom.

[00:37:54] And that is where Nigeria is headed at the moment.

[00:37:57] The second is e-commerce,

[00:37:59] which we've already spoken about.

[00:38:01] There is so much potential for Nigeria

[00:38:04] in terms of e-commerce at the moment.

[00:38:06] They have lots of different goods and services

[00:38:10] that they are very well positioned

[00:38:11] to provide the continent.

[00:38:14] And finally, I think what we have missed out

[00:38:17] is that the backbone of Nigeria's trade

[00:38:21] is small businesses which are run by women.

[00:38:24] So women entrepreneurs are,

[00:38:26] I think, the key to provide them

[00:38:28] with digital skills and digital literacy,

[00:38:30] the know-how, the finance for e-commerce.

[00:38:33] I think it's so important to give them

[00:38:35] the right resources and the environment

[00:38:37] to grow under the AFC FTA

[00:38:41] because they are already from a large component

[00:38:45] of informal trade in Nigeria.

[00:38:48] They have these small businesses,

[00:38:50] these boutiques are run by women and youth

[00:38:53] at the moment who are already providing goods

[00:38:56] and services, but in a very informal way.

[00:39:00] And e-commerce is going to give them that platform

[00:39:03] to be able to do it in a formal way

[00:39:05] to ensure they become part of the Nigerian economy.

[00:39:07] And I think that the government at the moment

[00:39:10] really needs to do a lot of things.

[00:39:13] They already have some policies in place,

[00:39:15] but I think there still needs to be a lot of steps

[00:39:18] towards ensuring that women-led entrepreneurship efforts

[00:39:23] and women-led innovation and e-commerce

[00:39:26] is part of the Nigerian story.

[00:39:29] And they need to be equipped with tools,

[00:39:32] with money, with training,

[00:39:33] with incubation centres to ensure

[00:39:37] that they can learn from the best

[00:39:38] and they can provide these services.

[00:39:40] Because like I said, digital is the future,

[00:39:42] but women in digital is even bigger.

[00:39:44] So I guess looking closer to home,

[00:39:47] I know both of you have published

[00:39:48] some insightful pieces of research,

[00:39:51] not just this one.

[00:39:52] Research that focuses, as we mentioned earlier,

[00:39:55] to force positive change and lead thinking

[00:39:58] in different markets and sectors

[00:40:00] within the continent.

[00:40:02] What does the future hold for you anymore?

[00:40:05] Interesting pieces of research on the horizon?

[00:40:08] Anything that you're working on

[00:40:09] that we should look out for?

[00:40:11] Yeah, absolutely.

[00:40:12] I think one thing here is that

[00:40:13] for Nigeria, for example,

[00:40:16] we are now working on developing

[00:40:18] a broad framework,

[00:40:20] digital trade framework for them

[00:40:22] with the government.

[00:40:22] We're working with the government on that.

[00:40:24] We're also doing interesting pieces of work

[00:40:27] for Ghana to ensure implementation

[00:40:30] of the digital trade protocol,

[00:40:32] as well as the women and youth protocol

[00:40:33] under the AFTER.

[00:40:36] There is some interesting work

[00:40:38] in the digital space going on in South Africa,

[00:40:40] which we're supporting

[00:40:42] to ensure that they can grow

[00:40:43] their e-commerce sector as well.

[00:40:45] Alberto, any other inputs there?

[00:40:48] Working with Cameroon,

[00:40:50] we're also looking at the implementation

[00:40:52] in Cameroon for the digital commerce.

[00:40:55] We're working with Trademark East Africa,

[00:40:58] looking at developments in digital trade

[00:41:02] across Africa.

[00:41:03] And I'm also personally trying to get

[00:41:06] a discussion started on the role of China

[00:41:10] and AI in Africa

[00:41:11] and how China is positioning itself

[00:41:14] to dominate the AI rollout in Africa.

[00:41:18] And I should have something published

[00:41:20] on that quite soon,

[00:41:22] at least some editorials forward.

[00:41:25] Fantastic, fantastic.

[00:41:27] And hopefully we can have conversations

[00:41:29] on some of those future pieces of work

[00:41:31] that you're doing

[00:41:32] in the not so distant future.

[00:41:35] So thank you for that.

[00:41:37] Quote of the week.

[00:41:38] As people, we often have quotes,

[00:41:41] mantras, proverbs, affirmations

[00:41:43] that keep us going

[00:41:43] when times are challenging

[00:41:45] or when times are good.

[00:41:46] Do you have one

[00:41:47] that you can share with us today?

[00:41:49] It's not related to anything

[00:41:51] we're talking about,

[00:41:52] but there's this one thing

[00:41:53] that I live by

[00:41:54] is that whatever is meant for you

[00:41:56] will find you

[00:41:57] and nothing can stop that.

[00:41:59] So if you're doing

[00:42:00] all the right things

[00:42:01] and even if when there are bad times,

[00:42:03] if you keep doing the right things,

[00:42:05] the right things will find you.

[00:42:07] I really like that one.

[00:42:09] Thank you for sharing that, Parachi.

[00:42:10] And it's something

[00:42:11] I definitely believe in too.

[00:42:13] So we've come to the close

[00:42:14] of today's conversation.

[00:42:15] It's been a very insightful conversation.

[00:42:18] Thank you, Alberto.

[00:42:20] Thank you, Parachi.

[00:42:21] It's clear that the research

[00:42:23] that you've done

[00:42:24] is very insightful.

[00:42:25] It's packed with value.

[00:42:27] And I do believe

[00:42:29] that if the AFTER protocol

[00:42:31] on digital trade

[00:42:32] is implemented,

[00:42:33] it does hold huge

[00:42:35] or incredible potential

[00:42:37] for not just Nigeria,

[00:42:39] but the wider continent as well.

[00:42:40] So thank you

[00:42:41] for giving us your time today

[00:42:43] and joining us on the podcast.

[00:42:46] Thank you, Tessa,

[00:42:47] for having us here.

[00:42:48] Yeah, this is very interesting.

[00:42:49] Thank you very much.

[00:42:50] This was a great experience.

[00:42:52] We wish you best

[00:42:53] in your podcast series.

[00:42:54] Thank you.

[00:42:56] Thank you to everyone

[00:42:57] who has listened

[00:42:58] and stayed tuned

[00:42:59] to the podcast.

[00:43:00] If you've enjoyed this episode,

[00:43:02] please subscribe,

[00:43:03] share,

[00:43:04] or tell a friend about it.

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[00:43:11] Thank you

[00:43:11] and see you next week

[00:43:13] for the Unlocking Africa podcast.

[00:43:16] Thank you.

[00:43:17] Thank you.