Digital economy facilitates stronger Africa-China cooperation

NAIROBI, Sept. 27 (Xinhua) -- Africa has been accelerating digital transformation since the outbreak of COVID-19 and the continent is now a hotspot for rapid growth of mobile payment, electronic commerce, remote work and online education.

The booming internet market is offering more opportunities for cooperation between Africa and China that are both at the forefront of the world's digital evolution.

DRIVING RECOVERY

The COVID-19 pandemic is hitting Africa hard. African countries have imposed sometimes severe restrictions on populations to contain the spread of the coronavirus, including lockdowns and curfews. As a result, digital payments and e-commerce have become a new norm for households, playing a crucial role in scaling up economic recovery on the continent.

"People basically have gone cashless right now, and it's convenient to use mobile money as everyone has one now. It's a win for both clients and us," said Mirriam Maluli, a menswear store owner in the city center of Nairobi, Kenya.

South Africa's leading online payment gateway PayFast reported its transactions via QR code payments surged 412 percent between March 2020 and February 2021, as digital payments are convenient and safe for people whether shopping in person or online.

The pandemic has also pushed a surge in internet demand and network connectivity. Kenya's telecommunications service provider Safaricom PLC registered a 39.8 percent year-on-year growth in active 4G devices and a 43.7 percent rise in homes connected for fiber-to-the-home service between April 2020 and March 2021.

A recent survey by Dalberg Group, a global consulting firm, found that digital devices and services have improved the daily lives of 84 percent of Kenyans, while nearly one third said using digital services has boosted their incomes.

According to a report released in April by Visa Consulting and Analytics, Visa Inc.'s payments consulting arm, sub-Saharan Africa registered a 42 percent year-on-year growth in e-commerce sales from 2019 to 2020.

STRONGER COOPERATION

The pandemic has provided a growth opportunity for cooperation between Africa and China on digital transformation.

Cainiao Smart Logistics Network, the logistics arm of Chinese e-commerce giant Alibaba Group, launched an air cargo route between China and Nigeria in June, marking its first China-Africa air freight service.

"As one of Cainiao's key emerging markets, Africa has witnessed a booming demand from local consumers purchasing items such as apparel, home appliances and electronic accessories from China," said Cainiao in a press release.

Founded by Chinese entrepreneur Yang Tao, Kilimall is one of the major e-commerce platforms operating in east Africa. Lu Xiaoyong, marketing manager at Kilimall, told Xinhua that Kilimall sales have more than doubled since the pandemic.

According to Lu, consumers in Africa have moved from offline to online due to the pandemic-related lockdown measures, providing an opportunity for e-commerce expansion in Africa.

With more African households embracing online shopping, the e-commerce market will continue to boom following rising smartphone penetration rate, increasingly mature mobile payment systems and falling mobile data costs, said Lu.

In an interview with Xinhua, Sitoyo Lopokoiyit, CEO of M-Pesa Africa, Africa's leading fintech platform operator, said there are good opportunities for Africa to partner with China and make the digital technology reach more people on the African continent.

OPay, a Chinese-backed Nigerian fintech startup, is expanding rapidly and bringing accessible banking service to more vulnerable people during the pandemic.

Qiu Zhien, CEO of Opay Nigeria, told Xinhua that Opay now has 7 million registered app users across the country, with monthly gross transactions exceeding 3 billion U.S. dollars.

PROMISING OUTLOOK

Despite the pandemic, Africa has shown strong growth potential. According to the United Nations Economic Commission for Africa, the African continent was projected to grow at a rate of 3.9 percent in 2020 and 4.1 percent in 2021, making the region one of the most attractive markets in the world.

"Our data indicates that the appetite for businesses to move online hasn't slowed down. Digital payments are increasingly becoming the standard for retail in our current climate," said Jonathan Smit, managing director and founder of PayFast, in a statement.

A report jointly produced by Google and the International Finance Corporation estimated that Africa's internet economy would reach 180 billion U.S. dollars by 2025, accounting for 5.2 percent of the continent's gross domestic product (GDP). By 2050, the potential could grow further to 712 billion dollars, or 8.5 percent of GDP.

According to the e-Conomy Africa 2020 report, propelling the growth is a combination of increased access to faster and better quality internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa's commitment to creating the world's largest single market under the African Continental Free Trade Area.

Huang Meibo, director of International Development Cooperation Academy at Shanghai University of International Business and Economics, told Xinhua that Africa is one of the regions in the world where its population is younger and growing faster, with 60 percent of the population under the age of 25.

In the long term, Huang said, Africa is poised to become one of the most promising digital economy markets in the world.