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State of the African digital economy

Africa’s digital economy is on a growing trend. This is a result of a combination of factors, from improved internet access and the presence of vibrant startup ecosystems to improvements in policy frameworks. But there are disparities between countries. For instance, when it comes to e-commerce readiness, South Africa scored 56.5 points in UNCTAD’s 2020 index, compared to only 5.6 for Niger.

Read full report Stronger digital voices from Africa: Building African digital foreign policy and diplomacy.


In 2012, Africa’s digital economy was estimated at roughly 1.1%, or US$30 billion of its GDP.1Kende, M. (2017). Promoting the African Internet Economy. In 2020, estimates indicated a contribution of 4.5%, or US$115 billion. This growth is expected to continue in the coming years. A 2020 study by Google and the International Finance Corporation (IFC) found that the digital economy could contribute US$180 billion (5.2%) to the continent’s GDP by 2025, and US$712 (8.5%) billion by 2050 (Table 12). Reasons behind this estimated growth include better quality internet connectivity and improved access, vibrant startup ecosystems, growing tech talent pools, and improvements in policy and regulatory frameworks (including the launch of the African Continental Free Trade Area).2Google and the International Finance Corporation [IFC]. (2020). e-Conomy Africa 2020. Africa’s $180 billion Internet economy future.

Table 12. Contribution of the internet economy to African GDP (iGDP).3Google and the International Finance Corporation [IFC]. (2020). e-Conomy Africa 2020. Africa’s $180 billion Internet economy future.

Year iGDP (billions) iGDP as % of GDP GDP (billions)
2019 US$100 3.9% US$2,580
2020 US$115 4.5% US$2,554
2025 US$180 5.2% US$3,446
2050 US$712 8.5% US$8,342
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Some countries are on an especially rapid trajectory (Table 13). For example, by 2025, the share of the economy powered by the internet in Kenya, Morocco, Senegal, and South Africa will be between 7% and 9%.4Accenture. (2022). Tuning into Africa’s digital transformation.  

Table 13. Contribution of the internet economy to African GDP (iGDP) in some selected countries.5Google and the International Finance Corporation [IFC]. (2020). e-Conomy Africa 2020. Africa’s $180 billion Internet economy future.

Country 2020 (US$B) 2020 (%) 2025 (US$B) 2025 (%) 2050 (US$B) 2050 (%)
Kenya 7.42 7.70% 12.84 9.24% 51.07 15.17%
Morocco 7.80 6.82% 12.09 7.84% 48.06 12.88%
South Africa 21.55 6.51% 31.45 7.86% 125.08 12.92%
Senegal 1.51 6.22% 2.92 7.11% 11.61 11.68%
Nigeria 24.59 5.68% 36.53 6.86% 145.28 11.27%
Algeria 9.02 5.60% 11.92 6.16% 47.39 10.12%
Cameroon 2.06 5.39% 3.27 6.19% 13.00 10.16%
Côte d’Ivoire 3.18 5.27% 5.53 6.04% 21.98 9.92%
Egypt 15.41 4.98% 25.97 5.99% 103.29 9.83%
Rwanda 0.52 4.98% 0.97 5.96% 3.85 9.79%
Ghana 3.01 4.42% 5.01 5.31% 19.94 8.73%
Tanzania 2.57 3.98% 4.28 4.57% 17.03 7.50%
Uganda 1.36 3.82% 2.26 4.18% 8.97 6.87%
Mozambique 0.37 2.45% 0.67 2.81% 2.65 4.62%
Angola 2.02 2.17% 2.88 2.38% 11.44 3.91%
Ethiopia 1.26 1.27% 2.02 1.39% 8.03 2.28%
Rest of Africa 11.62 1.96% 18.55 2.16% 73.76 3.54%
Total 115 4.5% 180 5.2% 172 8.5%
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E-commerce, fintech, healthtech, and media and entertainment are among the sectors that drive the growth of Africa’s digital economy and the continent’s overall digital transformation.6Google and the International Finance Corporation [IFC]. (2020). e-Conomy Africa 2020. Africa’s $180 billion Internet economy future. 

The e-commerce picture across Africa is one full of contradictions. On the one hand, the e-commerce industry has grown considerably in the past decade, due to a combination of factors, such as growing internet penetration rates, the spread of mobile telephony and mobile money services, and increased use of credit cards and access to bank accounts. On the other hand, the average index of e-commerce readiness of African countries is still low compared to other developing regions and developed countries (Table 14).

Table 14. Regional values for the UNCTAD B2C E-commerce Index, 2020.7United Nations Conference on Trade and Development [UNCTAD]. (2021). The UNCTAD B2C E-commerce Index 2020. The index measures the readiness of countries to engage in online commerce. It is a composite indicator including four indicators: internet use penetration, secure servers per 1 million inhabitants, credit card penetration, and a postal reliability score.

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There is also a significant disparity among countries when it comes to their participation in e-commerce. Table 15 provides a list of the top 10 developing countries and transition economies in the UNCTAD B2C E-commerce Index by region, showing the countries that have scored the highest in Africa in 2020. Within the overall index, the African countries that score the highest are Mauritius (58.4), South Africa (56.5), Tunisia (54.6), Algeria (52.2), and Ghana (51.9), while Burundi (8.3), Chad (7.1), and Niger (5.6) have the lowest scores.

Table 15. Top 10 developing and transition economies in the UNCTAD B2C E-commerce Index 2020, by region.8United Nations Conference on Trade and Development [UNCTAD]. (2021). The UNCTAD B2C E-commerce Index 2020.

East, South & Southeast Asia West Asia Africa Latin America and the Caribbean Transition economies
China, Hong Kong SAR
Korea, Republic of
Iran (Islamic Republic of)
Viet Nam
Saudi Arabia
South Africa
Costa Rica
Dominican Republic
Trinidad and Tobago
Russian Federation
North Macedonia
Republic of Moldova
Bosnia and Herzegovina
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In 2020, Africa had over 600 unique business-to-consumer online marketplaces for physical goods. Only 10 marketplaces attracted 84% of the overall web traffic to such platforms. The top 10 countries with the largest number of marketplaces were South Africa, Morocco, Tunisia, Egypt, Algeria, Kenya, Senegal, Nigeria, Ghana, and Côte d’Ivoire. Most marketplaces were not open to sellers from foreign countries: Only 20% of the marketplaces were operating in multiple African countries or worldwide, but they represented almost 75% of all marketplace websites in Africa.9International Trade Centre [ITC]. (2021). African Marketplace Explorer.

There are several challenges for African countries to take advantage of e-commerce.  

These can be found across three layers: a) the digital society considered broadly, which encompasses challenges related to access to infrastructure, cybersecurity, and capacity development on digital issues, for example; b) the digital economy, which depends on the provision of services, such as electronic payments, digital signatures, and cloud computing; c) e-commerce more specifically, which encompasses issues related to trade facilitation, access to markets, and the observance of basic principles, such as transparency and non-discrimination (Figure 40). 

The regulatory framework also shows some important gaps at the national and regional levels. The speed with which African governments have adopted laws, policies, and regulations to foster e-commerce and the advancement of the digital economy varies significantly.10United Nations Conference on Trade and Development [UNCTAD]. (2020). Member States of the WAEMU eTrade Readiness Assessment.

Digital Commerce infografic
Figure 40. The interplay between e-commerce issues and wider digital policy issues.

Support from international organisations and development cooperation bodies

The support of international organisations and development cooperation bodies has been important for the continent’s digital transformation. For example, the Economic Community of West African States (ECOWAS) e-commerce strategy is being developed with the support of UNCTAD’s E-commerce and Digital Economy Programme, with funds from the government of the Netherlands. The German Federal Ministry for Economic Cooperation and Development has supported the development of the e-commerce strategy for the EAC, by means of the Pan-African e-Commerce Initiative.11German Agency for International Cooperation [GIZ]. Promoting e-Commerce in Africa.  

International support has also been relevant to the development of frameworks at the national level. For example, the World Bank has sponsored the e-Transform project, which has assisted Ghana with digitising its economy, especially e-government service delivery, e-commerce and e-payments. This initiative is being undertaken to promote efficiency in areas such as education, health, and judicial and parliamentary services, through the use of ICTs. 

Digitalisation is at the forefront of the EU’s geopolitical strategy towards Africa, as a way to promote sustainable development and economic growth. This has been reflected in development cooperation efforts and in the intervention of international financial institutions throughout the years. More recently, in February 2022, the EU announced a plan to invest up to €150 billion in Africa over the next seven years, in five priority areas, including accelerating the digital transition.The European Investment Bank (EIB) has been providing overall support to Africa’s transition to a digital economy, articulating around six complementary areas of intervention: universal access to affordable connectivity, digital services, financial inclusion, entrepreneurship, cybersecurity and green power alternatives.12European Investment Bank [EIB]. (2021). The rise of Africa’s digital economy. The European Investment Bank’s activities to support Africa’s transition to a digital economy.