UNCTAD e-commerce assessment reveals Ghana’s digital economy potential and challenges

The assessment of Ghana’s e-commerce readiness has unveiled a landscape characterized by significant potential and a burgeoning interest in fostering the digital economy.

The assesment of Ghana’s e-commerce landscape by the United Nations Conference on Trade and Development (UNCTAD) has shed valuable insights on the multifaceted challenges encountered by the country in the journey towards digitalization and the responses to these challenges in the form of government initiatives.

E-commerce Readiness and Strategy

Ghana has consistently demonstrated its commitment to the digital economy’s evolution through a series of strategic initiatives. These efforts are deeply embedded within frameworks like Ghana’s Digital Agenda (2018) and the Ghana Beyond Aid Charter and Strategy (2019), both of which offer substantial support for economic digitalization.

The Ministry of Communication and Digitalisation (MOCD) has steered the formulation of a comprehensive digital strategy aimed at positioning Ghana as an ICT innovation leader in sub-Saharan Africa by 2023 and an African digital economy front-runner by 2028.

These endeavors span a wide spectrum, ranging from legislative and regulatory frameworks to the expansion of broadband infrastructure and the promotion of ICT accessibility and skills development. Key national agencies, notably the National Information Technology Agency (NITA) and the National Communication Authority (NCA), play pivotal roles in shaping this digital transformation.

The government has complemented these efforts by introducing a suite of digital platforms to digitize a range of public sector services, encompassing e-procurement, e-immigration, e-taxation, e-parliament, e-judiciary, and the GhanaCard.

However, to streamline institutional arrangements, enhance leadership clarity, and bolster communication and monitoring of ongoing actions, the formulation of a dedicated e-commerce strategy is regarded as imperative. Building awareness among stakeholders and actors is pivotal for bolstering consumer protection and instilling confidence in e-commerce as a secure mode of trade. This requires fortifying the capacities of the judiciary and law enforcement agencies and completing the legal framework for the business-to-business sector.

ICT Infrastructure and Services

Significant investments and endeavors have significantly augmented Ghana’s ICT infrastructure and internet accessibility. In 2023, Internet penetration reached 76% of the Ghanaian population. Nevertheless, challenges linger, particularly in extending meaningful Internet access, especially at broadband speeds and in rural areas, where the digital divide continues to present a considerable obstacle.

Trade Logistics and Facilitation

Ghana has introduced a digital addressing system, laying the groundwork for trade logistics enhancement. Nevertheless, logistics and delivery services remain subject to structural deficiencies that challenge inclusive e-commerce development. Collaborative efforts between postal and customs services are deemed essential to improve coordination and reduce clearance times for postal parcels.

In terms of trade facilitation, Ghana stands as a prominent actor in the implementation of the Trade Facilitation Agreement and ranks first among ECOWAS countries in the customs dimension of the Logistic Performance Index. In 2023, Ghana further solidified its commitment to trade facilitation by ratifying the African Union Convention on Cross-Border Cooperation.

Payment Solutions

Ghana’s strides in financial inclusion have materialized through the Bank of Ghana’s Payment System Strategy (2019–2024), designed to advance digitalized payment solutions. Notably, a burgeoning share of Ghanaian adults possesses formal financial accounts, reaching 72% in 2021. Simultaneously, active mobile money account ownership stands at 89%, according to the Financial Access Survey.

Nevertheless, challenges remain as the cost of digital payments remains high, trust in digital payments is limited, and the penetration rates of debit and credit cards are modest, serving as impediments to widespread digitalized payment adoption.

Legal and Regulatory Frameworks

Ghana has laid a robust legal framework for e-commerce, comprising legislation such as the Electronic Transactions Act and the Cyber Security Act. Nevertheless, effective implementation and heightened awareness are imperative to reinforce consumer protection and trust in e-commerce.

E-commerce Skills Development

Despite the expansion of digital skills training opportunities in Ghana, support for digital skills development in the e-commerce ecosystem remains essential. The labor market encounters a shortage of Ghanaian entrepreneurs possessing requisite digital skills, signaling a supply-demand gap. Additionally, limited access to technological education at universities further compounds this challenge.

Access to Financing

To nurture small businesses, support is vital to broaden access to financing. Digital start-ups, in particular, grapple with funding challenges, with limited interest from commercial banks that often demand partners or guarantees. Entrepreneurs frequently lack the requisite management and financial skills to present viable financial plans to potential financing partners and institutions.

In sum, Ghana possesses a promising foundation to foster and strengthen its digital economy, with an array of resources and opportunities aimed at job creation and sustainable economic growth. An Action Matrix is now proposed, featuring a set of suggested actions designed to accelerate government policies and support e-commerce development.

Insights gleaned from UNCTAD consultations underline areas requiring attention, including high-level political support, institutional coordination, trade logistics, legal frameworks, and access to finance. Ghana’s potential is evident, with a dedicated vision and strategy, it can tap into its promising digital prospects and foster comprehensive e-commerce development.