Digital market space to create over 3 million job in Africa – Report

The digital market space could create over 3 million new jobs in Africa over the next six years.

This is according to a new report released on Thursday by a business consulting firm, Boston Consulting Group (BCG), which says the government needs to put up clear regulations to govern the digital market space to achieve growth in the digital sector.

Around 80 percent of the new jobs created by the online market places are anticipated to be on the consumer goods sector, mobility market places as well as hospitality and travel sectors.

The African Development Bank estimates that one-third of 420 million Africans aged between 15 and 35 were unemployed as of the year 2015.

Speaking during the unveiling of the report in Nairobi, BCG Principal Zineb Sqalli said Africa needs 1.7 million new jobs every month to bridge the current employment gap.

“Generating employment is an urgent priority across the continent. When you look at Kenya 60 percent of the population consists of the youth who are mostly unemployed, “said Sqalli.

Locally, Kenya hosts a number of e-commerce platforms including Jumia, Uber, Masoko and Afrika Sokoni. Globally, platforms such as Amazon, eBay and Alibaba have dominated the sector.

However, the report further shows that for online market places to reach their full potential, there is need for public and private partnerships — a move that will help build the right digital environment from the outset.

Underdeveloped infrastructure, lack of regulatory clarity, illiteracy and inadequate digital skills and access to funding and markets are among the key challenges that these platforms face despite their economic promise.

The report also highlighted that there are minimal chances that e-commerce will displace existing retailers because much of the population is under-served.

There are only 15 stores per one million inhabitants in Africa compared with 568 stores per million in Europe and 930 stores per million in the US.

The report recommends that the digital market platforms and African governments collaborate to address the challenges that hinder growth of the sector.

This comes after the United Nations Conference on Trade and Development (UNCTAD) proposed that the government puts clear regulations to govern the e-commerce sector.