In recent years, the idea of digital markets have gone from being a far-fetched phenomenon to an everyday reality for millions of Africans and have transformed how traditional markets function. As internet penetration increases across Africa, practitioners in the digital market space have found ways to avoid brick and mortar stores, choosing to operate via apps, websites, bank transfers and so on. These digital markets have also attracted the attention of regulators. Regulators from Egypt, Nigeria, Kenya, Mauritius and South Africa have met to discuss the challenges digital markets pose to the local economies in Africa. Similarly across the world, policymakers are reviewing their own policies in managing and regulating digital markets. There are unique issues of competition and the need for collaboration, which raises the issue of the approach to the regulation of these emerging digital markets. Business Edge returns with Tolulope Adeleru-Balogun who is joined by guest analyst, Gospel Obele, Chief Economist at Streetconomics- and they explore the potential of the digital markets on Africa’s economy and how much, if at all, regulation is necessary.
According to reports, Africa already contains half of the world’s mobile money transfer services that make it easy and convenient to transfer money for goods and services, despite the fact that a large population of Africans are unbanked- which leads to the question of if regulators should be involved in the emerging digital market. Gospel Obele says “Even though it makes for optimism and scepticism at the same time, the African market is highly resilient and self-reliant. The growth of the digital market happened because there’s digital savvy, educated, technology-driven market and financial middle-class,” adding that there is yet unaddressed structural issues across these countries seeking to regulate the digital markets, and the government simply has to do more in enabling a market that is technologically driven, which is the way the rest of the world operates now.
However, with countries Egypt, Nigeria, Kenya, Mauritius and South Africa setting up Africa Heads of Competition Dialogue, what does Gospel Obele think about Africa’s tendency to regulate innovation? “It is impressive to see African countries come together to collaborate on a regional conversation. However, there’s the concern of stifling innovation because African countries do not typically get involved [in the development of ideas] and come for regulation in the mid-to-end process.”
Watch Business Edge above.
