How Small Businesses In Africa Can Benefit From E-business

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How Small Businesses In Africa Can Benefit From E-business:

Individual Action:
Even in challenging environments such as Africa, small businesses can still benefit from e-business. Simple information websites with product and contact information, as a first step can open new doors for small businesses locally and internationally. Hospitality industries stand to gain more exposure and market through e-business. Tourists and people in the Diaspora are excellent target customers for hotel and tourism information for online reservations.

Group Action:
Business associations, Chambers Of Commerce, Cooperative societies, and NGOs in Africa can bridge the economy of scale on the technology required for e-business by setting up online malls showcasing a pool of their members’ sites, products and services. Through the online shopping mall, diaspora residents can order local products for their friends or family. These associations can also help ensure the quality of products advertised on the site as well as the credibility of their members to ensure that scammers do not take advantage of this opportunity.

Only certified members and certified products will be featured on the website. For example, the “Ghana Mall” sells products from Ghanaian artisans around the world. In addition, about $500 million in goods and $
million in cash are brought into the country from abroad every year. Funding for the development of such shopping centers can come in the form of grants from multilateral organizations such as the Small and Medium Enterprises Department of the World Bank Group (http://www.ifc.org/sme).

Payment:
Credit card acceptance is undoubtedly at the heart of e-commerce, but technological barriers and local currency transactions can increase transaction costs. There are rules and protocols for accessing international card association systems that do not currently benefit African countries. Online transaction amounts from most African countries hardly comply with the regulations of international card associations. So there has to be a way. African banks must therefore open special “merchant accounts” for small businesses so that they can accept secure payments in foreign currencies like credit cards. Online payments must still be made via SWIFT, encryption or other secure websites such as PayPal to ensure adequate security.

Shipping:
Most national and international couriers are now equipped to ship anywhere in the world. Companies can partner with these postal and shipping agencies to benefit from special shipping rates or develop more efficient shipping methods that ensure delivery. In addition, the Customs department should make available list of prohibited items, duties and fees to the business organizations. One workable model is to post their personnel at the post offices to facilitate the inspection of goods.