Malawi’s e-commerce penetration low—report

Despite Malawi making efforts to enhance the role of technology within the overall national development policy framework, the business environment for communication technology uptake remains weak, a new UN report shows.

The United Nations Conference on Trade and Developmennt (Unctad) Malawi Rapid e-Trade Readiness Assessment report launched virtually last week by Minister of Trade Sosten Gwengwe shows that overall, the e-commerce enabling environment in Malawi faces a number of challenges.

The challenges, according to the report, include the population’s lack of trust in online systems, low level of Internet access by the population, low technology adoption by firms, lack of access to financing and weak information and communication technology(ICT) skills across the population.

Reads the report in part:  “Despite Malawi turning its attention to the benefits of ICT for national development, the efforts made to change the policy and regulatory landscape, digital economy and e-commerce are not yet well captured in national policies, nor are they translated into a focused stand-alone strategy.”

Unctad has since recommended that government should mainstream e-commerce into national development programmes, make further investments in the ICT sector and formulate a robust awareness programme on e-commerce, among others.

Currently, available figures show that only 13.8 percent of the country’s population uses the Internet.

This is despite numerous developments in the sector, including extension of fibre-optic backbone and cross-border interconnections, the launch of 4G, the establishment of the Universal Service Fund, whose overall goal was to have the country’s Internet connectivity improve and charges remarkably drop.

Malawi still lags behind on Internet connectivity characterised by high charges, low penetration rates and poor service provision, contributing to high cost of doing business, limited innovation and poor information flow, according to the report.

The report further says that taxation, market and regulatory structures that do not encourage competition also slow down efforts for price reductions in mobile data packages and extension of broadband coverage.

Commenting on the report, Gwengwe observed that e-trade can help to diversify the economy, create jobs and build resilience.

He said government has started addressing some of the challenges to advance e-commerce.

Said Gwengwe: “The report has identified areas for improvement, including investment in ICT infrastructure which would indeed reduce the cost of Internet which is very high in Malawi and also improve connectivity which is very low.

“This calls for the need for a coordinated multisectoral stakeholder approach with well-defined champions. The issues are cross-cutting and have to be addressed in a coordinated manner.”