E-commerce is now the new revolution. Driven by the growing digitized world, surfed by increasing number of users, electronic transaction is making business simple and accessible. Nowadays, it is estimated to be about a 6 trillion USD business in the world. Electronic transaction covers about 7 percent of world’s transaction and it is the most growing approach.
However as more firms continue to invest and deepen their toe in the transaction, in Ethiopia, the practice of electronic transaction has also been very poor. Ranging from a yet to be developed internet infrastructure to absence of legislations, Ethiopia’s e-commerce sector, which is at its very early times, is beset by different challenges.
In what could be a promising move the youngest sector, Ethiopia has begun preparing a drafts proclamation to give the electronic transaction a legal framework guidance. Speaking at the discussion forum, Eng. Getahun Mekuria (PhD) Minister of Innovation and Technology said that Ethiopia experiences low electronic transactions due to lack of required legislations and incompetence and other factors. The draft proclamation will offer legal protection to financial and non financial institutions doing electronic transactions.
In turn, it helps to counter illegal transaction, the Minister added. “To improve national efficiency, the Ministry is striving to digitalize the economy as well as foster e-governance”, he added. The proclamation also would allow the use of electronic money under legal circumstances. The fact that Ethiopia stands 159th on World Ease of Doing Business list is mainly due to poor electronic transactions, as to him.
Defining the scope of application, he underlined the Electronic Transaction proclamation will govern transactions through messages, e-money, domain name administration and other forms of IT applications. Expected to legalize and formalize e-commerce in Ethiopia, the preamble of the drafted proclamation reads “A responsive information and communication technology legal framework that shall facilitate competition, development of information and communication technology and the participation of Ethiopia in the information age and economy has to be put in place”.
Banks, private enterprises other stakeholders took part in the discussion of the draft proclamation which is expected to facilitate electronic transactions in the country. Wogagen Bank S.C leader’s team member, Medhanie Tadele also stressed the need to digitalize the nation’s economy via electronic transaction. But he argued the form of application which outlined in drafted proclamation does not consider the real situation of the nation.
Accordingly, e-commcerce can face increased competition from international companies since Ethiopian societies are not familiar with business, as to him. Hence, the application of the transaction should well be integrated to the current situation . Legal Service Directorate Director at National Bank of Ethiopia, Kibre Moges also emphasized the need for well organized legal framework to handle electronic transactions since the application needs more sophisticated technology.
Entrepreneur and CEO at Abate Technologies and Electronic Solution, Adam Abate also insisted for swift procedures for the transaction to be competitive and grow more. “Especially, e-money should be applicable after taking perquisites otherwise it will result in bankruptcy since e-money covers high volume with low margin”, he added. The draft proclamation upon approval is expected to formalize the business and give legal guaranty financial and non financial institutions doing the business. And it also help to counter illegal online business undertakings and forgery.
The Ethiopian Herald April 21/2019
BY YESUF ENDRIS
