Gozem started modestly as a motorcycle-hailing app in 2018. Since then, the company has morphed into a super-app offering a panoply of services, from food delivery and e-commerce to vehicle leasing and digital payments. Beyond providing intra-country services, Gozem enables digital payments and financial transactions across different West African markets, fostering regional economic integration. It has expanded beyond its base in Togo and now has over one million users in countries including Benin, Gabon, and Cameroon.
Gozem’s success highlights the potential that trade in digital services holds for Africa. In Morocco, Egypt, Ghana, and Madagascar, growth in digital services trade since 2015 has exceeded the global pace, boosted by business-process outsourcing and information technology. Across the continent, exports of digital services are projected to increase by US$74 billion from 2023 to 2040, doubling Africa’s global share, according to a joint report by the World Bank and the World Trade Organization.
Harmonized regulations and improved digital connectivity have the potential to reduce trade-in goods costs by up to 20 percent and in services by up to 30 percent, the report found. One reason: Digitally delivered services avoid some of the obstacles to trade in Africa, such as poor roads and cumbersome border procedures. And by bringing suppliers into direct contact with customers, digital trade fosters inclusiveness, especially benefiting small firms, women, and young people.
Fulfilling the potential for digital services trade, however, will require improvements to the regulatory environment to enable more efficient cross-border payments. To that end, the World Bank helps governments strengthen regulations in areas such as cybersecurity, data protection, digital IDs, electronic signatures, online consumer protection, cross-border data transfers, among others.
The starting point for such efforts is an assessment of regulatory gaps. A World Bank-WTO analysis covering six African countries found that regulations are often outdated, insufficient, or overly restrictive, particularly in key areas such as cross-border data flows, e-signatures, and online consumer protection. In some cases, the lack of clear legal guidelines can create uncertainty. These shortcomings hinder the ability of digital firms to expand across borders, innovate, and scale.
For example, Benin requires government authorization for all cross-border data transfers, causing operational delays and increasing compliance costs for digital businesses. Cote d’Ivoire also requires approval of data transfers, while Ghana doesn’t regulate them. In Kenya, the Cabinet Secretary has the authority to mandate that certain types of personal data processing be conducted exclusively through servers or data centers located within the country. Rwanda, on the other hand, mandates local storage of all personal data and permits its storage outside the country only with certification obtained from the supervisory authority.
Across the continent, weak protection against online fraud leaves consumers vulnerable, eroding trust in digital platforms. In Benin, for example, a significant portion of internet users and businesses are unaware of the country’s Digital Code, highlighting the need for stronger enforcement and education to improve digital trust and compliance. Gozem said it tackled this issue by building its own consumer protection regime and secure payments system. Gozem founders Raphael Dana and Gregory Costamagna said they are providing feedback to help authorities to develop effective regulations that would help other startups flourish – and provide much-needed services.
Gozem’s motorcycle-hailing services fulfill a critical need on a continent where there are just 44 vehicles per 1,000 inhabitants, compared with a global average of 180, and where most people use communal taxis or moto-taxies to get around. By 2022, Gozem had 12 million drivers across West and Central Africa. A US$10 million investment by the International Finance Corporation, a member of the World Bank Group, made it possible for 2,000 drivers to get financing to acquire vehicles. One driver, Razack Pereira, had been working informally with a dilapidated motorcycle, struggling to make ends meet. With Gozem’s support, he was able to buy a new car and increased his income tenfold.
Jumia, an online shopping platform, offers another example of how digital services trade provides opportunities for small-scale retailers. Launched in Nigeria in 2012, it has since expanded across the continent and provides a centralized online marketplace for third-party vendors of products such as electronics, fashion, and groceries. Its logistics network includes over 36 partners and multiple pickup points across more than 100 cities in Côte d’Ivoire alone, ensuring efficient delivery even to remote areas. The company is also driving financial inclusion through JumiaPay, a platform that makes it possible to securely pay utility and other bills.
The stories of Gozem and Jumia highlight the potential of digital platforms to drive meaningful change, but their success also underscores the critical need for supportive policies, stronger infrastructure, and regional collaboration. By addressing the regulatory gaps, policymakers can significantly boost the capabilities of Africa’s digital firms and strengthen its position in the global digital economy.
The World Bank is playing a pivotal role by providing technical assistance to draft comprehensive digital trade policies, investing in infrastructure to improve connectivity, and offering capacity-building programs for government officials to enhance their understanding of digital trade governance. The bank can also facilitate regional cooperation to harmonize digital trade regulations and promote digital market integration, making it easier for digital firms to expand and contribute to the continent’s global competitiveness.
While the digital challenges in Africa are significant, so too are the opportunities.
