BD Insider, Letter 100: The yin and yang of digitising Africa's informal retail sector

BD Insider, Letter 100 explores the ying and yang of digitising Africa's informal sector, the Central Bank of Kenya's plan to adopt digital currencies.

BD Insider, Letter 100: The yin and yang of digitising Africa's informal retail sector

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This is the 100th letter that we've sent to BD Insiders. Amazing!
What's inside?

  • The yin and yang of digitising Africa's informal sector.
  • Central Bank of Kenya's plan to adopt digital currencies.

This letter is brought to you in partnership with Fincra.
Let's dive in!

The yin and yang of digitising Africa's informal sector.

When e-commerce took off in Africa at the start of the 2010s, the major players that emerged were mostly online stores and marketplaces. From South Africa’s Bidorbuy and Takealot to Nigeria’s Dealdey and Jumia, which self-describes Africa's Amazon. (Would Amazon acquire Jumia as Stripe bought Paystack which branded itself as the Stripe for Africa? Amazon acquired Middle Eastern e-commerce company Souq in 2017).

To become a leading e-commerce startup in Africa and keep to their promise of ease and convenience, they had to do two or more of these: have an expansive inventory and invest heavily in marketing and ancillary solutions such as payment and fulfilment, which includes building warehouses and last-mile delivery service.

More than a decade later, the emerging big guns of e-commerce in Africa are neither an online store nor a marketplace. Instead, they are enabling e-commerce by providing O2O (offline to online and online to offline service) services. These services cut across sales/demand generation, inventory/content management systems, payment/fintech solutions, and supply chain.

With the O2O services, retailers/merchants and brands can set up their online stores and sell to customers directly. They can also drive online customers to their brick and mortar store.

It’s worthy of note that fintech, logistics and some other non-native e-commerce startups can and are participating in this New Retail or O2O e-commerce era. Like our sponsor, Fincra. As a business that serves customers online, you can collect payments from individuals and other businesses at no extra cost.

This chart shows some of these companies enabling e-commerce, their kind of service, and their primary target market. (Please, let me know if you have suggestions.) In subsequent letters, I'll go deeper into selected e-commerce enablers and how they are solving the problems of e-commerce in Africa. Because as we all know fulfilment is at the epicentre of e-commerce and its enablement.


Fincra gives fintechs access to reliable payment APIs, allowing them to offer more solutions to their customers and scale their services across Africa. The APIs are simple to integrate and are designed to fit into any existing payment application. Learn more.

Kenya's Central Bank seeks public opinion on the adoption of digital currencies.

Last week, the Central Bank of Kenya (CBK) issued a discussion paper on the full adoption and implementation of a digital currency in the country. The paper will provide the basis for a public discussion, noting that cost reduction, interoperability and enhanced cross-border payments would be the main drivers for the digital currency’s adoption in the country.

“A CBDC issued by CBK would be a sovereign currency in an electronic form and it would appear as a liability on CBK’s balance sheet and an asset to users holding it. The underlying technology, form and use of a central bank digital currency (CBDC) would need to be designed to meet the specific/identified needs of consumers”, CBK stated.

According to Atlantic Council, 87 countries are exploring a CBDC. This represents over 90% of the global gross domestic product [(GDP) is the most commonly used measure for the size of an economy].

In October 2021, Nigeria launched eNaira, its central bank digital currency. Meanwhile, Ghana indicated that they are in the advanced launching stage of the e-cedi. Zambia is also carrying out research that will see to the launch of its CBDC. Across the globe, only nine countries have launched digital currency while fourteen are in the pre-launch stage.

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Thanks for reading and sharing
Have a great week!
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🖊 Johnstone and Daniel

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