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The African region is the last region to become integrated into the global digital economy. Throughout Africa, platform usage, e-commerce, social network use and mobile money applications are experiencing rapid growth. As African countries respond to the inexorable ‘tractor beam’ of the digital economy, the critical role of governments and regulation is highlighted. Although policy analysts can at times over-emphasise the roles of governments and regulators, it is in fact the markets and market players that hold the keys to the digital economy. These market players are businesses and citizens; the providers and consumers of digital services. The best governments can do, is provide an optimal business environment through appropriate regulations, that is, regulations that protect market players while encouraging digital commerce. However, if governments and regulators get the regulations wrong, they can do more harm than good to digital economy development.

This trade brief outlines the history of, and some of the most important building blocks of the digital economy, as in the things that need to be in place for the digital economy and digital trade to thrive. It also relates these requirements and drivers to the development of the digital economy in Africa and offers some recommendations for policy makers and regulators in Africa.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.