Advancing AfCFTA digital trade implementation in Ghana

Chivunga, Michelle; Abudu, Derrick; Lemma, Alberto Research Report Advancing AfCFTA digital trade implementation in Ghana ODI Report Provided in Cooperation with: ODI Global, London Suggested Citation: Chivunga, Michelle; Abudu, Derrick; Lemma, Alberto (2024) : Advancing AfCFTA digital trade implementation in Ghana, ODI Report, Overseas Development Institute (ODI), London This Version is available at: https://hdl.handle.net/10419/313879 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ Advancing AfCFTA digital trade implementation in Ghana Michelle Chivunga, Derrick Abudu and Alberto Lemma October 2024 Supporting Investment and Trade in Africa (SITA) Report ODI Report 2 Readers are encouraged to reproduce material for their own publications, as long as they are not being sold commercially. ODI requests due acknowledgement and a copy of the publication. For online use, we ask readers to link to the original resource on the ODI website. The views presented in this paper are those of the author(s) and do not necessarily represent the views of ODI or our partners. This work is licensed under CC BY-NC-ND 4.0. How to cite: Chivunga, M., Abudu, D. and Lemma, A. (2024) Advancing AfCFTA digital trade implementation in Ghana. ODI Repor. London: ODI (https://odi.org/en/publications/advancing-afcftadigital-trade-implementation-in-ghana) ODI Report 3 Acknowledgements This report was prepared under the Supporting Investment and Trade in Africa (SITA) Programme, an initiative funded by UK International Development from the UK government to support the negotiations and implementation of the African Continental Free Trade Area (AfCFTA). All views provided are those of the authors and not the responsibility of ODI, the AfCFTA Secretariat or the UK Government. The authors want to express their appreciation for the comments received from Dr Karishma Banga. We would also like to thank participants from the Ministry of Trade and Industry, Ghana; Ministry of Communications and Digitalisation, Ghana; the AfCFTA Secretariat; and the private sector, who shared their expertise and experience during the workshop ‘Assessing the AfCFTA Digital Trade Protocol: Implementation and Impact on Ghana’. Any errors are the responsibility of the authors. About the authors Michelle Chivunga is the Chief Executive of Global Policy House (GPH) Derrick Abudu is a Senior Research Officer at ODI. Alberto Lemma is a Research Fellow at ODI. ODI Report 4 Contents 1 Introduction ................................................................................. 10 2 Ghana’s digital economy ............................................................. 12 2.1 Digital trade and e-commerce ..................................................... 12 2.2 Ghana’s ICT sector ..................................................................... 13 2.3 Digital trade and the fintech landscape in Ghana ....................... 16 3 Review of existing policies, laws and regulations governing digital trade ............................................................................................ 21 3.1 Laws and regulations .................................................................. 21 3.2 Policies ........................................................................................ 25 3.3 Comparison with other countries ................................................. 25 3.4 Digital trade challenges for Ghana: some existing gaps ............. 26 3.5 Areas for improvement for Ghana ............................................... 30 4 Ghana’s technological infrastructure and e-commerce capabilities .................................................................................................... 31 4.1 Components and enablers of a digital trade ecosystem ............. 32 4.2 Digital payments .......................................................................... 35 4.3 Digital identity .............................................................................. 35 4.4 Digital technologies ..................................................................... 37 4.5 Digital platforms .......................................................................... 38 4.6 Digital skills ................................................................................. 38 5 Perceptions and understandings of the AfCFTA among stakeholders in Ghana ................................................................ 39 5.1 Expanding market horizons ......................................................... 39 5.2 E-commerce as a growth driver .................................................. 40 5.3 Digital infrastructure readiness .................................................... 40 5.4 Knowledge gap and capacity-building ......................................... 41 5.5 Regulatory clarity and support .................................................... 41 5.6 Perceptions of the regulatory environment ................................. 42 5.7 Additional benefits of the AfCFTA Protocol ................................. 43 5.8 Awareness of the AfCFTA Protocol ............................................ 43 5.9 Capacity for handling digital trade ............................................... 44 5.10 Involvement in negotiations and preparations ............................. 44 5.11 Policy and regulatory framework ................................................. 44 5.12 Infrastructure readiness and challenges ..................................... 45 5.13 Barriers to digital trade ................................................................ 45 5.14 Skilled labour and innovation policies ......................................... 46 ODI Report 5 5.15 Collaboration for implementation ................................................ 47 5.16 Support and capacity-building initiatives ..................................... 47 6 Estimating the potential impacts of the Protocol on Digital Trade on Ghana’s economy ....................................................................... 49 6.1 Estimating the potential impacts of increased digital penetration on Ghana’s economy ....................................................................... 51 6.2 Estimating the potential impacts of the AfCFTA and increased digitalisation for Ghana’s economy ......................................................... 52 7 Conclusions and Policy Recommendations ................................ 54 7.1 Conclusion .................................................................................. 54 7.2 Policy recommendations ............................................................. 54 References .................................................................................................. 56 ODI Report 6 Acronyms AfCFTA African Continental Free Trade Area CCPA California Consumer Privacy Act CERT Computer Emergency Response Team CSA Cyber Security Authority EEA European Economic Area ETA Electronic Transactions Act EU European Union FCDO UK Foreign, Commonwealth & Development Office GDP gross domestic product GDPR General Data Protection Regulation GhIPSS Ghana Interbank Payment Settlement Systems GPH Global Policy House GST goods and services tax ICT information and communication technology IFC International Finance Corporation ITC IT Consortium KYC Know Your Customer MSMEs micro, small and medium enterprises NDPC National Data Protection Commission NITA National IT Agency PCSRC Postal and Courier Services Regulatory Commission PSSA Payment Systems and Services Act SMEs small and medium enterprises UNCTAD United Nations Conference on Trade and Development US United States VAT value-added tax ODI Report 7 Executive summary The African Continental Free Trade Area (AfCFTA) Agreement promises to contribute to Africa’s economic development by facilitating greater intra-African trade and economic integration. The digital economy, a key driver of this development, will be imperative to realise this objective. To this end, the AfCFTA recently lengthened its protocols to include the Protocol on Digital Trade. This promising initiative seeks to increase Africa’s digital economy and its contribution to facilitating intra-regional trade and investment. As could be the case for most African countries, this Protocol holds significant potential for Ghana’s economy, offering new avenues for growth and prosperity. The performance of Ghana’s digital economy has been in an expansion phase, reflecting the country’s growing capacity and potential to leverage the opportunities from the AfCFTA. The digital economy is already paramount to Ghana’s economic development, as the information and communication technology (ICT) sector is a growing major contributor to gross domestic product (GDP). In 2022, the value of the ICT sector stood at $2.5 billion (in constant 2015 values), representing 4% of GDP. In addition, the sector has been a major contributor to the country’s international integration, with growth in digitally deliverable services reaching $6.3 billion (in value terms) in 2019. The country’s fintech capacity growth has also been a major contributor to the expansion of the digital economy. The fintech industry, largely dominated by mobile money transactions, is one of the fastest-growing markets in the world, and Ghana is now home to over 70 fintech companies (Bright, Oteng, and Gyan 2020). Ghana’s digital economy growth is assessed to have been supported by government policies like the Ghana Digital Agenda 2018 and the Ghana Beyond Aid Charter and Strategy 2019. These initiatives aim to enhance the sector’s contribution to national development and require legal and regulatory frameworks to ensure digital transactions are conducted safely, fairly, and securely. The country has legal and regulatory frameworks for e-commerce and digital transactions, including the Electronic Transactions Amendment Act 2012, the Electronic Communications Act 2008 (Data Protection Act 2012), and, more recently, the Cyber Security Act 2020. ODI Report 8 Nonetheless, it needs to do more to leverage opportunities from the AfCFTA to expand the digital economy's contribution to its economic development, as the sector still faces several challenges. 1 Regulatory complexity: Relevant legal and regulatory frameworks are beset with specific challenges that weaken their ability to create a conducive environment for digital transactions. For example, the Electronic Transactions Act's enforcement and implementation are weak. 2 Harmonisation of regulations: The absence of comprehensive data protection legislation aligned with African and international standards poses significant challenges to user privacy and regulatory compliance. 3 Digital divide and inclusion: Differences in broadband internet availability and accessibility, proficiency in digital skills and infrastructure exacerbate inequalities that can hinder participation in digital commerce. Specifically on internet access, huge gaps exist between the northern (maximum 50% access) and the middle and coastal areas (50–90% access). 4 Digital infrastructure: The digital infrastructure landscape, including data centres and cloud systems; physical hardware; including mobile devices; computing facilities; and other Internet of Things tools, requires more investment. This will be crucial to increasing integration in the digital ecosystem, enabling Ghanaian companies to scale and expand. 5 User challenges: An analysis of responses from private companies engaged in digital economic activities shows that there is limited awareness of the Protocol on Digital Trade as well as legal and regulatory frameworks governing digital activities and usage of digital platforms or opportunities. In response to the potential economic implications of the Protocol and the digital trade challenges identified in Ghana, certain measures can be adopted to increase the economic benefits of the Protocol. Within these, the Government of Ghana will need to formulate a Ghana Digital Trade Strategy and Action Plan to implement a digital trade roadmap and execute the Protocol. To ensure such a strategy helps the country realise increased economic gains from digital trade activities, the afore-mentioned challenges must be tackled and the digital trade ecosystem improved. • Draw lessons from global best practices to develop a comprehensive e-commerce and digital trade act and harmonise existing digital trade regulations and policies with African standards. • Consider implementing a robust data protection and privacy law to protect user data, enhance trust in digital payment systems and protect online users. ODI Report 15 Over this period, the value of digitally deliverable services, in US dollars, shows an overall upward trajectory despite fluctuations. This indicates a growing capacity and potential for digital service provision in Ghana's economy. The peak in 2019 at approximately $6,377 million reflects a high point in the sector's output, followed by a decline in 2020, likely linked to the COVID-19 pandemic's impact on economic activities, even those that are digitally based. The recovery in 2021 to $5,857 million suggests a rebound, though it has not reached the previous peak, indicating lingering effects of the pandemic or other market dynamics. The share of digitally deliverable services in total trade in services exhibits notable variability, which may indicate the evolving nature of Ghana's services sector and its trade patterns. The surge to 75.21% in 2020 may reflect increased reliance on digital services during the pandemic, when traditional service delivery faced restrictions. The subsequent fall to 63.85% in 2021 could signal a readjustment as other service sectors recovered and the market corrected itself postpandemic. These insights align with the objectives of the AfCFTA Protocol on Digital Trade, which aims to promote digital trade as a means for economic growth and development across Africa. Ghana’s increasing trade in digitally deliverable services suggests the country is wellpositioned to benefit from the digital trade opportunities presented by the AfCFTA. It is crucial to acknowledge that while the digitally deliverable services category encompasses those that can be delivered remotely over digital networks, not all such services are delivered digitally in international trade. The graph does not distinguish between potential and actual digital delivery; the figures represent a broader capability for digital trade rather than its actualisation. The data indicates that Ghana's services sector has the infrastructure and potential to deliver services digitally, which is a strong foundation for further digitalisation of the economy. The growth in the value of digitally deliverable services suggests a country increasingly capable of and likely engaging in digital trade. However, the extent of digitally delivered services may be a subset of the total reported. This underscores the importance of differentiating between digital potential and actual digital trade flows in policy-making and analysis. 2.2.2 ICT workers and productivity Figure 3 compares the productivity levels of ICT sector workers with the average worker productivity level across all sectors. The productivity ratio comparing ICT worker productivity with total worker productivity in Ghana saw a remarkable increase from 2015 to 2021. In 2015, the ratio stood at approximately 5.01, signifying that, on average, ICT workers were five times more productive than their ODI Report 16 counterparts in other sectors. This ratio saw consistent growth in subsequent years, reaching about 6.21 in 2016 and 6.48 in 2017, indicating an expanding productivity gap favouring ICT workers. In 2021, there was a significant leap in the productivity ratio to around 13.25, meaning the productivity of ICT workers was more than 13 times that of the average worker across all sectors. Figure 3 ICT worker vs total worker productivity (constant 2015 $) Source: own deliberations using data from Ghana Statistical Service (applies to the following figures unless otherwise indicated). This pronounced growth in productivity within the ICT sector suggests various contributing factors, including rapid technological advancements, high-value activities prevalent in the ICT industry, enhanced skill development and educational opportunities in ICT, and substantial capital investments in digital infrastructure. The notable surge in productivity in 2021 may reflect a considerable digital transformation across Ghana's economy or a surge in the ICT sector, possibly driven by innovation and an upswing demand for digital services. 2.3 Digital trade and the fintech landscape in Ghana Ghana’s digital trade and fintech landscape broadly covers the banking and financial services sector and insurance, telecommunications, and non-bank financial services. The levying of a ‘fintech tax’ of 1.5% on digital financial services, known as an elevy, means Ghana has one of the steepest tax rates in the region. It is reported that Ghana’s fintech landscape is home to over 70 fintech (Bright, Oteng, and Gyan 2020). This number is growing rapidly as infrastructure improvements are constantly being made. Since 2021, Ghana has welcomed financial technologies (fintech) at an impressive rate. Spurring this growth were regulatory changes, such as the Central Bank allowing non-bank institutions (e.g., telcos) to own and manage mobile network operations. 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2015 constant $ ICT Worker Productivity Total Worker Productivity ODI Report 17 Figure 4 Fintech use in Ghana Source: UNCTAD (2023) Table 1 presents the top 10 active players in the fintech ecosystem in Ghana. This sits in line with the ambitions of the Protocol on Digital Trade to align regulations to support more African fintechs and innovative firms to bring new business models. Table 1 Top 10 active fintech companies in Ghana Fintech Description of services MTN Mobile Money – Momo MTN Mobile Money (popularly called MTN Momo) is an offshoot of MTN, one of Ghana’s largest telecoms networks. It provides consumers and businesses with access to payments, e-commerce, insurance, lending and remittance services. MTN Momo is the most widely used mobile payment app in Ghana, controlling about 89.3% of mobile financial services revenue in Ghana. Zeepay – a trend-setter Zeepay specialises in mobile money interoperability and international remittance. It was the first fintech company in Ghana to be issued a Dedicated Electronic Money Issuer Licence by Bank of Ghana. Zeepay has been instrumental in facilitating cross-network money transfers and fostering financial connectivity in Ghana and across parts of Africa. It is the second-largest fintech app in terms of mobile financial services revenue. Hubtel – a fintech with ecommerce services Hubtel is one of Ghana’s most versatile fintech companies. It provides mobile payment, bulk SMS and e-commerce solutions. Its point-of-sale platform allows businesses to accept mobile money, cards and QR codes. Hubtel empowers numerous small and medium enterprises (SMEs) in Ghana by digitising their payment processes. ODI Report 18 Fintech Description of services Expresspay – one of Ghana’s premier fintechs Expresspay provides electronic payment solutions. Its platform allows utility payments, internet subscriptions and airtime top-ups. Expresspay combines a userfriendly interface and an extensive agent network, making it a popular option for Ghanaians and expats seeking efficient payment solutions. Kowri – the ‘allin-one’ app Kowri, one of Ghana’s fastest-rising all-inclusive digital financial apps, is a service from Sevn Ghana Limited (formerly DreamOval Limited). It is a multi-bouquet of financial solutions that include sending and receiving payments; buying airtime; paying utility bills; and managing, insuring and promoting businesses. Finance Plus – focused on financial institutions and loans management Finance Plus, by Cube Robotics, is a custom softwarebuilding company with experts who assist credit unions, rural banks and microfinance institutions in growing with specialised software provide financial services to customers. GhanaPay – the giant in the room GhanaPay is a payment app rolled out by Ghana Interbank Payment Settlement Systems (GhIPSS), a wholly owned subsidiary of Bank of Ghana mandated to implement and manage interoperable payment system infrastructures for banks and nonbank financial institutions. Chango – towards crowdfunding Chango is a crowdfunding platform rolled out by IT Consortium (ITC), one of Ghana’s largest business-tobusiness fintech companies. It is a mobile app made up of both private and public groups that brings people together based on agreed terms and conditions to raise funds. The app is used to donate to a cause or project by creating groups and raising funds. ITC is establishing itself as one of Africa’s leading financial services technology solutions providers. Slydepay – one of the many firsts from banks Slydepay was created by Dreamoval Limited and is powered by Stanbic Bank Ghana. Slydepay (formerly iWallet) is an all-in-one mobile app for mobile payments, airtime and internet data purchase. It is essentially a mobile wallet that allows customers to pay bills, top up mobile phones, make money transfers and pay in-store via QR codes as well as online via emails. It has an option that allows customers to make payments at retails shops via the app. Payswitch – enabling financial inclusion for SMEs Payswitch is one of the few fintech companies that allows businesses to accept payments via multiple channels, such as mobile money, cards (Visa and Mastercard) and other online platforms. It combines card management and issuing, digital banking, automated fare collection, e-commerce, agency banking and other tailor-made solutions. Source: Global Policy House research and analysis The Bank of Ghana is the main regulator of the fintech industry in Ghana. It is mandated that banks and non-financial institutions engaged in fintech in Ghana be licensed. It has set up the Fintech and Innovation Office to oversee the fintech market space in the country. There are six categories of licences for fintech: • Dedicated Electronic Money Issuer Licence • Payment Service Provider Scheme Licence • Payment Service Provider – Enhanced Licence ODI Report 19 • Payment Service Provider – Medium Licence • Payment Service Provider – Medium • Payment Service Provider – Standard • Payment and Financial Technology Service Provider Licence. Ghana’s clear licencing structure enables businesses to have clarity on compliance requirements if they operate in one of the above areas. These licencing regimes will also need regular review to evaluate their suitability in an ever-changing digital trade environment. GhanaPay by the Ghana Interbank Payment and Settlement Systems Ghana Interbank Payment and Settlement Systems (GhIPSS) is a subsidiary of the Bank of Ghana with the sole purpose of ensuring payment system interoperability to foster the goal of financial inclusion in the country. This program has spearheaded two payment system infrastructures: the Mobile Money Interoperability platform and the GhIPSS Instant Pay platform, which facilitate the transfer of funds across telecommunication networks and from mobile banking platforms to mobile money networks. In June 2022, GhIPSS launched the bank-wide GhanaPay mobile wallet to encourage the rise of the country’s cashless and financially inclusive ecosystem. This clearly symbolises the country's shift towards digital applications. Regulatory sandbox payment framework To promote innovation and mitigate risk in the dynamic digital financial service ecosystem, the Bank of Ghana has established a regulatory sandbox as an important tool in developing a regulatory framework supportive of responsible innovations and nurturing new business models. This framework aims to enable small-scale live testing of innovative financial products, services and business models by eligible financial service providers and start-ups (operating under a special exemption, allowance or other limited, time-bound exception) in a controlled environment under the supervision of the Bank of Ghana. By this arrangement, innovators can temporarily test new ideas without being subjected to the full set of regulatory requirements applicable outside the sandbox while addressing users’ and regulators’ respective concerns. The regulatory sandbox has been open to a limited scope of innovations and emerging technologies, such as new digital businesses not covered under any regulation, new and immature digital financial services technology, and innovative digital financial products and services that can potentially solve recurring financial challenges within the country. ODI Report 20 The sandbox also seeks to prioritise new innovations that leverage crowdfunding products, remittances, blockchain technology, electronic Know Your Customer (eKYC) platforms, regulatory technology, supervisory technology and digital banking and financial services targeted at financial inclusion for women. Ghana’s regulatory sandbox is a good example for other African countries. Innolab Insurtech Accelerator Programme The National Insurance Commission has implemented the Innolab Insurtech Accelerator Programme to help grow the country’s insurance technology start-ups while promoting innovations in the insurance industry. This initiative is hoped to inspire fintech start-ups to diversify their product offerings and explore other areas of necessity in the financial service delivery industry. Ghana Digital and Services Payments Platform This initiative is part of the ambition to digitise the economy and promote a cashless economy in line with the Digital Ghana Agenda. The Ministry of Communication and Digitalisation set it up in a bid to promote a centralised public sector payment platform. The digital payment platform will also ensure greater transparency in collecting taxes and revenues. The platform will serve as a payment system hub for Ghana’s public sector, including Ghana Immigration Service, the Social Security and National Insurance Trust, Ghana Revenue Authority and the Passport Office. ODI Report 21 3 Review of existing policies, laws and regulations governing digital trade 3.1 Laws and regulations The regulatory framework for e-commerce and digital transactions is in place in Ghana, with laws to ensure digital transactions are conducted safely, fairly and securely. These laws include the Electronic Transactions Act (ETA) 2008, amended by the ETA Amendment Act 2012; the Electronic Communications Act 2008; Data Protection Act 2012; and, more recently, the Cyber Security Act 2020. This legal framework helps protect consumers by establishing rules for data privacy, consumer rights and dispute resolution; the laws promote fair competition, prevent fraud and address issues related to intellectual property and cybersecurity. 3.1.1 Electronic Transactions Act 2008 The ETA 2008 provides for the regulation of electronic communications and related transactions. It is the primary law regulating e-commerce activities, including online marketplaces. It provides for the legal recognition of electronic transactions and electronic signatures and sets out the legal framework for ecommerce in Ghana. Under it, electronic transactions have the same legal standing as traditional paper-based transactions. The Act also establishes rules for electronic communication, data protection and the use of electronic documents in legal proceedings. The Act defines electronic transactions as transactions through an electronic agent such as a computer program or other automated means (Section 144). Since e-commerce qualifies as an electronic transaction, the Act will apply to businesses that market or sell goods and services online. The law further applies to the supply of goods if the consumers are in Ghana (Section 53). Business owners conducting business online must provide certain information to their customers. This information includes the full name and legal status of the business, the physical address, the phone and email contact, membership of any regulatory body, a ODI Report 22 sufficient description of the main characteristics of products and services, the total price of products and services, and the manner of payment. The website must also provide the terms of agreement for a transaction, the privacy policy and how consumers can access a complete transaction record. Business owners must allow customers to review and correct errors and withdraw from a transaction before concluding the purchase. They should also use a payment system that is sufficiently secure in relation to accepted technological standards available at the time of the transaction (Sections 46–50). Under this law, all operators of electronic services must apply for a licence to operate online (Section 38). Since Ghana is not a party to international conventions such as the United Nations Convention on the Use of Electronic Communications in International Contracts, national contract rules for cross-border transactions deviate from internationally standardised rules. 3.1.2 Electronic Communications Act 2008 This Act provides for the regulation of electronic communications, broadcasting, and the use of the electro-magnetic spectrum and for related matters. It allows the National Communications Authority to regulate broadcasting organisations and their services. 3.1.3 Cyber Security Act 2020 While digital trade has many advantages, it also presents new opportunities for fraudsters and scammers to exploit unsuspecting consumers. The Cyber Security Act 2020 created the Cyber Security Authority (CSA) to regulate cybersecurity activities in Ghana, promote the development of cybersecurity in the country, and seek the general protection of citizens in cyberspace. Section 41 establishes national and sectoral Computer Emergency Response Teams (CERTs). Institutions are required to report cybersecurity incidents to the relevant sectoral or national CERT within 24 hours of detecting the incident. Where cybersecurity services are provided as part of digital trade operations, Section 49 of the Act requires compliance with the licensing requirements set out in the Act. The Act also provides that the CSA shall establish mechanisms for the accreditation of cybersecurity professionals and the certification of cybersecurity products and technology solutions. The necessary accreditations and certifications would apply to the employment of cybersecurity professionals (Section 57) or the use of cybersecurity products (Section 58) in digital trade operations. Digital trade operations that involve interactions with children or the handling of their data invoke provisions on the protection of children online, such as Section 62, prohibiting publishing images of minors, and Section 82, under which the CSA can order a digital platform to take down all images of that nature. ODI Report 23 3.1.4 Data Protection Act 2012 The Data Protection Act 2012 also applies to digital trade, including online marketplaces and e-commerce businesses in Ghana. It is designed to protect individuals' privacy and personal data. It sets out rules and regulations for individuals, organisations, and public bodies to collect, process, store, and disclose personal information. It seeks to ensure data subjects have control over their personal information. The Act establishes the National Data Protection Commission (NDPC) as the regulatory body responsible for enforcing the act's provisions. Under this Act, non-compliance can result in penalties such as fines, imprisonment or both. The Act empowers the NDPC to investigate and enforce compliance. Institutions or businesses that process consumers’ data (data controllers) must ensure data is processed lawfully and reasonably without infringing the privacy rights of the data subject, among other things (Section 18(1)). The individual’s right to privacy has been enshrined under Article 18(2) of the 1992 Constitution as a fundamental human right. Further, a data controller cannot process a consumer’s data without the prior consent of the individual who is the subject of the personal data. Nevertheless, the law allows exceptions where the purpose for processing the data is authorised by law, to protect the customer’s legitimate interest, necessary for a contract the customer is a party to or to pursue the legitimate interest of a data controller (Section 20(1)). Unless the law permits, a consumer in an e-commerce transaction can object to the processing of his or her data (Section 20(2)). A data controller who processes the data of a foreign consumer from a foreign country must ensure the data processing complies with the data protection rules in that country (Section 41). The law further requires data controllers to register with the NDPC. After registration, the NDPC grants a certificate of registration, which is renewed every two years. A data controller can apply for the licence through the data protection website. Depending on whether the applicant is a small, medium, or large data processor, the data controller must pay the prescribed fees upon registration. According to Ghana's data protection legislation, a data controller can process data in Ghana but must first register with the NDPC and be granted permission to carry out local processing. 3.1.5 Payment Systems and Services Act 2019 An important aspect of e-commerce transactions is electronic payment. E-commerce can only thrive with a proper payment system regime. In 2019 Ghana’s parliament introduced the Payment Systems and Services Act (PSSA) 2019. This aims to consolidate and amend all laws relating to payment systems and services and to ODI Report 24 regulate institutions that engage in payment systems and electronic money business. The Bank of Ghana has supervisory and regulatory authority in all matters relating to payment, clearing and settlement systems (Section 3(1)). A payment service provider with a licence or authorisation has the power to provide, among others, the following services: 1 clearing of payment instructions among financial and non-financial institutions 2 settling of obligations arising from the clearing of payment instructions 3 transfer of funds from one account to another using electronic means 4 facilitation of inter-operability of payment systems and services among payment system providers 5 provision of electronic payment systems for the unbanked and under-banked population (e.g., mobile money) 6 issuing of electronic payment instruments 7 issuing prepaid cards, credit cards, debit cards and similar media. The law has provided safeguards for security in payment systems. A service provider shall have an appropriate and tested technology system equipped with fraud and monitoring and detection tools, a valid third-party certification from a reputable certification authority, a system capable of interoperating with other payment systems in the country, and a cybersecurity policy when applicable (Section 20). These tools are necessary to assure account holders that the personal information required for payments is protected and that they are not susceptible to fraud and cyberattacks. A payment service provider must ensure that only the account holder authorises a transaction against a customer's account. A customer subscribing to a payment service like mobile money, a debit card or a fintech app must submit a form of identification as a customer due diligence requirement. The forms of identification permitted are a national identification card, a voter identification card, a driver’s licence, a passport, a national health insurance card, biometrics and any other identification prescribed by the Bank of Ghana (Section 35(1)). Any time there is a transaction, the service provider must notify the customer of this through electronic means or a physical receipt. The notice must at least state the transaction amount, the transaction type, the date and time of the transaction, a unique transaction reference, the identifying details of the recipient or sender and any fees charged (Section 20). A service provider must implement a system with built-in control mechanisms for a complete audit trail (Section 34). They shall not engage in any activity likely to result in ODI Report 31 4 Ghana’s technological infrastructure and ecommerce capabilities E-commerce is playing a major role as a catalyst for growth in Ghana and other African economies. COVID-19 saw many countries, including Ghana, shift to adopt more e-commerce activities. Young enterprises set up digital platforms and marketplaces and were exposed to more regional markets to sell their goods and services and build more partnerships and strategic alliances while boosting their revenue base. The e-commerce readiness status of Ghana has been well documented in its United Nations Conference on Trade and Development (UNCTAD) e-readiness report. Figure 5 highlights a mature level of political support and understanding of e-commerce, with the legal framework and the digital payments architecture also ranked highly in the country. Figure 5 Needs and opportunities for e-commerce development in Ghana Source: UNCTAD (2023) ODI Report 32 Figure 6 Trading across borders by country Source: World Bank (2020) Figure 6 highlights in global rankings that many African countries are still behind in cross-border trade, with Ghana holding 158th place. The Protocol on Digital Trade could help change this by supporting African countries with clearer rules on key areas that enable crossborder trade, including free-flowing cross-border data transfers, interoperable cross-border digital payment systems, and identity systems. Although the Government of Ghana is working hard to champion ecommerce and digital transformation to include technological advancement, the following problems remain: • lack of a comprehensive domestic fibre backbone infrastructure • public operators not able to reach rural and poorer customers • broadband is slow, although the mobile market is growing. Relevant technological infrastructure has become indispensable for any African country to aid development and alignment with international trends. In addition, leaders' political will and support to champion digital transformation and trade are critical to achieving a dynamic digital ecosystem that leverages safe, secure and robust technological infrastructure. In Ghana, support over the past few years has come directly from the country’s president, a major champion of digitisation and digital transformation initiatives for Ghana. Ghana's exemplary Digital Property Address System (GhanaPostGPS) uses digital infrastructure to give every property a unique identifier. This will aid with more efficient last-mile delivery, minimise crime, and enable a source for robust data that can be used for future predictive analysis and emergency response. This important infrastructure can support the rollout of a digital trade programme that also reaches rural communities that previously had no form of address system. 4.1 Components and enablers of a digital trade ecosystem ODI Report 33 4.1.1 Digital infrastructure In order to fully leverage Ghana's dynamic, growing digital trade ecosystem, it is important to direct more investment towards digital infrastructure, such as data centres and cloud systems, physical hardware, including mobile devices, computing facilities, and other Internet of Things tools. This will help Ghanaian companies scale and expand. 4.1.2 Connectivity Connectivity to high-speed internet is another key element. There are still gaps in urban and rural connectivity, leading to a digital divide within the country’s population. As Figure 7 shows, Ghana’s online presence increased from 8% in 2010 to 69% in 2021. However, in urban areas, internet rates increased from about 13% to 80%, compared with a move from 2% to 54% in rural areas. Figure 7 Internet use in Ghana Source: UNCTAD (2023) Below, we share internet use by age, showing clear adoption and use mainly by people aged 15–40 and less so by older generations. Figure 8 Ghana, internet use by age group Source: UNCTAD (2023) ODI Report 34 Usage varies by device: we see more use through smartphones, with a rate of over 60% of the population. Internet usage ranges from 24% in Mion, Northeast Gonja and Karata to 92% in Tema West, Ayawaso West and La Dade-Kotoport. However, rates are below 50% per cent in the northern part of the country. Ghana's middle and coastal regions boast 50% and 92% usage rates. Figure 9 Ghana, internet use by device Source: UNCTAD (2023) As the data shows, young people often rely heavily on smartphones. Furthermore, data affordability levels can be explored, and the market pricing of data can be evened out by encouraging more competition in the marketplace. To deliver digital trade and enable Ghana to move towards economic transformation driven by a vibrant digital economy, the following mix of innovative principles and models outlined in the GPH Digital Trade Framework will lead to sustainable growth for the country. The diversification of product and service offerings, as well as the creation of a digital trading environment with security, usability and accessibility, is key to getting results. ODI Report 35 Figure 10 GPH digital trade framework 4.2 Digital payments Ghana is a good example of the expansion of e-payments, with a range of new active players entering the market, including Zeepay and MTN, among others. The PSSA 2019 came with clearer rules for payment operators to abide by, which is a positive step forward for Ghana. It is imperative that systems are interoperable and enable efficient settlements as transactions are conducted. Ghana has established mechanisms to ensure the country has a dynamic digital payments ecosystem, evident from its establishment of various schemes, including the Bank of Ghana regulatory oversight for fintechs, the Payments System Council, and a growing FINTECH community working with other financial institutions. As an AfCFTA member state, Ghana can be an enabler of digital trade and help support other countries in establishing regulatory mechanisms and best practices, working with other countries to establish standards and innovative approaches to digital payments. Although digital payments are helping bring more people into the financial ecosystem, many community members are still caught up in the digital divide. Poor access to the internet or even electricity prevents them from connecting and engaging in digital trade. 4.3 Digital identity Digital identity in Ghana is a fundamental element in conducting digital trade. With the increasing adoption of mobile money services such as MTN Mobile Money and Telecel Cash, having a secure and reliable digital identity is essential for conducting transactions online safely and efficiently. Digital identities in Ghana typically consist of some personal information in the form of biometric data, national identification numbers and phone numbers linked to individuals' ODI Report 36 accounts. This enables users to authenticate themselves when making digital payments and helps verify their identities to prevent fraud and ensure accountability. The National Identification Authority issues biometric identification cards known as Ghana Cards. These serve as a unique identifier for individuals in all interactions with government agencies and private sector entities. This initiative aims to streamline digital payment processes, enhance security, reduce fraud and promote financial inclusion by providing individuals with a secure and reliable form of identification. By establishing a sovereign identity system for digital payments, Ghana is paving the way for more efficient and transparent financial transactions that benefit consumers and businesses while ensuring data protection and privacy rights are upheld. This is a hugely important requirement as we see the introduction of the Protocol, which should pave the way for African member states to work together to establish interoperable digital identity systems governed by legal frameworks that protect data and common standards set to implement digital identity policies. Further, authentication and verification in digital payments in Ghana are crucial processes that ensure the security and reliability of transactions. Authentication involves confirming the identity of users through various methods such as passwords, biometrics or tokens to prevent unauthorised access to sensitive information. Verification, however, involves validating the accuracy and integrity of transaction details before processing payments. In Ghana, financial institutions and payment service providers implement stringent authentication and verification protocols to protect consumers from fraud and cyber threats. This includes two-factor authentication, encryption technologies and real-time monitoring systems to detect suspicious activities. By prioritising authentication and verification in digital payments, Ghana aims to foster trust in online transactions and promote financial inclusion by providing a secure environment for individuals to easily conduct their electronic transactions. The Protocol should reinforce the significance of laws supporting electronic authentication mechanisms that countries have in place. Case study: Launch of the national personal identification system – the Ghana Card The Ghana Card is mandatory, and over 18 million people have registered for it. The initiative has benefitted the government and other sectors in numerous ways. This innovative identification system has streamlined processes for citizens, providing them with a secure way to verify their identity and access various services. By centralising personal data onto one card, the government can more efficiently manage records and reduce instances of fraud or duplication. Furthermore, the Ghana Card has proven invaluable in improving security measures in healthcare, finance and transportation sectors. The card's incorporation of biometric ODI Report 37 technology ensures accuracy and validity when verifying individuals, helping combat identity theft and unauthorised access. Overall, the launch of the Ghana Card has revolutionised how information is shared and utilised across multiple sectors, fostering a more organised, efficient and secure environment for citizens and the government. As Ghana continues to embrace the digital revolution in its financial sector, having a robust digital identity system will be key in fostering trust and promoting financial inclusion among its population. 4.4 Digital technologies Digital trade is being transformed by a wave of emerging and advanced technologies under application in critical areas of the digital trade ecosystem. The emergence of innovative solutions utilising data-driven technologies such as artificial intelligence, blockchain, the Internet of Things, big data, robotics, drones and emerging Quantum applications is predicted to play a big role in digital transformation for many African countries, including Ghana. In context, Ghana is bringing in applications using artificial intelligence and blockchain to help support supply chain efficiency and transparency, which is leading to more productive activity across digital trade supply chains. Drones and 3D printing were prevalent during COVID-19, and these applications are being utilised today to support last-mile delivery and hard-to-reach communities in poorer communities. Blockchain, in particular, can build trust in digitally enabled transactions, helping automate processes utilising smart contract applications for efficiency and better-value transactions. To fully leverage and benefit from these technologies, Ghana must boost capacity and knowledge among the population, with a strong focus on youth and women. By providing education and a testing environment through sandboxes and national accelerators, a pipeline of skilled experts can be developed to build solutions that can be used to produce more business models around digital trade. As an example, young people in Ghana can produce digital content and engage with this by utilising, for example, virtual reality and augmented reality applications powered by artificial intelligence. Although these technologies have the potential for transformative change, there are risks associated with their use, including biases and harmful content. With the Protocol incoming, it is imperative that AfCFTA member states are in position to provide the right regulations and safeguards to users of these technologies, setting clear rules and standards that are interoperable to minimise and mitigate potential risks. ODI Report 38 4.5 Digital platforms The world has shifted to a platform economy and a data economy, with businesses, especially SMEs, connecting to this to transact and do business. As digital trade grows in Africa, digital marketplaces and activity will expand, with Web 3 providing a foundation for more immersive marketplaces. The emergence and growth of digital marketplaces in Ghana signify a pivotal shift in the country's economic landscape. These platforms serve as catalysts for innovation, connectivity and economic empowerment. By providing a virtual space for buyers and sellers to connect, digital marketplaces break down traditional barriers to trade, enabling businesses of all sizes to reach wider audiences and tap into new markets both domestically and internationally. Moreover, these platforms facilitate financial inclusion by offering convenient payment solutions and access to credit, thus empowering entrepreneurs and SMEs to participate more actively in the digital economy. As Ghana continues to embrace digitalisation, the importance of digital marketplaces will only increase, driving economic growth, fostering entrepreneurship and creating opportunities for sustainable development. 4.6 Digital skills An analysis of Ghana’s recent national census data by authors from the World Bank shows that internet use is much higher for persons aged 15–29 (80%) and 30–40 (78%) (Dabalen and Mensah, 2023). However, the same study's findings reveal significant gaps in internet use: usage is higher among wealthy households and persons with formal (secondary or tertiary) education. The government recognises the need to leverage the digital economy to support youth’s increased involvement in economic development. To this end, it is working to build a workforce with increased digital skills to accomplish its goals in digital transformation. However, implementation of digital skills training continues to fall short. To fully leverage the digital economy, more development of digital skills is required. ODI Report 39 5 Perceptions and understandings of the AfCFTA among stakeholders in Ghana Research on perceptions and understandings of the AfCFTA among stakeholders in Ghana is crucial to assess its effectiveness and identify areas for improvement. We present here a synthesised overview of stakeholder perspectives based on interviews with stakeholders directly,. In total, the respondents included over 50 attendees to the workshop, 120 business and private officials (some unable to respond due to internet outages in Ghana), and government ministries, where consultations were made. This research, combined with our analysis of the critical elements in a dynamic Ghana digital trade ecosystem, point to areas where Ghana can focus to enhance digital trade and leverage the opportunities coming with the Protocol and the AfCFTA. Below we provide our analysis of perceptions and feedback received in the past two weeks. 5.1 Expanding market horizons While most businesses (80%) currently trade with other African countries (see Figure 11), there is a notable discrepancy in ecommerce adoption across different markets. This suggests a potential untapped opportunity for businesses to leverage digital platforms for intra-African and global trade expansion. There is no single digital trade platform that is helping with intraAfrican trade expansion currently. This is because every digital trade platform is designed for domestic needs and not for intra-African trade purposes. Just as Europe and other countries have platforms for all-inclusive trading, such as earnings, bangles and other accessories for sale, platforms like these will help MSMEs trade these goods online. ODI Report 40 Figure 11 Trade with other African countries Source: Authors using information from interviews with private enterprises in Ghana (applies to the following figures unless otherwise indicated) 5.2 E-commerce as a growth driver The significant proportion of businesses (75%) conducting a moderate to high percentage of their domestic trade through ecommerce countries (see Figure 12) underscores the growing importance of online channels in Ghana's business landscape. This trend signals a shift towards digital first strategies and highlights the potential for further growth in online commerce domestically. The focus should not only be on big industries or big companies that trade in a truckload of goods and services but also on supporting MSMEs, which have highlighted the challenges around logistics and financing, with a need for logistics and last-mile delivery improvements. Figure 12 Proportion of trade conducted through e-commerce 5.3 Digital infrastructure readiness Only 40% of businesses have their own e-commerce website or utilise third-party platforms (see Figure 13); this reflects a need for enhanced digital infrastructure to support online commerce. This underscores the importance of investing in digital platforms and technologies to facilitate seamless online transactions and improve business market access. ODI Report 47 5.15 Collaboration for implementation All respondents recognise the need to collaborate with other public or private sector players to implement digital economy policies, emphasising the importance of multi-stakeholder partnerships and coordination efforts (see Figure 27). Figure 26 Collaboration to implement the Protocol 5.16 Support and capacity-building initiatives Despite limited resources, a significant proportion (61.5%) of respondents have not hosted sensitisation workshops with businesses, especially SMEs. This highlights an opportunity for increased outreach and capacity-building efforts to raise awareness and build capabilities among businesses regarding digital trade opportunities and challenges (see Figure 28). Figure 27 Sensitisation and capacity-building We summarise in Table 6 other feedback from both the private and public sectors. Table 5 Private and public sector perspectives on the AfCFTA and the Protocol on Digital Trade Government/regulatory bodies: The Ministry of Communications and Digitalisation and the Postal and Courier Services Regulatory Commission (PCSRC) have shown commitment to the AfCFTA's objectives by launching the AfCFTA Hub. They perceive the AfCFTA as an opportunity to boost digital trade, promote e-commerce and support the growth of technology and fintech start-ups and SMEs in Ghana. Business community/private sector and industry groups: Ghanaian businesses, especially SMEs and start-ups, view the AfCFTA as a gateway to new markets and opportunities across Africa. The digitised assembly point provided by the AfCFTA Hub could be seen as a valuable platform for expanding their reach, accessing market insights and fostering competitiveness. ODI Report 48 The view of the AfCFTA Hub is as a strategic tool for enhancing transparency, facilitating trade financing and combating fraudulent activities in cross-border transactions. The requirement for businesses to obtain AfCFTA numbers and common transaction IDs reflects a focus on ensuring compliance and building trust among participants. While the prospect of freely exporting goods and services across Africa is appealing, businesses may also have concerns about regulatory compliance and the practicalities of navigating multiple registration requirements with different agencies such as the National IT Agency, the Cybersecurity Authority and the PCSRC. These organisations likely recognise the AfCFTA as a significant milestone for regional economic integration and trade facilitation. They may support initiatives like the AfCFTA Hub as a means to empower businesses, enhance efficiency in cross-border trade and capitalise on the continent's economic potential. However, they may advocate for streamlined registration processes and greater coordination among regulatory bodies to minimise administrative burdens on businesses and facilitate smoother participation in the AfCFTA. Academia and civil society: Academics and civil society organisations may perceive the AfCFTA as a catalyst for socioeconomic development and poverty reduction in Ghana and across Africa. They may emphasise the importance of inclusive policies and capacity-building initiatives to ensure marginalised groups benefit from the trade agreement. They may also engage in research and advocacy efforts to assess the impact of the AfCFTA on various sectors of the economy, identify potential challenges and recommend policy interventions to maximise its benefits while addressing any adverse effects. Consumers and the general public: Consumers may have limited awareness of the AfCFTA's specifics but may indirectly benefit from increased market competition, expanded product choices and potentially lower prices resulting from trade liberalisation efforts. The general public may have mixed perceptions depending on their understanding of the Agreement's implications for job creation, economic growth and national sovereignty. Efforts to communicate the objectives and potential benefits of the AfCFTA to the public may help build broader support and buy-in for the initiative. We recommend as part of a fuller review a comprehensive survey to seek more feedback from the various stakeholders on the hurdles they perceive in relation to the implementation and rollout of the Protocol and the AfCFTA. Appropriate rules and laws through the AfCFTA Protocol can be set with Africa state parties working in collaboration to establish common guidelines and standards that help boost digital trade and AfCFTA implementation. Source: GPH consultations, analysis and interviews in Ghana ODI Report 49 6 Estimating the potential impacts of the Protocol on Digital Trade on Ghana’s economy As part of the ongoing work to assess the impact of the Digital Trade protocol, SITA has developed a comprehensive methodology to estimate the impacts of participating in the protocol signatory economies (Lemma, 2024). This methodology comprises two main approaches: direct impact estimation and indirect impact estimation. 1. Direct Impact Estimation Assessment of Regional Trade Agreement (RTA) Benefits: By participating in an RTA with e-commerce provisions, countries can significantly boost GDP, exports, and employment. Studies show that high-income countries see a 10.3% increase in exports with such agreements, while emerging economies experience a 16.9% increase (OECD, 2023). This leads to potential increases in GDP per capita by approximately 11.7% to 12.48% due to higher export volumes. • Employment Impact Analysis: By calculating the GDP growth and applying the employment-to-GDP ratio, we estimate the potential increase in employment. For instance, with a baseline GDP and workforce, a GDP increase of 13.6% can translate to around 6.8 million new jobs, demonstrating the direct correlation between economic growth and employment. 2. Indirect Impact Estimation: • Digital Penetration Effects: Enhanced digitalisation, measured by increased internet accessibility, further boosts economic outcomes. A 10% increase in digital penetration can raise GDP by 0.02% to 0.3%, with ODI Report 50 significant potential for employment growth and export enhancement. • Combined Impact Analysis: Integrating the direct impacts of the Protocol with the indirect effects of increased digital penetration results in a combined GDP growth estimate ranging from 11.72% to 12.78%. This synergy between trade liberalisation and digital advancements underscores the comprehensive benefits of these combined efforts. 3. Total Impact Synthesis: • The combined effects on trade, GDP, and employment illustrate the transformative potential of these methodologies. For example, exports could rise by 15.2% to 21.2%, leading to substantial economic and social advancements. While the developed methodology provides a robust framework for estimating the impacts of participation in the Protocol on Digital Trade and enhanced digitalisation, it has several limitations. Firstly, the methodology relies heavily on previous estimates of similar trade protocols' impacts on other regions, which may not fully capture Ghana's unique economic context. Additionally, the absence of specific sectoral data limits the precision of our projections, potentially overlooking sector-specific dynamics and variations in impact. The optimistic assumptions regarding export and GDP growth may not account for potential barriers to implementation, such as infrastructural challenges, regulatory hurdles, and varying levels of digital adoption across different regions. Moreover, the model assumes a direct proportionality between GDP growth and employment, without considering factors like productivity advancements, technological innovations, and sector-specific economic shifts that could significantly influence employment dynamics. These limitations highlight the need for cautious interpretation of the results and the importance of complementing this methodology with detailed, context-specific analyses. Research indicates that African countries could experience a substantial increase in their exports, between 15% and 16.9%, by adopting an AfCFTA protocol that includes significant e-commerce and digital trade considerations (OECD, 2023., Abendin & Duan, 2021., Bunje et al. 2022., Were, 2015). Consequently, for each 1% increase in exports, GDP per capita levels are likely to rise by approximately 0.78%, translating to an increase in GDP per capita levels of between approximately 11.7% and 12.48%. These projections highlight two key metrics: the potential increase in GDP (and GDP per capita) and the increase in the value of total exports for AfCFTA Protocol signatory countries. ODI Report 51 Analysing the ramifications of GDP growth on employment levels requires a structured methodology. The analysis begins by calculating the GDP growth based on the projected increase, followed by determining the employment-to-GDP ratio, which measures the efficiency of employment across the economy in relation to GDP. This ratio aids in projecting the increase in employment resulting from GDP growth. The formula for this calculation factors in existing GDP, the percentage increase and the workforce, providing a basis to estimate potential employment opportunities. While this methodological approach presumes a direct proportionality between GDP growth and employment expansion, it is important to note the limitations of this model. Factors such as productivity advancements, technological innovations and sector-specific economic shifts, which can significantly influence employment dynamics, are not accounted for. Despite these limitations, this framework offers valuable insights for policy-makers. It serves as a preliminary guide in formulating economic and labour policies aimed at maximising employment opportunities in the wake of GDP increases, enabling the crafting of informed strategies that leverage economic growth to enhance growth, exports and employment prospects. Using the most recent data for Ghana – that is, export value ($22,094,606,175), GDP ($68,003,831,000) and total workers (11,637,427), it is possible to estimate the potential impacts of Ghana engaging with the AFCFTA Protocol: 1 GDP increase: GDP could potentially increase to between approximately $71.32 billion (low estimate) and $71.74 billion (high estimate), considering the expected export growth owing to the AFCFTA Protocol. 2 Export increase: The value of exports could potentially increase to between approximately $25.41 billion (low estimate) and $25.83 billion (high estimate), in line with the projected export growth ranges of 15% to 16.9%. 3 Employment increase: The potential increase in employment could be between approximately 567,154 (low estimate) and 639,994 (high estimate) additional workers, using the employment-to-GDP ratio method. These figures are indicative of the potential economic benefits of increased digital trade under the AfCFTA Protocol. It is important to remember that these calculations are based on economic models and assumptions and that actual outcomes may differ as a result of a multitude of economic factors and real-world complexities. 6.1 Estimating the potential impacts of increased digital penetration on Ghana’s economy ODI Report 52 The other side of the equation to Ghana’s participation in the AfCFTA Protocol is that the country increases its digitalisation rate – that is, the amount of people who have regular access to the internet. Increased participation in the digital economy is likely to have growth impacts, which are likely to positively compound the effects of joining a digital trade regional trade agreement. To estimate the effect of national-level reforms, we can use the digital penetration measure, which is effectively the percentage of people who have access to the internet within a country. Further, to estimate the impacts of a 10% increase in digital penetration, we can refer to various studies that have established correlations between internet and broadband penetration and various economic indicators. These studies posit that a 1% increase in digital penetration could result in an employment increase that varies widely, from as little as 0.04% to as much as 2.4%. The effect of digital penetration is similarly significant but tends to have a broader economic impact. Specifically, a 1% increase in digital penetration may lead to an increase in exports ranging from 0.2% to 4.3%, and in imports by about 0.1% to 1%. Furthermore, this increase in digital penetration is also associated with an increase in GDP, which could range from a marginal 0.002% to a more substantial 0.3%. Applying these insights, a 10% increase in digital penetration could have a cascading effect on the economy. For Ghana, where the export figures for 2022 stand at approximately $22 billion, the increase in exports resulting from a 10% rise in digital penetration could potentially boost exports by $440 million to $946 million, using the provided ranges. Similarly, the anticipated impact on GDP could range from a slight $1.36 million to a noteworthy $204 million increase, while employment could potentially see an increase ranging from roughly 4,654 to 279,448 jobs, considering the total number of employed individuals is approximately 11.6 million. 6.2 Estimating the potential impacts of the AfCFTA and increased digitalisation for Ghana’s economy To combine the estimated impacts of Ghana signing the AfCFTA Protocol with the effects of a 10% increase in digital penetration, previously estimated outcomes can be aggregated. Joining the Protocol is projected to increase exports by 15% to 16.9%, which, in turn, is anticipated to elevate GDP by 11.7% to 12.48%. The improvement in digital connectivity is expected to boost employment, exports, imports and GDP based on the varying impacts per 1% increase digital penetration. GDP could potentially rise to between $71.32 billion and $71.74 billion as a result of the Protocol. Furthermore, a 10% increase in digital connectivity could enhance GDP by an additional amount ranging from $13.6 million to $204 million. Thus, the combined effect ODI Report 53 on GDP could range from an increase of approximately $71.33 billion to nearly $71.94 billion. Exports may increase to between $25.41 billion and $25.83 billion. With the additional impact of increased digital connectivity, exports could grow by an extra $441 million to $948 million. This leads to a combined increase in export value potentially ranging from about $25.85 billion to almost $26.78 billion. The total number of workers in Ghana may rise by approximately 567,154 to 639,994. A 10% increase in digital connectivity could additionally raise employment by approximately 46,550 to 279,848 workers. Therefore, the combined potential increase in employment could range from roughly 613,704 to 919,842 workers. These combined effects highlight the multiplicative benefits of policy measures aimed at both trade facilitation and technological advancements, with the caveat that the actual results may vary as a result of a wide range of economic, social and political factors. ODI Report 54 7 Conclusions and policy recommendations 7.1 Conclusion The analysis reveals a nuanced landscape of opportunities and challenges for Ghanaian businesses in the context of the AfCFTA Protocol on Digital Trade. While there is significant potential for growth in digital commerce both domestically and internationally, addressing knowledge gaps, enhancing digital infrastructure, providing regulatory clarity and fostering stakeholder engagement are crucial steps to unlock the full benefits of the Protocol and drive sustainable economic development in Ghana. Analysis of questionnaire responses from the public sector reveals several key initial signals and insights related to the AfCFTA Protocol. While there is growing awareness of the importance of digital trade and innovation, significant gaps exist in awareness, capacity and policy frameworks. Addressing these challenges will require concerted efforts from both public and private sector stakeholders. More investments in the digital infrastructure, policy reforms, capacity-building initiatives and collaborative partnerships are required to realise the full potential of digital trade for Ghana's economic development. Overall, while stakeholders in Ghana may hold varying perspectives on the AfCFTA, there appears to be general recognition of its potential to drive economic growth, promote intra-African trade and foster technological innovation. Continued stakeholder engagement, capacity-building and policy reforms will be essential to harness the full benefits of the Agreement and address any challenges that may arise along the way. 7.2 Policy recommendations It is recommended that a full, comprehensive review be undertaken to formulate a Ghana digital trade strategy with an action plan to implement a Ghana digital trade roadmap and execute the AfCFTA Protocol. By looking at best practices globally and adopting the Protocol, Ghana can improve its digital trade ecosystem and address the challenges we have outlined above in several ways: ODI Report 55 • Develop a comprehensive e-commerce and digital trade act. This act would consolidate existing regulations and provide a clear legal framework for businesses. • Implement a robust data protection and privacy law to safeguard user data and promote trust in the digital marketplace. Include cyber-proof applications that help protect data and users online. • Harmonise digital trade regulations with international standards. This would streamline cross-border trade and make Ghana a more attractive destination for digital businesses. • Ensure policies formulated facilitate free-flowing data to enable cross-border data exchange, which allows for more innovative business models. • Build capacity to enforce digital trade regulations and education on critical components of digital trade including digital technologies and any new forms of emerging technologies. Increased resources for regulatory bodies would ensure effective implementation of the legal framework. • Increase investment in robust digital infrastructure, digital platforms and payment channels, fintech companies and digital upskilling programmes to enable the delivery of digital trade. This can include tapping into new digital financing instruments and digital assets that come with appropriate regulations. • Ensure a competitive digital trade ecosystem that centres opportunities for MSMEs and start-ups, tailoring support to include underrepresented groups, including women and young people. By addressing these challenges, implementing best practices and making the improvements recommended above, Ghana can create a more robust and competitive digital trade environment. 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