Alliance Aims to Boost African E-Commerce

One of Africa's leading multinational banks and an ISP (Internet service provider) have signed an agreement to join forces and industry experience to further electronic commerce in Africa.

Barclays Bank Africa and Africaonline will work together to develop commercial interests that link financial services and Internet services across Sub-Saharan Africa beginning with Nairobi, Kenya as the starting point, the companies announced recently. The service that will result from the alliance hasn't yet been given a name.

Nairobi is currently a testing site for the e-commerce deal with Africaonline, the brainchild of African Massachusetts Institute of Technology (MIT) graduates, building several Internet centers in the city.

Africa has some 5 million Internet users and online access is growing exponentially there, according to Ayisi Makatiani, chief executive officer (CEO) and co-founder of Africaonline, which has backing from the African Lakes Corp.

Dominic Bryuseels, CEO of Barclays Africa has said that the Bank is looking for innovative ways to expand its scope in Africa and that the deal with Africaonline is one way to do that.

However, one large obstacle faced by the alliance is how to make e-commerce a reality in Africa where credit cards are not widely used. The deal means the companies have to figure out how to handle e-commerce without credit cards or electronic forms of payment.

Those involved with the project contend that they can overcome that hurdle. Industry analysts say that if the project succeeds it will lead to a dramatic increase in African e-commerce.

Besides the deal with Barclays Africa, Africaonline has plans under way to develop a presence in South Africa and in Egypt. The ISP currently operates in Zimbabwe, Kenya, Ivory Coast, Ghana, Swaziland, Uganda, Tanzania, Namibia, Mauritius, Botswana, Zambia and Seychelles.

Egypt and South Africa are large and fairly well developed markets, with 150 ISPs and more than 70 percent of the continent's 5 million Internet users. Africaonline officials contend that their impending presence in those countries will pave the way for the continental e-commerce project with Barclays.