Online Market Development and Integration Overview
The Eastern Africa Regional Digital Integration Project (EARDIP) is a World Bank financed series of projects aimed at advancing digital market integration in Eastern Africa by enhancing cross-border broadband connectivity, data flows and digital trade. The EAC initiative consists of 4 components, including Component 3: Online Market Development and Integration. This component aims at enhancing the regional online market by removing barriers to cross-border trade and payments, as well as investing in key enablers for expanded digital service delivery. The component will be supporting implementation of the EAC E-Commerce Strategy with the objective of enhancing capacities for growth, improving legal and regulatory frameworks and increasing trust in digital trade.
Activities under the component will contribute to harmonisation of policies, laws and regulations to facilitate seamless online transactions, promote interoperability of digital financial architecture, create secure and efficient e-commerce system and enhance consumer protection.
Current Status
E-commerce and digital financial services are emerging as key enablers of economic transformation in East Africa. The region has witnessed significant growth in digital trade and e-commerce, boasting impressive growth in mobile money adoption and digital financial inclusion, with some Partner States leading globally in mobile money innovation. As of 2023, Eastern Africa had the highest number of mobile money users in Africa—over 294 million registered users. Mobile money platforms in the region illustrate the region’s potential for leapfrogging traditional financial systems through digital solutions.
Despite this, e-commerce adoption across East Africa remains negligible, and intra-regional trade—particularly in digital services—is minimal. Weak and fragmented regulatory frameworks, low level of interoperability of systems that facilitate digital financial services, and inadequate consumer protection laws continue to impede cross-border online market integration. While some countries have developed national e-commerce policies, regional alignment remains a challenge, limiting the ability of businesses and consumers to fully participate in digital trade across borders. Kenya, which leads in fintech, cross-border digital trade with other EAC countries accounts for only about 2% of total services trade, and over 90% of this is tied to transport and travel services rather than digital or e-commerce transactions.
Novel innovative digital payments and lack of e-signatures frameworks present challenges due to varying regulations and technical standards across the EAC Partner States. There is also a growing need for mutual recognition of digital credentials and trust frameworks to facilitate remote transactions.
Additionally, online intermediaries operate in an uncertain regulatory environment, affecting consumer trust and business operations.
Despite these challenges, regional efforts are underway to establish a more coherent policy, legal and regulatory framework to support digital trade integration.