By Tanatsiwa Dambuza
THE advent of the Fourth Industrial Revolution (4IR) in Africa will indiscriminately benefit the Small and Medium Enterprises (SMEs), informal traders as well as women through disruptive innovations. These include, Internet of Things (IoT), Big Data, Robots, Blockchain and Artificial Intelligence (AI) among other digital solutions. 4IR is a concept that was coined and developed by the founder and Chief Executive Officer (CEO) of the World Economic Forum (WEF) Klaus Schwab in 2016. The 4IR also known as Industry 4.0 (I40) simply conceptualizes rapid change to technology, industries, and societal patterns and processes in the 21st century due to increasing interconnectivity and smart automation which is fundamentally changing the way we live.
The 4IR is set to revolutionarize trade as we know it across the world and in Africa. This non-negotiable and inevitable dispensation will undeniably eliminate non-tariff barriers affecting women informal cross border traders and SMEs at the borders. These problems include corruption, physical and sexual harassment, border delays, unnecessary expenses, accommodation costs, unsafe modes of transport, language barriers, cumbersome customs procedures, to mention but a few.
The most desired position is for Africa to use the 4IR as a resource and tool to resolve these problems being faced by SMEs involved in cross-border trading. The 4IR is paving the way for transformative changes in the way people live and radically disrupting almost every business sector including the way the informal sector operates. For instance, the border delays can be resolved by digital technologies such as AI, 3D printing and IoT.
These innovations can considerably ease processing times which usually take custom officials hours to conclude. Most borders in Africa do not have contemporary information technology like integrated electronic devices for document logging face other difficulties in terms of the recurrent breakdowns of electronic systems and frequent power cuts. Hence, the 4IR can change the status quo through the introduction of introducing inclusive automated systems for document inspection and clearing. These are vital for cutting down length procedures for goods clearance and eliminate the inefficiencies caused by customs administrators.
Smart automation and digitization of customs processes will inevitably facilitate trade by reducing the time women informal cross-border traders and goods spend at the artificial borders. The bureaucratic pathologies, cumbersome procedures and corruption caused by customs officials will be reduced through digital and paperless, hence, improving efficiency, productivity and reliability of SMEs to customers. These technologies will inevitably simplify clearance procedures hence, ensuring that even perishable goods belonging to SMEs can reach their destination in a fresh condition.
There are major economic issues related to the informality of SMEs in Africa, with which the consequences are tax evasion, unorganized business hubs, low export potentials, and slow growth. The transition from the traditional to industry 4.0 driven SMEs will promote automation and digitalization of tariffs and other public administration processes and procedures that could reduce rent-seeking practices by public officials (Menon and Fink 2019). As suggested, the technologies of the 4IR will limit the potential of direct contact with the officials and business operators, especially when SMEs are integrated by technology into SME hubs and Clusters.
Additionally, most women informal cross-border traders who own SMEs are uneducated and do not have multilingual skills which hinders them to effectively communicate with foreign suppliers, custom officials or customers. However, due to digitization women cross-border traders and entrepreneurs can utilize their mobile phones to learn different languages through applications such as Duolingo. Google, Meta, Apple and other high-tech companies have developed translation applications that can be used to translate voices into some indigenous languages, hence making it easier for informal traders to understand other languages. This can simplify communication for SMEs and can cut translation costs usually done by third parties at the borders and beyond.
The introduction of applications such as Uber, Taxify, Vaya, and Lyft has significantly reduced transport problems faced by SMEs. It has also provided a safer environment for women informal cross-border traders who usually get robbed by the unregistered vehicle owners. Through 4IR transport and time costs may also be cut through the introduction of automated, autonomous and self-driven vehicles. Besides that, safety of the women informal cross-border traders who are usually targeted by robbers and thieves because they normally travel with cash can be improved through e-commerce platforms and blockchain.
The e-commerce facilities such ads Alipay, Paypal, Mukuru, World Remit, Visa among others allows SMEs to buy goods and services online without needing to be physically present at the market and can be shipped directly to the customer. This also helps in cutting travelling costs and research has also shown that the future of e-commerce is in blockchain because it cuts transaction costs hence making the businesses of SMEs even more productive and profitable.
The use of AI, robots, cameras, virtual and augmented realities at the borders will also reduce levels of sexual harassment caused by humans at the borders since most of the work will be done by robots. The officers will also avoid corruption or harassing women cross-border traders due to the availability of surveillance cameras and drones. Searching of illegal goods will be done by virtual and augmented reality devices and scanners which avoids the use of hands by male officers to search women’s bodies who may be suspected to be smuggling goods. Hence, the 4IR will definitely be a game changer for sexual and reproductive health rights for women informal cross-border traders who are usually abused and sexually harassed by customs officials at the border.
Although, the 4IR is not yet fully embraced in Africa as in other continents, there are significant strides and development being made in countries such as Rwanda, South Africa, Kenya, Uganda, Egypt and many other countries. The use of drones and robots in these countries to provide humanitarian relief to citizens and refugees in these countries has proven that the digital technologies can simplify many things in the continent.
In terms of policy, the Southern Africa Development Community (SADC) Regional Indicative Strategic Development Plan (2020-2030) is one of the policy documents proving the willingness of African states to improve digital and information systems across Africa to enhance the adoption of 4IR. At continental level, the AfCFTA member states are currently negotiating on the Protocol on Digital Trade and E-Commerce which is evidence that Africa is ready to develop infrastructure that allows it countries to leverage on disruptive and innovative 4IR technologies. However, it is important to note that, in order for 4IR to be meaningful for SMEs and the informal traders, the African nations must develop policies that are all-inclusive and supportive to these excluded, peripheral and marginalized groups.
The states must also be cognizant that the 4IR will also come with some unintended negative implications such as job loses, privacy breaches, scams, spams, intellectual property theft and it may also increase inequalities. Thus, it is critical for African states to create policies that ensures that these issues are addressed and most importantly states must start working on closure of digital-gender-divide before it is too late.
Although, this paper sounds futuristic, it must be noted that some SMEs and informal cross-border traders are already utilizing the digital spaces such as Facebook marketplace, Alibaba, Amazon, Ebay and Sokoku, to source and sell their products online. Others are already using their cellphones to close the language barriers, at the same time others are already using e-commerce platforms to buy and sell their products. Hence, the 4IR is already with us and it is irresistible that it is a game-changer for businesses across Africa including SMEs owned by women informal cross-border traders.
Now, it is the high time for SMEs and informal traders channel their entrepreneurial skills to digital technologies before it is too late for them to catch up. 4IR is here and it’s time for SMEs to up their game to ensure they are not left behind because naturally technology benefits the most those who embrace and understand it. As shown above, the 4IR will definitely remove NTBs at borders and beyond, but, a good trader prepares herself or himself now for the future before it erupts.
Tanatsiwa Dambuza (MSc International Trade and Diplomacy) is a Regional Trade Consultant, AfCFTA Youth Advisory Council Champion and the Co-Founder of Zimbabwe Institute of African Integration. Contact me on +263779988050/tanatsiwadambuza62@amanda