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Planning for sustainable e-commerce in Africa

November 20, 2017 • Finance, Opinion, Top Stories

Planning for sustainable e-commerce in Africa

Planning for sustainable e-commerce in Africa.

Traditional retail has been transformed by e-commerce and its technological capabilities. It has proven to be an enormously disruptive but positive force, spurring innovation and providing new economic opportunities for retail entrepreneurs, particularly in the developing world. It is here that the most recent e-commerce technology – drone delivery – presents new opportunities as well as challenges.

Drone delivery has been adopted by several of the world’s largest e-commerce providers, including Amazon and Wal-Mart. While at first glance drones may seem like an expensive way to deliver goods, they provide companies with significant savings. Delivery times are slashed, employee costs reduced and petrol costs cut. Savings in HR costs, employee taxes and the risk of road traffic accidents further
buoys these efficiencies. For consumers, it provides for the exciting, novel and highly efficient delivery of goods.

In Africa, drones also enable governments access to safe infrastructure costs and retailers to circumvent the issue of poor transport and logistics infrastructure, saving time on the road and high fuel costs. In addition, they can deliver to millions of customers in rural areas who were previously out of reach due to poor road infrastructure. Drones will also provide a fast and reliable route for the delivery of medical supplies to remote communities. However, numerous regulatory and environmental obstacles remain.

Controlled networks
In August 2016, the US Federal Aviation Authority implemented a series of regulations that govern the use of commercial drones. They cover unmanned aircrafts weighing less than 25 kilograms for ‘routine non-hobbyist use’. These rules (which stipulate use only during daylight and a maximum speed of 100mph) apply solely to aircrafts controlled by humans, not the autonomous drones required by
retailers. Issues of safety and security are major factors, particularly near airports, flight paths and critical infrastructure, which may be vulnerable to terrorist activity.

Accidents are also a concern. In November 2016, a 20-inch wide drone narrowly avoided colliding with an A320 passenger plane flying over central London. Unregulated drone use may even leave shopping centres, sporting events and public rallies exposed to chemical or biological attacks.

Despite the challenges, progress is being made. The Swiss aviation authority has given permission for experimental drone delivery projects from Zurich, which will deliver from the centre of the city to waiting delivery vans spread out over a 16- kilometre area. The US-based drone company, Matternet, which is also conducting a medical supplies delivery project for the Swiss government, manages the
experiments. The company (which has also been working in partnership with Swiss Post), unveiled its ‘Matternet Station’ on September 20th – a fixed docking station located at the start and finish of the drone’s journey, ensuring secure and accurate delivery to a safe, clean environment. Recipients can access the consignment by scanning a QR code. This represents a significant step forward in developing the customer experience and in the stable control of journey routes.

Protecting commercial routes
Fixed routes will enable companies like Matternet to develop centrally controlled networks with fixed collection and delivery hubs, preventing commercial drones from going anywhere near flight paths. Strictly regulated routes, GPS-monitored by authorities, will also prevent commercial drones from flying over sensitive infrastructure, sporting events and large public displays. These regulations then, of course, need to be implemented, policed and enforced – and that presents policymakers with an additional set of challenges. Criminals, who shoot down drones to steal their contents, or those who successfully commandeer a drone for ill intent, may be difficult to identify and reprimand, particularly in remote areas with limited law enforcement capabilities. Africa is especially vulnerable.

The disparate nature of the quality of African infrastructure (physical and regarding connectivity) means that it will be more challenging to build a joined-up system of controls. Networks may lose connectivity in rural areas, leaving drones vulnerable to
robbers who can quickly shoot them down at low altitudes. Also, varying levels of police corruption may make it harder to enforce regulations. However, there are examples of success on the continent.

Humanitarian corridors
In June 2017, the Malawian government and UNICEF opened a drone corridor to trial the use of unmanned drones for development and aid missions. This is Africa’s first drone corridor and the first in the world designed specifically for humanitarian challenges. Twelve countries have applied to fly test missions in the passage, in addition to a number of NGO’s and universities. The route covers 301 schools and 486 health service points over a 5,000km2 area.

Christopher Fabian of UNICEF Ventures said, “Drones give you the ability to leapfrog over the process of building infrastructure.” This is particularly important in the absence of road and rail networks or across rocky terrain. Dedicated humanitarian drone corridors can also be quickly set up to provide emergency assistance during earthquakes or floods.

The success of humanitarian drone corridors may help to change perceptions of drones amongst policymakers. Many African countries currently restrict drone usage, and in Ghana, pilots of unregistered drones can face up to 30 years in jail. In Nigeria, drone licenses cost up to $4000, which is prohibitively expensive for e-commerce start-ups and risks leaving the market free for multinationals to dominate. The potential for drones in Africa is significant, as an enabler of economic growth and in solving some of the region’s most intractable problems relating to geography, terrain, scale, infrastructure and access. The opportunities greatly outweigh the challenges, and over time, drones are likely to become a permanent, welcome feature on the African horizon.

By Jean-Claude Bastos de Morais, Innovation Influencer and Founder, African Innovation Foundation


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