Digital solutions for faster recovery from COVID-19 crisis in Uganda

KAMPALA, Uganda

The coronavirus pandemic and resulting lockdowns that gripped the world disrupted business and learning at all levels.

It was the same with the Ebola epidemic in West Africa.

The Ebola outbreak caused the education of 5 million children to be interrupted.

School closures in Guinea, Liberia and Sierra Leone between 2014 and 2015 made it difficult for governments to find alternatives for continued education, resulting in many children dropping out of school and joining informal businesses.

The current pandemic has forced most governments around the world to temporarily close educational institutions to contain the spread of the virus, impacting more than 91% of the world’s student population, according to UNESCO.

In Uganda, the Education Ministry said more than 73,000 learning institutions have been closed and as a result, 15 million students and 600,000 refugees are out of school.

With such a huge number out of school indefinitely, COVID-19 threatens to reverse years of educational progress in Uganda. Children have had to struggle with the pain of watching their futures halted and their hopes dashed.

Many who spoke to Anadolu Agency said they have lost morale. Most dropouts end up in the informal sector -- jobs and business activities that are often not registered, including market vendors, fishermen, subsistence farmers and mechanics.

Although the informal sector dominates businesses in Uganda, it is the least exposed to digital literacy due to insufficient requisite skills. According to the Uganda Bureau of Statistics (UBOS), the informal economy contributed 50% of Uganda’s GDP in 2014.

To trigger recovery from the COVID-19 crisis, the government initiated digital literacy, targeting informal business actors in their workspaces to equip them with skills needed to boost business and improve lives, in line with recommendations by the UN Capital Development Fund.

It also worked with mobile phone operators to reduce fees for digital services and offer complimentary internet data packages to consumers to facilitate cashless transactions.

And it has also seen a boom in e-payment solutions, from about $9 billion to $20 billion in 2019, according to data from the central bank.

“We are prioritizing e-commerce to catalyze innovation, growth and social prosperity in the digital economy,” said Minister for Microfinance Haaruna Kyeyune.

Another e-commerce platform connecting vendors with customers, Safeboda, was launched after the country went on lockdown.

Customers place orders through the app and pay through its mobile wallet feature, then riders based at markets deliver groceries.

“Thanks to the app, I now have more customers than ever before,” Fatuma Abas told Anadolu Agency in Nateete, a Kampala suburb.

The hailing app that has evolved into an e-commerce platform has boosted sales for Abas and hundreds of small traders, benefiting thousands of customers as well.

“By giving market vendors access to the app, it allows them to sell goods while sustaining the livelihoods of about 20,000 riders whose incomes have been affected by the pandemic. Such initiatives boost the capacity of MSMEs (micro, small and medium enterprises) through market-based digital solutions. We need more of them to strengthen e-commerce and digital ecosystems across Africa,” added Kyeyune.

According to the World Bank, Uganda’s real GDP growth in 2020 hovered below 2% compared to almost 5.6% in 2019, due to the pandemic.

There has also been growth in local fintech solutions following the COVID-19 outbreak.

Xente, an e-commerce and financial services mobile app, waived set-up and commission fees for small businesses for three months.

This saw it record a 200% jump in business-to-business turnover, said CEO Allan Rwakatungu.