By Stefan Nalletamby
As the COVID-19 pandemic continues to have
a devastating impact globally, the African continent, while less
affected, is preparing to undergo its own severe social and economic crisis. As
of April 7, over 10,000 cases have been reported across 52 countries in Africa
(less than 1% of cases globally).
Yet despite the
slow onset, Africa’s fragile health systems will be overwhelmed if the virus continues
to spread. To avoid this scenario, governments are implementing contingency
measures with striking collateral damage in the form of shops and
factories closing, workers being sent home, and jobs being cut, with the effect
that an economic recession is looming.
In response, the
African Development Bank has raised an exceptional $3 billion, three-year bond
to help alleviate the economic and social impact of the COVID-19 pandemic. A
portion of these funds will help finance access to health and other essential
goods and services as well as the infrastructure needed to address the crisis
and create favourable conditions for resilience.
The Bank
believes that digital technologies can and will play a critical role in
strengthening resilience by enabling fast responses to this crisis while
helping alleviate its impact.
There are a
number of specific use cases where digital technologies help create an enabling
environment for human resilience during these difficult times.
A shift to a
cashless economy
Physical
money currently acts as a vector for the virus’ spread whereas technology makes
payments possible and safe. Governments and start-ups across Africa are
implementing measures to shift payment transactions toward mobile money and
away from cash, as recommended by the World Health Organization. A case in
point is Kenya, the pioneer of mobile money, where the payments industry has
collaborated to ensure that digital payments can be made across the board,
especially by the most vulnerable. For a three-month period, digital
transactions below 1,000 Kenya Shillings ($10) will be free.
Ghana too
has instituted measures to drive digital payments and combat the virus. The
Central Bank of Ghana has directed mobile money providers to waive fees on
transactions of 100 Ghana Cedis ($18) or less and has allowed for the opening
of mobile money accounts using existing subscriber registrations with mobile
operators. South African fintech start-ups are encouraging the use of
contact-less payments through point-of-sale devices.
Online business
(e-commerce)
Online
business and e-commerce platforms help maintain social distancing and reduce
the potential spread of COVID-19. Online delivery applications have become the
ideal medium to order food, groceries and medical supplies. E-commerce
platforms, whether web-or app-based, are gaining new users.
Digital
health infrastructure is helping communities safely navigate the pandemic.
Telemedicine platforms based on chatbots enable people to ask questions about
symptoms and treatment. These platforms also allow the public to assess the
probability of infection. Other innovations, such as medical tips generated via
sms or WhatsApp, advise recipients on responsible behaviors. Chatbots can also
direct patients to nearby hospitals and enable healthcare professionals to
track the pandemic’s spread in real-time.
Digital work
and learning spaces linked by internet infrastructure and virtual platforms have
increasingly become a mainstay for businesses and learning institutions as they
connect remote workers and students across countries, regions and globally.
The
pandemic has spurred innovative approaches that are helping society respond to
and minimize its impact. Even before the global pandemic however, digital
technology in general and digital financial services in particular had begun
accelerating economic resilience, particularly for the most vulnerable. In
2019, the Bank partnered with the Bill & Melinda Gates Foundation, the
Government of Luxembourg and Agence Française de Développement to set up the Africa Digital Financial
Inclusion Facility (ADFI). ADFI is a blended finance vehicle that aims to scale up
digital financial services in Africa to accelerate financial inclusion and
ensure that digital financial systems include and empower everyone, especially
women.
Boost Africa is another
initiative that is leveraging technology to spur inclusive growth. A
partnership of the Bank, the European Commission and the European investment
Bank, Boost Africa uses venture capital to support high growth SMEs that are
tech-enabled and driven by disruptive technologies.
The Social
Impact Investment Program (SIIPA), a joint initiative of the Bank and the European
Commission, leverages technology to deliver social goods and services to
underserved populations.
The
COVID-19 pandemic is severe, and its economic effects are only just beginning
to be felt in Africa. Still, innovative solutions and technology tools offer a
glimmer of hope for human efforts to boost resilience and slow or halt the spread
of the virus. We must seize upon the current urgency to rapidly develop and
deploy digital services that are universal and inclusive, and which will help
shield Africa’s most vulnerable from future economic shocks.