Covid-19 is Fast Tracking Digital Transformation in Africa

By Yeremi Bolton Akpan

In a meeting at Sharm El Sheik, Egypt last October, African ministers in charge of communication and information gathered to discuss the digital future of the continent. In the course of that gathering, the ministers adopted what has come to be called the 2019 Sharm El Sheik declaration. The declaration proposed a roadmap for transforming both the economy and societies of African countries. That document formally called the Digital Transformation Strategy, had a ten-year implementation timeline for innovation to seep to the corners of Africa.

But COVID-19, and the lockdown that came with it, had other plans. With rapid job losses across sectors and companies going out of business entirely, one of the earliest realisations has been that both businesses, employees and individuals have to adapt if they want to survive this pandemic.

Expectedly, consumers have changed their purchasing habits to match with their income in these times. Payments for cash and services are delayed as much as possible to create cash reserves. Businesses have also been forced to reconsider approaches in marketing and product distribution that would previously have taken years of strategy and market tests to implement.

While this has had grave connotations for the startup scene in Africa as well as on the fragile African economy, it does seem that the pandemic is leapfrogging an unlikely sector – e-health.

E-health to the rescue

As a result of fear of exposure that may result from visiting medical facilities, many African patients are turning to online channels to get medical attention for non-critical health crises. Both online pharmacies and online consultation services are noticing a spike in patronage across the continent. While it is still debatable whether these gains can be sustained post-COVID-19, in the short-term, the sector is gaining customers in droves and players are rising to the challenging.

E-health startups across Africa are rising to the challenge to prove that they have what it takes to meet the demands of the times. Healthcare startups across the continent are rapidly adjusting their models or starting completely new services, such as myPaddi in Nigeria, OuiCare in Cameroon, Redbird in Ghana and Ilara health in Kenya.

The Chief Executive Officer of Redbird, Patric Beattie, looks at the COVID-19 pandemic from the point of view of a test posed to health companies on whether they understand the sector well enough to know what their customers need, and whether they have enough agility to adapt to the rapidly changing needs from consumers.

However, he remains optimistic that they have shown resilience.

To him, Africa had the good fortune to be the last frontier in the global march of COVID-19. As such, players had the opportunity to observe what was happening in other countries and respond accordingly.

Responding to a media enquiry, Sheraan Amod, founder and CEO of South African based online healthcare platform RecoMed, says that the sector has moved forward by 5-10 years in just a few weeks. However, he expressed hope that the forced changes in behaviour that had led to this surge in e-health service usage would last after the pandemic.

The impact on the e-Health sector is a microcosm of how online businesses across Africa are rising to the challenge posed by the pandemic. As is the case globally, implementation of new ideas are being fast-tracked, catching up with the speed at which consumer habits are forced to change.

Dropping cash for mobile transfers

Another example of deepening digitalisation is seen in the mobile money payments sector. In Rwanda, mobile money transactions rose five-folds during the lockdown, based on data collected by the country’s telecom regulator and analysed by Cenfri, a South African think-tank. While the pandemic played a significant role in that spike in mobile money usage in the country, it is essential to see that the government also implemented policy changes to encourage the use of digital transfer services as an alternative to cash, which could be a high source of infections.

Considering steps that the Rwandan government took to stimulate usage of mobile money transfer services is quite instructive on how far-reaching properly timed policy changes can go to advance digitalisation efforts. The National bank of Rwanda had in mid-March instituted some hard to ignore policy changes in the sector with an impact on both individuals and businesses. For three months, the government suspended all charges between banks and mobile money wallets and on mobile transfers, contactless point-of-sale transactions. It also increased the limit for mobile money transfers by two hundred per cent.

Apart from stimulating a five-fold growth of mobile money transactions within a month of the policy implementation, there was also six-fold growth on the value of money transferred against pre-COVID-19 levels. Impressive results.

Still, on the mobile money sector, Tayo Oviosu, CEO of Paga, believes that the pandemic has opened the minds of consumers to the convenience of mobile money payments. Paga saw a 330% increase in the number of new users it onboarded, as compared to user acquisition numbers from the previous quarter. To deepen penetration of their service, Paga also saw sped up implementation of its QR payment product. This contactless payment method allows payment through scanning a QR code with a mobile phone, thereby reducing physical contact during transactions.

What does the future hold?

While the pandemic has had an unprecedented impact on African economies, it has also given African countries a headstart in the implementation of the Digital Transformation Strategy. It is doubtful whether the Digital Transformation Strategy would have, on its own, achieved the kind of results the pandemic has forced on all in just a few months.

The question remains whether the boost in penetration of digital technologies across Africa will be sustained after the pandemic. True, it is reasonable to expect that even if there is a retraction in terms of digital consumption of services, a new baseline might be reached post-COVID-19 higher than the threshold for the past years. To Juliet Anammah, Jumia’s head of institutional affairs, Covid-19 is merely a wakeup call. What is important is what we do afterwards.

Source African Leadership Magazine