When the coronavirus disease (COVID-19) pandemic broke out at the latter part of 2019, there were mixed feelings, in so far as Africa was concerned. Being a new variant of an already known virus, not much was known about it, and some theories were put forth to suggest the virus won’t survive in Africa. But by the beginning of 2020, COVID-19 started infecting people in Africa.
According to World Health Organisation (WHO) figures 47 African countries have recorded cases of the virus with cumulative cases totalling over 3.6 million with 82,246 deaths as at April 30, 2021.
The economic impact on Africa has been huge, and it is expected that the scars of the pandemic would remain on the continent for a long time.
Dr. Vera Songwe, the Executive Secretary of the ECA, who was speaking at the launch of a Pan-African peer exchange series on the benefits of responsible digital government payments held virtually April 29, 2021, said the COVID-19 pandemic has had a huge toll on African economies. Growth went from 3.3 per cent to -2.6 per cent.
“It is however, anticipated that growth would return to 3.3 per cent in 2021. But the scars of COVID-19 are going to remain with us for a very long time. One of those scars are of course how many people more on the continent are going to fall into poverty. ECA estimates that 100 million more people would fall into poverty because of the pandemic,” she said.
She however said the poor can be lifted out of poverty through digitization.
Until the pandemic, there has been an improvement in addressing poverty. The number of people who have to live on less than $1.90 a day had declined.
World Bank economist, Luc Christiaensen was quoted as saying, “Overall, the proportion of people in Africa living in monetary poverty has clearly declined, from 54 per cent in 1990 to 41 per cent in 2015. The main contributors to this development were the expansion of infrastructure in rural areas, increased agricultural productivity and years of robust economic growth in most African countries.”
Dr. Songwe indicated the COVID-19 pandemic has hit hard the economies of many African countries, and pushed many more citizens into poverty, but some countries have used digitization to keep their economies running and provided social protection to vulnerable citizens through cash transfers – particularly Togo and Rwanda.
The United Nations Economic Commission for Africa (UNECA) has therefore been urging African countries to turn to and accelerate digitization to not only keep their economies running, but to also respond to the rise in poverty among marginalized populations.
According to Dr. Songwe, in working with African countries to accelerate digitization, the ECA established the Digital Centre for Excellence, working with Better than Cash and other institutions to improve the processes of digitization across the continent.
She congratulated Togo and Rwanda for using digitization to manage the pandemic in a way that would have been impossible if there was no digital platforms, including payments for cash.
Sharing her country’s experience with using digitization to transfer cash to citizens, Cina Lawson, Minister of Postal Affairs and Digital Economy for Togo said, they built a USSD platform in 10 days, and people who registered, didn’t need Internet connection to do so.
“We had 1. 6 million Togolese registering on this platform. From onboarding to receiving cash was all digital. If the platform deemed you eligible, you will straight away receive SMS with the money. It takes a minute from onboarding to receiving cash,” She said.
The number of people that registered onto the platform represents about 44 per cent of the population and 840,000 people became beneficiaries, which is approximately 22 per cent of all Togolese, she explained.
She indicated further that the platform also facilitated transparency, as the country hired an independent firm to audit the transfers daily. The country went further with the platform by using it to register citizens for COVID-19 vaccination, she added.
Mr Richard Tusabe, Minister of State, National Treasury, Rwanda in sharing his country’s experience with digitization, spoke about the ‘Ejoheza savings scheme’, which has a social component. He indicated that about 95 per cent of Rwandan citizens are not covered in any pension scheme.
“So to capture the 95 per cent to start to save and be able to retire with dignity, Ejoheza was started in December 2018. It is also a USSD platform. The government then set up a matching fund, and when you save up to $18, the government gives you a matching equivalent,” he said.
In her remarks, Dr. Ruth Goodwin-Groen, the Managing Director, Better Than Cash Alliance – United Nations, commended the two countries saying; “This is what we need. You understood what your citizens needed, and you responded quickly with responsible digital payments.”
By Emmanuel K. Dogbevi
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