Private companies that continue to suffer a slump in demand and consumption during the COVID-19 lockdown could brighten their fortunes if they embrace digital tools and start to sell or work online, a new report by the World Bank Uganda office recommends.
The report titled; “Digital Solutions In A Time of Crisis” shows that global and local restrictions in the movement of people and goods and provision of services to contain the COVID-19 pandemic have resulted in lower consumption, loss of jobs and a 43% reduction in remittances.
These have not only adversely impacted on incomes of private companies, they have made a significant dent in tax revenues.
To counter the adverse effects of travel restrictions, the World Bank is advising companies to embrace digital skills not only to look for customers but also source for goods and services.
“The increased use of digital technologies during the COVID-19 lockdown such as mobile money, on-line shopping, on-line education, digital disease surveillance and monitoring, and dissemination of public health messages shows the great potential to support faster economic recovery and strengthen resilience against similar shocks, says the report.
Tony Thompson, World Bank Country Manager for Uganda adds that: “The digital space in Uganda is very innovative – and has quickly adapted during the pandemic. Fintechs have offered payment options, and digital solutions have reinforced and enabled the health sector’s calls to social distance and limit movement and contact. These solutions, if upscaled and developed to their potential would boost the digital economy and maximize its benefits to Ugandans.”
The world Bank warns that Uganda has already suffered from the triple shocks of COVID, Floods and the locust invasion.
The economic outcomes of the triple shocks have manifested in terms of reduced demand and very low prices especially for perishable goods such as for stuff.
Although demand collapse is linked to loss of income as well as supply disruptions, the bank argues that companies could minimize further damage by adopting digital technologies.
The urgency of the World Bank’s report is born out of the fact that up to 3 million Ugandans could slide into poverty largely due to the COVID disruptions.
The bank also predicts that Uganda’s economy will grow at a much slower pace of between 0.4 and 1.7% compared to the 3% projected by the government.
The Bank has made a number of recommendations for the economy and ICT sector, including implementing supportive policies and regulation, review of taxation in the digital economy, leveraging technology to support the health sector and economic recovery through increased digitalization of agribusiness and manufacturing.
It also calls for expansion of social safety nets, and transparency and accountability of government’s response to COVID-19.
It further recommends the development of a coherent strategy of ecosystem support and catalyzing regional and global integration of Uganda’s digital economy.