THE EFFECTS OF COVID-19 ON THE EAST AFRICAN TECH ECOSYSTEM

By: Charity Mwathi  

The COVID-19 pandemic has created a significant shift in the world. East Africa may have escaped the scale of infections compared to other regions in the world, however, the cumulative figures within the region keep soaring at an alarming rate. Presently, the number of cases in the region stands at 604, 320 with Ethiopia and Kenya churning out a higher percentage of cases in the region. This paradigm shift has majorly affected the socio economic and political climate of the region. In addition, it has impacted the technology ecosystem.  

The rapid adoption of technology has accelerated into months what was expected to take years, pushing the world into the future, a transition into the 4th Industrial revolution; a term known as techceleration. Economies of most countries are managed and underpinned by digital technologies as information and communication technologies account for 17% of GDP growth in developing countries according to the World Bank 2016. Although the technology penetration is still considerably low in East Africa, this shift has led to an expansion in the tech landscape with remote work at the forefront.   

According to UNDP Ethiopia, 64,000 workers were laid off as a result of COVID-19 in the Ethiopian industrial parks as of May 2020. On the contrary, the job market in the tech ecosystem is flourishing. Vacancies for jobs requiring digital skills such as digital marketing, data engineering, and systems development have grown in demand. Private technology companies such as Rova Digital in Kenya tapped into the market to fill the gap by providing digital training through programs such as Digital Girls in Artificial Intelligence (DIGAI) and the Kids Coding Camp. ‘The competition has increased now as everyone is working from home’ said Anne Ochieng, the project manager for the company. This movement has fastened International collaboration for Rova Digital with STEM-related companies pursuing the same goals such as GSMA, Verizon, Equals Global Partnership and ITC. 

COVID-19 has boosted innovation in the tech ecosystem with digital platforms giving various industries a prolonged lifeline. A boost in robotics and AI projects has been preferred due to less human contact. This has forced businesses to either adapt or face extinction. As a result, there has been a burst of online business activities leveraging on tech. Piki, the largest on demand service in Tanzania has implemented home deliveries to food and grocery distribution in the country. This is highly important as the agricultural sector in Tanzania accounts for a quarter of the GDP with a 20% of export value.

Additionally, telecommunications operators such as MTN Rwanda made digital payment and roaming services more freely available by removing fees on smaller mobile money transactions to discourage individuals from using cash. This model innovation has disrupted traditional banking. Finance apps such as Nilipe in Tanzania have implemented digital receipts (QR codes) for payment options and transactions to entertainment events and tourism packages.  

Furthermore, the retail stores are switching to create new e-commerce platforms or partnering with existing ones. According to the UNCTAD e-commerce Index Report 2018, Nigeria, South Africa and Kenya account for more than half of the online shoppers in Africa.   The e-commerce market in Kenya is expanding rapidly especially with the use of apps such as Jumia, Kilimall, Jiji and others. This integrates with the e-logistics space that has grown to complement the various industries which are driving Africa’s trade transformation. Kobo360 is a technology company which operates in various African countries including Uganda and Kenya enabling unprecedented efficiency and cost reduction in the supply chain. Bolt and Uber have also penetrated the market currently operating in Tanzania, Uganda and Kenya. Little cab, a Kenyan based taxi company has also set foot in the market.   

The public sector and governments hold the key to unlocking the third party provision of services aiding to reduce the operation and transactional friction in the ecosystem. The Government of Kenya has strived to empower the public service. Program training by the Kenya school of government (KSG) has been rolled out to provide e-learning and ICT program training. Hellen Adhiambo, a records officer at the Ministry of ICT in Kenya shared that the electronic records management course provided by KSG aided in the storage and maintenance of records making it easier to retrieve files. On the flipside, this raised a concern on cyber security threats and online safety posing danger to confidential information. ‘One cannot trace the number of people who have been exposed to the records even after encryption’ she said.   

With what seems like major positive advances in the technology sector, the rapid shift in the tech industry has also exposed loopholes and challenges in East Africa’s digital ecosystem. When schools migrated to online learning on the Zoom video conferencing platform due to closures, a number of students in the region missed out on the syllabus progression due to constraints in technology, human resources and funding for equipment such as a computer and the internet. The inability for nations in the region to provide stable infrastructure for basic utilities such as power and water has forced some individuals to prioritize on their basic living needs, leaving them little room to fully play a part in participating and enhancing the digital economy. 

 Additionally, a major over reliance on Western and Eastern nations was highlighted in the tech ecosystem of the East African region. There was a major disruption on the global supply chain of raw materials, the electronics value chain and the inflationary risk on products especially from China, Africa’s biggest trading partner.