The COVID-19 crisis has generated sudden and significant changes in the way that people work, produce, consume, trade and live. There has been the widespread turn to working from home (especially for typical white-collar activities), and the deepening reliance on e-commerce for groceries and other daily goods, which has affected notoriously traditional retail.
However, with the exception of the temporary impact of the pandemic on travel and other leisure activities, activities like the use of e-commerce and working from home are not new to the world and to the people in East Africa.
The technologies that have facilitated these changes have been available and were in use before the crisis. Working from home had been increasing in creative industries and other services. E-commerce companies such as Amazon, eBay and Jumia were giant corporations even before the pandemic. The use of electronic means of payment has been spearhead in many regions, notably in East Africa.
What has changed has been the speed at which these changes have lately occurred. Different analysis has shown that COVID-19 has accelerated e-commerce growth by 4 to 6 years.
Impact in agriculture: Digital platforms in Uganda
Technology, even before the pandemic, was transforming the agriculture sector in East Africa. Biotechnology, robotics and smart warehousing have increasingly been employed to produce and commercialise products there. For example, remote sensing using drones is used in Tanzania to monitor the state of crops such as cassava, beans and maize.
Of the technologies increasingly adopted by East African farmers, digital agriculture platforms (apps) are becoming a critical means to engage in e-commerce. Of the firms providing agtech solutions in the region, 75% were providing apps. Apps offer farmers a wide range of services, including obtaining market information, finding buyers, purchasing materials used in production and obtaining credit, among many others.
In Uganda, more than a million farmers were using apps before the crisis, and they particularly valued the ability to access buyers, buy necessary materials and obtain advisory services and real-time information on prices and weather. Apps have helped to enhance productivity by increasing the access of critical inputs and services and promote diversification, especially into new markets. However, a gendered digital divide still exists with the use of these platforms, in terms of access to the internet and productivity-enhancing benefits.
It should come as no surprise that the use of these type of technologies in agriculture has accelerated during the pandemic. This acceleration was in part fuelled by government requirements related to the pandemic and crisis management (e.g. mobile payments to farmers). But fundamentally, apps are an existing cost-effective solution to remain in business, procure materials and commercialise products in the context of stay-at-home orders. Without such platforms, it would have been impossible to continue to do business or comply with government health directives.
Cost, complexity and capabilities explain why apps have become a norm rather than an exception during the pandemic. Digital platforms are a low cost and low complexity solution. The capabilities required for their operation are relatively low, and the urgency generated by the crisis has removed any fears or preconceptions that farmers may have in using them. However, the ability of farmers to use such apps varies considerably as many of the production, exchange, and trading and sharing platforms require high technical abilities, given their larger scope compared with ag-platform business models.
The impact of these technologies goes further than just the agriculture sector, as digital platforms are also transforming the way the retailing of food is done in East Africa. Normally bursting street markets in Kampala have been seriously disrupted due to stay-at-home orders. The adoption and increasing use of e-commerce platforms (such as E-voucher, MUIIS, KOPGT and EzyAgric) has facilitated people’s access to essential groceries and vendors (with a majority women), and business has continued during the crisis.
Digital platforms and other technologies will be a distinctive feature of agriculture value chains moving forward. The COVID-19 crisis has accelerated the digital transformation of agriculture and economies across the world. The sudden acceleration of these changes may be generating serious disruption, but the direction of these changes was known well before. Despite this, digital platforms are critical in in increasing productivity and boosting the participation of women and.
Moreover, the crisis has made urgent the adoption of certain policies and actions to facilitate and manage the digital transformation process. In the case of Uganda, for example, the support provided by the government for the development and operation of digital platforms and to farmers to use them has been minimal. Although the crisis may have constituted a saviour for many of these initiatives, the policy gaps remain.
In addition, 98% of all digital platforms in East Africa exist only within national boundaries. This points to the need to understand the various regional policy gaps that prevent the proliferation of apps regionally. Creating more comprehensive ag-e-commerce regulations, with complementary actions on regional ICT skilling, could boost the necessary regional e-commerce.
Traditional constraints such as trade barriers have been hampering the development of e-commerce and limiting the benefits derived from digital platforms, including during the COVID crisis. Longer customs processing times cause delays, or there is the impossibility of bringing products from other regional partners. But there are also new challenges such as low digital trust and lack of consumer protections.
Finally, but not less important, digital platforms before the crisis contributed to the economic empowerment of women in East Africa and in Uganda in particular. Such platforms allow more time and resources to be spent on women’s education and healthcare, women can report abuse more easily and they can increase their economic autonomy. Accelerating the adoption of digital platforms may contribute to accelerating female economic empowerment. In the context of the pain generated by the crisis, this is an extremely welcome outcome, but still insufficient. Addressing the digital gender divide requires more targeted investment into apps that involve women in the decision-making process, or that are women-centric from the start.
This piece is part of a dedicated series to spur dialogue, conversations, and debate alongside the WTO's Aid for Trade Stocktaking event taking place from 23 to 25 March. The piece responds to the event's Theme 3: Digital connectivity and ecommerce.
This article was originally published by the OECD on 4th March.
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