Ugandan e-commerce platforms help soften economic blow of COVID-19

eva blue pC4vFN3P8VQ unsplashPartnerships with development agencies and government efforts to boost the digital economy help soften the economic blow of the pandemic, said the United Nations Conference on Trade and Development (UNCTAD)

SafeBoda, a motorcycle (‘bodaboda’) taxi-hailing app has launched an e-commerce platform to connect market vendors with customers after the country went on lockdown to control the spread of COVID-19

Through the SafeBoda app, customers can place orders and pay through their mobile wallet feature, then market-based riders deliver the groceries. Having evolved into an e-commerce platform, the ‘bodaboda’ hailing app has boosted sales for hundreds of small traders, benefiting thousands of customers as well.

E-commerce platforms such as SafeBoda help soften the economic blow of COVID-19. And the Ugandan government is helping them flourish by fostering an enabling environment for e-commerce and the digital economy, in line with UNCTAD eTrade Readiness Assessment recommendations.

Triple-digit boom in business

After the pandemic outbreak, SafeBoda and other e-commerce platforms experienced a triple-digit increase in business.

By giving market vendors access to the app, it enables them to sell goods while sustaining the livelihoods of 18,000 ‘bodaboda’ riders whose earnings were affected by the pandemic.

The app’s e-commerce platform is the result of a partnership between the United Nations Capital Development Fund and SafeBoda Uganda, supported by the Swedish International Development Cooperation Agency.

Shamika N. Sirimanne, UNCTAD’s director of technology and logistics said the collaboration shows the added value of partners under the eTrade for all initiative, which empowers developing countries to benefit from e-commerce.

From crisis to opportunity

As part of its response to the pandemic’s economic fallout, the Ugandan government is at the forefront of promoting e-commerce and digital solutions to recover from the crisis more quickly. For example, it has worked with mobile phone operators to lower digital service fees and offer consumers complementary Internet data packages to facilitate cashless transactions. It also uses digital media to spread health messages and to combat misinformation.

In addition, the government is strengthening cooperation between the public and private sectors to improve trade logistics and increase the provision of digital services, as recommended by UNCTAD.

Ugandan authorities are also encouraging entrepreneurship by supporting innovation and start-up solutions. Additionally, the country has boosted Internet connectivity by expanding infrastructure that has allowed firms to lower their service costs.

Uganda enhances confidence in online transactions. It passed data protection and privacy law last year to improve the security of those transactions.

Uganda is also planning to develop a national e-commerce strategy with the support of the United Nations Development Programme (UNDP) to develop an e-payments law recently approved by the parliament of the country.

Digital payments on the rise

In recent years Uganda has witnessed a boom in e-payment solutions. According to the country’s central bank, mobile money transactions in Uganda, more than doubled in value between 2015 and 2019, from about US$9bn to US$20bn.

COVID-19 has stepped up e-payment acceptance and local fintech solutions growth. Xente, an e-commerce and mobile financial services app with more than 50,000 subscribers, is among the beneficiaries of the growth.

It allows people to use methods such as mobile money, credit cards or bank transfers to buy goods from marketplaces and access loans within the app. The company waived setup and commission fees for small businesses for three months after the COVID-19 outbreak.

This saw it record a 10 per cent increase in business-to-consumer transactions and a 200 per cent jump in business-to-business turnover, said its CEO, Allan Rwakatungu.

The company has also launched a new service to ease online and mobile transactions and payments for COVID-19 hardest hit micro, small and medium-sized enterprises (MSMEs).

Partnerships for inclusive e-commerce

Food start-up Jumia Food Uganda joined forces with UNDP in another partnership to boost its services, introducing contactless delivery and cashless payments as a response to the pandemic.

Under the partnership launched in May, UNDP aggregates seller groups and provides technical support to improve the company’s capacity in packaging, tracking sales and adopting the technology.

More than 3,000 market vendors from seven markets are now connected to the Jumia platform, selling their produce. More than 60 per cent of them are women, disabled people and young people.

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