In 2020, The Deputy Director-General of the World Trade Organization, Xiaozhun Yi, wrote that a digital economy also known as economic activity that results from daily online connections among people, businesses, devices, data and processes, is the cornerstone of sustainable development.
In an article published by The United Nations Conference on Trade and Development (UNCTAD), Yi stated that global communications networks had demonstrated their role in the delivery of essential services and outreach to less connected communities. He also said that through digitization the world could envision new and practical e-commerce solutions that could help promote economic recovery and job creation.
His remarks on the impact of digital economy are further affirmed in the 2020 World Bank report on Uganda titled, “Digital Solutions in the time of Crisis.”
The report which reflects the state of affairs in Uganda reviews recent economic developments, projections, the challenges experienced and offers digital solutions as a remedy and tool for advancement.
Some of the economic challenges range from high levels of unemployment due to the collapse of businesses, poverty, low investment and the collapse of supply chains among others issues.
In this report, the World Bank states that even in its early stages, Uganda’s digital economy is positively impacting livelihoods in poor rural households through increasing financial inclusion. It cites the advent of mobile money as one of the innovations that created a sweeping change in the financial sector by drawing the un-banked populations in rural/remote areas into the banking sector.
“Greater financial account ownership in Uganda can be attributed to the growth and penetration of mobile money, which rose to 51 per cent in 2017, from 35 per cent in 2014,” the report reads.
It also states that the presence of faster internet in Uganda has increased employment and job creation for workers with only secondary or primary school education.
Below are some of the current Ugandan digital innovations which are solving some of our long-standing problems across crucial sectors.
Trade and Commerce
At the heart of Uganda’s commerce, is the Kikuubo lane in Kampala. This famous lane is an online marketplace for traders seeking to replenish their merchandise. When Uganda went into lockdown between, March and June 2020, the trials experienced by traders in Kikuubo inspired a few innovators to digitize trade through an application called Kikuubo Online.
Paul Muyobo, the marketing manager of Kikuubo Online says, “In the first lockdown of 2020, traders in remote areas had a hard time having their stock replenished. With individual movement limited, they depended on merchandise trucks supplying their shops with goods. The trucks came around only a few times in a month and for the remotely located shops, they hardly made it.”
He says their innovation operates on the iOS and Android mobile applications, a website and a toll-free number. On Kikuubo online is a catalogue of 3600 items traders can purchase from as well as a network of transport means to deliver the goods. Through their fleet of Tuk-Tuks, boda-bodas, vans and trucks, the application serves businesses in Kampala, Mukono, Wakiso and Entebbe.
Founded in 2017 by Allan Rwakatungu, Xente is one of the steadily growing players in the financial sector. Rwakatungu says the wide adoption of smartphones and digital technology points us in the direction of a digital economy.
“A lot of businesses, today, manage their expenses manually using cash or cheques. With COVID-19 further driving people into remote work, walking to banks and offices for cash becomes impractical,” he explains.
To encourage business continuity, Xente is enabling businesses to carry out payments to staff, suppliers and other stakeholders conveniently with its electronic system.
In a sector that contributes 23 per cent to the Gross Domestic Product (GDP) of the country while employing 68 per cent of Ugandans, digitization of the sector is needed even more urgently. Digitisation is key to connecting farmers to buyers of produce, monitoring their crops and animals, empower them with key information and finding genuine agro-inputs among other things.
The founder and Chief Executive Officer of Famunera, Julius Naika, has successfully set up a digital marketplace that is currently used by 20,000 farmers in both urban and rural areas. The startup ensures that farmers access quality inputs such as seeds, fertilizer pesticides and tools conveniently through its various digital platforms including its website and USSD code. His innovation was a lifeline for many smallholder farmers in rural areas during the first lockdown in Uganda that took place between March to June 2020. By keeping these farmers in business, Famunera facilitated the continuity of food production during a crisis.
There has been a lot of discussion about the continuity of education in the shadow of a pandemic that makes the traditional way of schooling hazardous. With primary and secondary schools on lockdown for almost two years, Izere Education, through its online learning platform provided courses for primary school-going children from ages 5-18 years. The courses provided teach children critical thinking, leadership, problem-solving skills, communication skills, Informational Technology and so much more. Through its e-learning platform, Izere Education has kept school-going children occupied academically with its Solution Thinkers workbook, plus other materials like art and constructive play that can be ordered online. To date, Izere education has supported 1000 children, with 100 of those from low-income communities.
Continuity of education aside, helping children adapt to a changing world of work by giving them relevant education is a concern for some innovators.
Victor Paul Kawagga is a self-taught tech enthusiast who likes teaching and working in Robotics and Artificial Intelligence (AI). Kawagga says robotics is a way of humans sharing their intelligence with machines. By sharing human intelligence through programming with machines, human beings can carry out workloads that are difficult or monotonous.
“When you look at most current technologies, they are first tested out in robotics. Through learning robotics, children see technology in action and this empowers them to tackle problems head-on through innovation,” he explains.
Since 2012, Kawagga has worked with various organizations like Fundi Bots, training children in Robotics and AI. He says there is a remarkable shift in the attitude towards technology from when they started back in 2012. “Many students I taught from way back in 2013, have returned to me for recommendations for scholarships in Technology and Innovation fields. I see others beginning small startups in innovation like Macbots. Recently, Gayaza High School through its students whom I trained, won $1500 dollars from their robotics project,” Kawagga says.
He believes that by teaching children technology, they will lead the country into a digital economy by changing sectors that have fallen behind in technological advancement like agriculture.
In the health sector, clinician and medical student, Hilder Koriong, is bringing the digital revolution to the sector through Afro Health Connect.
Established in 2020, Afro Health Connect has a database of doctors, nurses, pharmacies and hospitals that patients can access by phone calls and by a click of a button on the website.
“People were accustomed to the traditional way of seeking health care, which involves leaving home and going to the health centre. We want to show them that health care can find them where they are. All they have to do is use their smartphones to get medical tests, medicine, a health worker, an ambulance,” Koriong says.
With a growing following on social media, Afro Health connect is providing health information from professional health workers to its audience of 10,000 people. Through the Afro Health Connect website, people in need of health care can access seven hospitals, five nurses, 13 pharmacies and 20 doctors.
Koriong hopes to increase access to health care even for remote communities. She also hopes that by keeping remote areas connected to health care, she will also create jobs for professionals in the medical field by opening up new markets for them.
These are only a handful of innovations and yet in their capacity, in just five years or less, they have been able to solve some of the biggest problems we have from financial inclusion, health access, food production, trade and education.
Speaking to the innovators above in their respective sectors, they each felt that the nation had embraced a digital economy and they could see the government contributing significantly to its advancement.
Kawagga feels encouraged by the funding worth Shs70,000,000 which he received from the Ministry of ICT &National Guidance towards building medical robots. He, on the other hand, says government needs to consider lowering taxes on imported parts for technology projects to make it cheaper to innovate.
Rwakatungu lauds the government for its recent move in streamlining the Fintech sector by introducing the National Payment Systems Act. Government is not oblivious to the transformative power of the digital economy and it is putting in place various initiatives to see to it that Uganda becomes a fully-fledged digital economy. Through an ambitious agenda for digital transformation called, “The Digital Uganda Vision”, the government’s pledges to “Transform Uganda into a digitally enabled society that is innovative, productive and competitive.”
This entails coordinated efforts by ministries, departments and agencies (MDAs) to enhance the regulatory framework for the development of the digital economy.
The Digital Uganda Vision will empower its citizens who are using digital innovation to achieve goals of universal inclusion, sustainable development, economic progress and poverty eradication.
In addition to the above efforts, in September 2021, The Ministry of Information Technology and National Guidance, in collaboration with the United Nations Capital Development Fund (UNCDF), released the Inclusive Digital Economy Scorecard (IDES) 2021 report for Uganda. IDES is a policy tool that will help in identifying the key market constraints hindering the development of an inclusive digital economy and helps to set the right priorities with public and private stakeholders to foster a digital economy that leaves no one behind. The government is supplementing these plans with budgetary allocations worth Shs134 billion for digital transformation and Shs344 billion for innovation, technology development and transfer.
To support Uganda in these efforts, The World Bank approved $200 million financing to expand access to high-speed and affordable internet, improve the efficiency of digitally enabled public service delivery, and strengthen digital inclusion in Uganda.
The Innovation Village
The Innovation Village has been working towards accelerating the adoption of a digital economy as well through the Future Lab. The Future Lab works to accelerate corporate innovation, connect and scale Uganda’s best innovators/startups to accelerate digital transformation. The Future Lab identifies leading solutions solving our most pressing challenges leveraging technology across sectors including Finance, Agriculture, Energy, Education, Tourism and others. Through the Lab’s programs, the startups get access to mentorship, partners and funding to scale the solutions, a platform converging startups, corporates and investors. Today, the Lab has engaged over 100 startups and linked over 20 startups to partnerships and funding of up to $500,000.
Some of the startups that have gone through the Future Lab are, Fintechs like Patasente and Chap Chap, Agritechs like Famunera, Tubayo a startup innovating around tour and travel, Ecoplastile a construction innovation, Mscan a health innovation, Zetu Africa and many more.
Samantha Niyonsaba Karama, the Future Lab lead says digital economies start with digital innovations and when a single digital innovation is launched, the scope of benefits is almost infinite. “Beyond providing a solution to the intended problem, digital innovations enable better collection of data, increase productivity and foster more collaboration,” Niyonsaba says.
She adds that Uganda is already on track towards achieving a digital economy but it simply needs to address a major obstacle. Players in the ecosystem continue to operate in silos. However, she believes bringing together an ecosystem to break down barriers and creating pathways for digital transformation to scale is critical.
To achieve our objective of a digital economy, Niyonsaba says, key stakeholders should identify collaboration opportunities for shared value, especially with leading startups that have product-market fit.
“Through promoting a shared-value principle, economic value can be created by tapping into new products and markets while solving a value chain problem or a societal need. There a lot of opportunities to be explored as we usher in the digital economy,” Niyonsaba concludes.