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RE-OPENING THE ECONOMY: WHAT IT MEANS FOR STARTUPS

As 2021 wound up, President Yoweri Museveni lifted the two-year lockdown of the country. In his address on December 30, 2021, he announced that all sectors in the economy would be fully opened. This was a decision that was made after government found new solutions to managing the COVID-19 pandemic through vaccinating 22 million Ugandans above 18 years, among other things.  

Two of the major sectors that experienced the longest lockdown include the education and transport sector with restrictions enforced fully and partially respectively. The lockdown impacted the country’s economy and enterprises in these sectors as some experienced loss in assets, income, labor and more.  

According to a report by National Planning Authority titled Towards Safe Opening of The Education Sector in Covid-19 Times, 2021, about 51 percent of learners across the entire education system halting their learning, the majority (60 percent) of these being from the primary subsector. It is estimated that 30 percent of learners will not return to school forever due to teenage pregnancies, early marriages, and child labour. Additionally, about 3,507 primary and 832 secondary schools are likely to close due to financial distress.  

With the full reopening of the economy expected to take shape next Monday, sections of the entrepreneurial ecosystem expect a return to normalcy.  

Paul Jonathan Katumba, a startup founder in the e-commerce sector received this announcement with good news. He is the Chief Executive Officer of Minute 5, a startup that is bringing food markets to consumers and businesses through its digital platform. 

Katumba says the full reopening of the economy presents new opportunities to tap into and for startups, this is the moment to position themselves. 

“Innovators in e-commerce now have more time to get products to consumers. Transportation and logistics through the night will get better more so for innovators who work with local suppliers and producers. Also, innovators that depend on the nightlife economy such as those in the transport sector stand to gain more business,” Katumba says. 

He believes that the biggest challenge for most e-commerce platforms will be how to disseminate the benefits or the service itself and that innovators will have to find clever ways to engage with their customers.  

At Minute5, the year will be spent focusing on improving their services for the existing customers. This includes several additional services or features that make the user experience better. 

Innovators in the transport sector cannot help but echo their views with optimism. “The economy fully opening is like a new year’s gift from the government to us,” Andrew Lema, the Chief Executive Officer of Easy Matatu said. 

Easy Matatu, a startup in the transport sector, uses an application to connect commuters to safer and more reliable transportation. 

The government’s directive on 50 percent passenger capacity for public transport, including commuter taxis, affected the business’ targets. While their goal was to provide an affordable alternative to regular professionals, the limitations on the capacity forced them to hike prices and negatively affected their main offers.  

With the economy open, Lema says they have been able to lower their prices once again.  

“Many people had stopped using commuter taxis because they were no longer a cheaper option. They had started using boda bodas,” Lema says adding, “There is an opportunity right now to reclaim this population of commuters as well as take advantage of schools’ reopening to provide solutions. After all, Easy Matatu rides can be accessed digitally and are faster, cheaper and safer.”

With the economy fully reopened, he says Easy Matatu will be transporting more people, and doing trips throughout the day as opposed to prior times when they have been doing major trips in the morning and evening. 

They are also planning to tap into the corporate market by offering transport solutions to employees of corporate companies at subsidized prices.  

However, for now, the challenge ahead stems from the government’s directive of mandatory vaccination with evidence of a card.  

“Many of our drivers work from morning to night and thus have no room or opportunity to access vaccination centres that have waiting periods. So, I am concerned about how the mandatory vaccination cards will play out,” Lema says. He suggests that vaccination centres are set up near the passenger parks so that drivers can have easier access to the service.  

Regardless of the challenges, there is hope to take advantage of the reduced commuter taxi prices to introduce new passenger application routes on and ease transportation for more commuters.  

The education sector that felt perhaps the brunt of this closure heaviest also rejoiced at the news. KAINO AFRICA is one of the startups that have innovated around education. During the closure of schools, the startup provided a centralized academic content-based Smart School Management System for African schools. The Co-Founder of KAINO AFRICA, Lyndah Kembabazi, says that their sector reopening causes a big sigh of relief.  

“Much as we had extended our product wing to cater to homeschooling, we are back to solving the bigger problem as our mission of revolutionizing the early childhood education sector in Africa,” Kembabazi says.

She says the lockdown crippled the education system and the various innovations also in part created a wider digital divide, leaving most of the children behind. She believes that the lesson for entrepreneurs in all of this, especially in the EdTech sector, is to innovate around the causes of the problems affecting the education system and not just the symptoms. In her view, this is the only way to stay relevant. 

Regarding the opportunities for the EdTech startup, Kembabazi believes that technology is evolving, and the education sector must lead and not just follow.  

“Teachers are central to preparing learners for the digital world tomorrow. You will be shocked how many teachers live in oblivion to these changes. Mandatory refresher courses need to be done not only to teach them the best teaching practices but also to introduce teachers to technology application in their classrooms and online classes can come in handy,” Kembabazi says. 

 She says the country needs fewer theory-based classrooms and more practical ones. She offers solutions like virtual reality, augmented reality, social media channels like YouTube, and education websites as a must-have for students before they move into their work life, which makes them feel better prepared for their future careers. 

Kembabazi also says, “Big data being the new oil, innovators can create solutions around it. With schools collecting a wealth of data about students, this data can be used to find patterns and helpful information to better understand how to serve their students.” 

With schools reopening, the startup anticipates challenges around a regression in the uptake of EdTech.  

“What is needed is a paradigm shift for them to understand the vital gaps technology can narrow down,” Kembabazi says. 

Regardless of the challenges, EdTech players believe they will remain relevant as long as they solve a pain point for the customers. “The pandemic has given us a quick glimpse into the future, integration of information technology in education will be further accelerated and online education will eventually become an integral component of school education,” she concludes. 

For the Secretary-General of the Early years Foundation, Immaculate Mayira, the reopening of the economy, especially the education sector, was long overdue. The Early Years Foundation is an umbrella body under which all early childhood learning and daycare centres convene.  

From April to October 2021, this foundation advocated for the reopening of early learning centres, which the Ministry of Education had said would be closed until the pandemic ended. 

Mayira says the reopening means that certain ecosystems resurrect or survive once again, given that schools were some of the biggest consumers in the agricultural sector for items like maize and beans as well as in the trade sector for things like stationery. 

She notes that businesses that are coming out of the two-year closure can recover only that this will take a bit of time. 

To aid in business recovery, Mayira recommends that businesses take advantage of the available COVID-19 boost funds and stimulus packages offered by different organizations. In a report by Daily Monitor, the government states that its economic recovery plans include mitigating the impact of COVID-19 on businesses through mass vaccination and financial support. It will also redirect national budget resources to job creation, industrialization, and other high growth sectors.   

The Future Lab Associate at The Innovation Village, Susan Asiimwe says knowing that the journey to recovery may be long, this launchpad for entrepreneurs through its programs like the Next Wave Programme and the COVID-19 Recovery and Resilience Program will continue its work to support startups towards recovery through mentorship, skilling and linkages. Through departments like the Future Lab, The Innovation Village will continue to support businesses that are solving the pain points in every sector by leveraging technology to create solutions. 

This year, The Innovation Village will continue to collaborate and co-create with stakeholders in the ecosystem to escalate each sector’s recovery.