Ms. Vera Songwe, Executive Secretary of the Economic Commission for Africa (ECA) has stated that digitizing tax payments and related processes can raise additional resources for African governments to fight COVID-19 and help move countries back to growth.
As a result, she called on policymakers to embrace digitization as the continent can achieve so much through the digitization of government payments.
“As economies digitalize, the benefits from digital payments and e-commerce multiply, thereby accelerating recovery from the COVID-19 pandemic”.
Also, she stated that digitization helps in sustaining development and facilitating the achievement of sustainable development goals, through taxes and wages.
Meanwhile, Ms. Songwe congratulated Togo and Rwanda for using digitization to manage the pandemic. According to her, these countries managed the pandemic in a way that would have been impossible without digital platforms. This includes social protection cash payments to cushion citizens from the effects of the crisis.
Experiences of Togo and Rwanda
Togo’s Postal Affairs and Digital Economy Minister shared Togo’s experience of using digital cash transfers to citizens during the pandemic. According to the minister, Ms. Cina Lawson, they built a USSD platform in 10 days. She explained that people who registered didn’t need an Internet connection to connect.
“We had 1. 6 million Togolese registering on this platform. From onboarding to receiving cash, it was all digital. If the platform deemed you eligible, you would straight away receive an SMS with the money. It takes a minute from onboarding to receiving cash”.
Cina Lawson
Besides, Ms. Lawson explained that about 44% of the population registered on the digital platform. However, 840,000 people became beneficiaries, which is approximately 22% of all Togolese.
Meanwhile, she stated that the platform guaranteed transparency as transactions were traceable. According to her, the government hired an independent firm to audit the transfers daily. Moreover, the country is using the same platform to register citizens for COVID-19 vaccinations, she added.
Also, Rwanda’s Minister of State, National Treasury, Mr. Richard Tusabe, shared his country’s experience with digitization. He spoke about the ‘Ejoheza savings scheme’. This is an inclusive scheme that targets both salaried and non-salaried workers and has a social component.
Furthermore, Mr. Tusabe said about 95% of Rwandan citizens are not covered in any pension scheme. This forced the government to roll out the savings scheme which came in handy during the pandemic.
“So, to capture the 95% to start to save and be able to retire with dignity, Ejoheza was started in December 2018. It is also a USSD platform. The government then set up a matching fund. When you save up to $18, the government gives you a matching equivalent”.
Tusabe
COVID-19 pushed 100 million people into poverty
Meanwhile, the two ministers shared experiences, challenges, and good practices. They promised to keep learning from each other’s experiences in using digital innovations. This, according to them, will help improve the productivity of businesses and ensure positive economy-wide benefits.
Ms. Vera Songwe said the pandemic had a huge toll on African economies. She indicated GDP growth estimates show that growth has dropped from 3.3% in 2019 to -2.6% in 2020. It is, however, anticipated that growth would return to 3.3% in 2021. According to her, the ECA estimates that the pandemic pushed about 100 million people into poverty in Africa. She added that the scars of COVID-19 were going to “remain with us for a very long time”.
The ECA has been at the forefront, nudging African countries to turn to and accelerate digitization to keep their economies running. It will also help to respond to the rise in poverty among marginalized citizens. Digitization, the ECA Chief said, presented opportunities for African countries to lift the poor out of poverty. Ms. Songwe Ms. SongweMs. Songwe
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