Digital Inclusion: The undisputable power of tech for human development

Mark Kapchanga reports on the importance of digital technology in ameliorating financial stress, removing gender and economic barriers, and improving health coverage for all Africans.

After attempting and failing several times to secure formal employment, Sylvia Muchiri, a University of Nairobi commerce graduate, decided to venture into entrepreneurship.

She first thought of investing in the transport business but the initial capital requirement prevented her from doing so. Instead, she opted for the less lucrative trade in mitumba, the sale of second-hand clothes. Muchiri had Sh15,000 ($150), which she says was a product of the savings she had made from the loans extended to learners in higher education.

“Despite the business being associated with the less literate people, I had no [choice] otherwise. This is because I had approached one of the commercial banks in Nairobi for funding but my request was declined,” says the mother of two.

However, 15 years later, Muchiri has no regrets for taking the road less travelled by university graduates. The business that was born in Gikomba on the outskirts of Kenya’s capital has spread to other major towns such as Nakuru, Mombasa, Eldoret and Kisumu. “It’s gone from a one-woman activity to 12 employees. Indirectly, I have created employment for more than 100 people,” she explains.

Muchiri pegs the success of her thriving business on the expanded technology available in Kenya, which has made it possible for her to access digital financial services. These have not only enhanced her ability to earn money but has also informed the spending of the funds available.

Morris Aron, an economist in Nairobi, observes that technology has broken barriers to financial inclusion such as  stringent account opening requirements, lack of collateral on the part of borrowers and a lack of user data for the design of targeted policy interventions.

“As a result of this development, we are witnessing the narrowing of the gender gap. Initially, the social fabric was frayed such that women were not treated equally, compelling them to be trapped in the informal economy,” argues Aron.

The intense growth of digital financial inclusion in not only Kenya, but also Uganda, Rwanda and Tanzania has given millions of entrepreneurs the ability to get start-up capital, do business smoothly without involving bureaucratic layers of middlemen, and save and invest in critical areas such as health and education, he adds.

 

Tech and health care

Another instance, Rwanda is today leveraging on mobile phone technologies to boost its health care. Under a system known as TRACnet, mobile phones are used to enhance communication between remote HIV/Aids medical care facilities and administrative centres, thereby enabling health officials to follow and assist individual patients.

But mobile phone technologies are not just offering the tracking of patients in the health sector. In Uganda, such technology enables premium support to be given to expectant mothers in a bid to reduce perinatal mortality rates. 

According to the Mother Health International, a not-for-profit organisation, mobile midwives respond and provide relief to pregnant women and children in areas of disaster, war and extreme poverty. Using the centering model of care, each village receives monthly visits from the midwives who come with assessment tools, medicine and prenatal vitamins as well as phone numbers and phone credit to help mothers call labour lines and receive help when they go into labour.

Flora Chepkwech, a mother of two in Mbale, Eastern Uganda, says she has twice benefitted from the mobile midwives after losing her first pregnancy due to lack of accessible medical attention.

“It saved me from regular visits to hospitals, which are also far away. The roads are not friendly, and as such, the only reliable means of transport are motorbikes. However, these are risky to pregnant women,” she says. In its bid to contribute towards the universal health coverage through the provision of affordable, accessible, sustainable and quality health insurance, Kenya has recently launched a National Hospital Insurance Fund mobile payment service.

“Kenyans can thus pay for their medical insurance through the use of the mobile money transfer service. Beneficiaries can also check the status of their medical cover by sending text messages to 21101,” explains Health Cabinet Secretary Sicily Kariuki.

It is a sentiment that is echoed by the UN Resident Coordinator in Kenya Siddharth Chatterjee, who says technology will play a prime role in advancing health coverage for all in Africa, despite the “cost being as distressing as the onset of illness and access to treatment”.

He says technological innovation needs to be harnessed more to improve health   and to help bring down the costs of delivering medical care services, thereby promoting equality in the continent, where the gulf between the haves and the have-nots is prevalent.

“Technological improvements could significantly help ameliorate the financial stress that is currently the most significant barrier to achievement of universal health coverage,” says Dr Chatterjee.

But the firm foundation of a healthy society is a function of healthy feeding, according to James Nyoro, a food expert and Deputy Governor for Kiambu County Government. Appreciating the fact that the link between food and health is complex, he says the lack or wrong type of food has negative consequences on health as nutritional factors contribute to the development of some diseases.

Dr Nyoro argues that ample food production would therefore not just promote the wellbeing of society but at the same time help African countries to end perennial cases of hunger, achieve food security and improved nutrition.

“Beyond the usual support extended to smallholder farmers, investing in research and organising farmers in cooperatives, there is an urgent need for agriculture in Africa to embrace sustainable technology,” he says.

 

Innovative services

In particular, mobile technology and portable devices have led to the creation of innovative services and applications that are used to boost food production. These cover weather forecasting, the supply of right and affordable farm inputs, agricultural extension services, as well as providing suppliers with the right markets for the farm produces.

Such technological innovations are being used by the Export Trading Group (ETG), a multinational based in Dar es Salaam, Tanzania, which seeks to empower smallholder farmers across Africa.

The firm’s chairman, Mahesh Patel, says farmers struggled a great deal in the 80s, 90s and the early part of the 2000s in accessing farm inputs in a timely manner because of market failures, chiefly caused by information asymmetry. As a result of this, farmers would not know where to get quality inputs to use in their fields. Worse, some would access the inputs – fertilisers and seeds – but at the wrong time.

“Time is a critical asset in agriculture. Any delays would therefore impact negatively on the entire production chain. It is no wonder that most farmers during these periods suffered economically,” he says.

Patel says the firm has so far introduced mobile technology applications to farmers in more than 30 countries in Africa, to enable them to seek interventions whenever a need arises.

“Using our mobile ETG Mobile App, which is available in both Play Store and App Store,” explains Patel, “we are able to capture all fertilisers classified by crop and application, capture farmer information and list all distributors who are classified according to their geographical locations. With the app, farmers can make orders and payment can also be made, through mobile money transfer.”

By the end of the year, the firm expects to add a new feature to its app, which tells the acidity levels of the soil from different pieces of land. The information will then be relayed on a real-time basis to a huge fertiliser plant that ETG has set up on the outskirts of Mombasa.

“This is a unique fertiliser plant in East Africa because it produces soil-specific, crop-specific fertilisers. So, whenever farmers make their orders, we would be assessing their soils to offer them the right commodity.”

 

Enter the private sector and NGOs

However, poor infrastructure in some parts of Africa may deny a huge portion of the continent the opportunity to be food-stable.

Job Oyoo, an expert in agricultural technology, says it will take time for remote regions in Africa to be looped into the system. “Besides spots of insecurity, most rural areas in Africa lack a stable power supply and mobile connectivity. As a result, most farmers in such regions have been forced to rely on the traditional channels to do farming,” he argues.

He says the lack of digital inclusion in remote regions has ended up excluding women, and giving prominence to their husbands, who are supposed to make decisions. To close this gap, Emmanuel Manyasa, an economics lecturer at Kenyatta University, argues that governments need to strike partnerships with the private sector and NGOs. He says that such an approach would bring on board the over 400m people who have been left out of Africa’s digital space, thereby creating a more prosperous and equal continent.

“Digital financial inclusion is a practical plan for helping the marginalised move towards the centre. This would not be too much to ask for, since African governments are already at the forefront in harnessing digital technologies to build more inclusive economies,” said the university don. Indeed, the Bill & Melinda Gates Foundation is one of the organisations that is playing a significant role in including millions of Africans in the digital economy. The foundation has identified five pillars to advancing digital financial inclusion in Africa. They include building an interoperable digital payment infrastructure, building equitable digital identification systems and updating financial regulations to make space for digital products and services.

Others are helping countries identify investments and policies that enable them to maximise the social and economic returns from digital technologies and infrastructure, while minimising potential harms and researching the best ways to design digital financial systems and deliver digital financial services to maximise gender equality.

In her presentation to the G7 finance ministers and central bank governors in Chantilly, Paris in July 2019, Melinda Gates argued that if African countries are able to take all the above steps, the benefits would be sweeping.

“People living in poverty, who lack opportunity as much as money, would have more power to plan for the future instead of reacting to financial needs as they happen,” she said, adding: “The poor countries they live in would generate economic growth based on widespread prosperity – that is, the kind of growth that lasts and strengthens the social fabric.”

Dr Manyasa says the ripple effects of digital innovations would ultimately create opportunities for countries to build more inclusive and productive societies, with the GDP of all emerging markets expanding by more than $3.7tn by 2025.

“This economic growth could create at least 95m new jobs, raise productivity and investment levels, and make government spending more efficient,” he observes.

Although the digital technologies hold these benefits for human welfare, Aron cautions that such advancement also comes with risks such as cyber-attacks and digital fraud.

“Governments must therefore close the digital divide and establish solid regulatory frameworks to ensure that vulnerable citizens reap the benefits from digital technologies without suffering from their potential adverse effects.”