Angaza Partners: Here's what governments should do to keep the economy alive
By Angela Homsi and Yariv Cohen. Published on The New Times
These are unprecedented times. The spread of the Coronavirus throughout the world and the entire world led many governments to enforce extreme social distancing policies, ordering residents to stay in their homes, with the hopes of stopping (or at least slowing down) the spread of the virus.
This step adds another element of fear to these already troubling times: as if the health scare was not enough, we now have to deal with the economic implications of the massive quarantine, with over 20 percent of the world’s population already confined to their 4 walls.
In order to try and reduce the economical damage, many governments have urged businesses and companies to make every effort and continue operations remotely.
Theoretically, this is an optimal solution: the damage to both the local economy and the companies will be reduced, employees will continue to work and receive wages (and pay taxes), and having something to do will affect their mood in a positive way.
But in the real world, it is not enough to call on companies to work remotely; infrastructure must be in place to minimize the obstacles and ease the complicated transition as much as possible. Unfortunately, today, most of the developing world economies are not prepared for massive remote employment, and governments have not taken any steps to improve the situation.
If governments will not take action over the next few days, the economic repercussions are likely to be severe and painful. Without significant steps, working remotely will be impossible and irrelevant to most companies; And with no prediction of how long the current situation might last, many businesses will not be able to survive the crisis and will shut down over the next few months.
As a result, unemployment will drastically rise, many services that have led to substantial progress across the continent (such as electricity, water, communications, etc.) will disappear, and governments will face a deep recession, affecting the lives of hundreds of millions.
The good news is it is not too late. Governments can still take action to help employees work from their homes, without breaking the social distancing guidelines. Governments must shift budgets and investments in order to support the business sector and improve the chances of survival of companies, potentially saving millions of jobs, thousands of companies and a huge loss of income in taxes. To do this, governments cannot wait any longer.
So what steps can the government take to support businesses during the crisis?
Free fast internet for everyone. In the hyper-digital world that we live in, social distancing can be relatively easy. Family members can connect through video calls, children can learn online, and employees can continue working from their personal computer or cellphone. The common ground for all of these is an available, stable Internet connection. Today, even in major cities throughout Africa, stable internet access is still a faraway dream. In other countries, such access is very expensive. If governments want companies to allow employees to work without coming to the office, the first step must be free Internet to all.
Cellphone / Tablet for each family. Internet connection is, as mentioned, the most basic infrastructure for working remotely, but even the world’s strongest internet connection is worth nothing without a computer, tablet or cellular device. There is no need for powerful and expensive computers; a simple mobile device to allow people to communicate and browse the Internet will enable many to continue working from home. In the past, we have witnessed various failures (such as One Laptop Per Child initiative). The government must not be afraid: now is the time for a national-scale plan, to allow as many people as possible to join and enjoy the digital world.
TV-based education. Today, in many countries across Africa, state television channels are constantly repeating the same news which just increases panic among millions of people. Instead, governments can take advantage of this important public resource for the benefit of educating children: each channel can be dedicated to a different age, showing educational content. This will also provide children with a much-needed structure and activity, allowing the parents to work with fewer interruptions.
On top of supporting employees and businesses, governments should take advantage of the situation, and lead Africa into a digital, technology-based future, benefitting hundreds of millions of people:
Move all government services online. Today, many government services still require citizens to arrive at the relevant office, physically. Therefore, many cannot get the service they need, while others who need essential service run the risk of leaving their homes for that purpose. Now, the government can put the circumstances to good use and transfer all services to be available online, making them accessible to all. While there is a (negligible) risk of frauds - at this time, the prospect seems to outweigh the risk.
Tele-medicine services. While many are required to give up medical services and check-ups in order to remain in their homes, others are required to transport to the nearest city for simple examinations. Today, advanced technologies provide solutions to this problem, enabling medical services over the phone. The government can incentivize and encourage relevant companies, thus leading a digital revolution in the medical field, which is in desperate need of it.
Cashless economy. Although mobile money (MoMo) is in common use throughout Africa, in many remote communities, the high transaction costs make it too expensive for many who have no other option than using cash. By prioritizing MoMo services and lowering the transaction fees, the government can take one more step toward a cashless economy and a more inclusive future.
Coronavirus is a real threat to public health, in Africa and all over the world. But I have no doubt that despite the difficulties and challenges, we will emerge from this crisis: In a few weeks or months we will overcome the virus, social distancing will end, and employees will return to their workplace (if it is still there).
The government’s actions today will determine the reality we face when the crisis is over: Will it include a massive economic crisis with huge unemployment rates and a dying private sector, or will we take on the opportunity to leapfrog, innovate, and disrupt reality, taking a huge step toward a more digital, technological and advanced future for everyone.