How African Startups Are Responding To COVID-19: What Help Is Out There?

    Digest Africa Research Briefs
    In Brief

The now global coronavirus pandemic (COVID-19) is causing startups all over the world to take drastic measures to protect both their business and stakeholders. Social-distancing, self-isolation and quarantine are now common terms since the first case of COVID-19 dating back to November 2019, all being practiced in a fight to stop the contraction and spread of this deadly virus. The severity of this disease is reflected not only in the number of cases and deaths (currently 523,892 cases and 23,647 deaths as at 27th March 2020 according to Worldometers) but also the freefall in the global equity markets with major markets including London, New York, Paris, Tokyo, Hong Kong and Johannesburg all down at least 25%.

Following the United Nation’s warning that the outbreak could cost the global economy $1 trillion this year alone, the public, private and non-governmental sectors are providing some resources for startup founders and business owners during this time. The US government passed a stimulus of $2 trillion, while similar stimulus for economies in the UK and Europe respectively are $66 billion and $135.28 billion. Furthermore, USA’s Small Business Association (SBA) is offering disaster assistance loans of up to $2M for small businesses affected by the coronavirus. This is in addition to an express loan program for exporters whose overseas sales have been affected by the pandemic. In Asia, the Chinese government ordered the lowering of barriers for startup loans and in Australia, entrepreneurs can now access cash grants up to $25K as well as other tax breaks, to mention but a few. 

The African continent too has been affected and is drawing out measures of its own. Various countries are going into lock-down with closed borders, travel and public gathering bans. South Africa, Egypt, Algeria, Morocco, Tunisia and Burkina Faso currently record the highest number of cases so far with 927, 495, 367, 275, 200, 152 cases respectively. 

The African Startup community is adjusting to the changes and bracing for a harder hit as they operate in smaller economies that are reliant on foreign direct investment and where capital is already scarce. To survive will require resilience and guile, luck and every little help.  From making use of new work options to eliminating middlemen in the service delivery process and embracing partnerships to work together while looking out for any relief on offer. Startups ought to utilize these means to fight the COVID-19 spread. In the words of Jack Ma "Never give up. Today is hard, tomorrow will be worse, but the day after tomorrow will be sunshine." 

Below we list some resources African startups are using or can make use of during this trying time to ensure they survive. 

Adoption of remote work options. 

To control movements and therefore spread of the virus but still keep operations going, startups are opting for a work-from-home policies. Nigeria’s IROKOTV, BuyCoins, Paystack, Andela and Flutterwave have implemented this, with some giving additional compensation to cover toiletries and groceries. Although this saves time that would be spent in the daily commute, it does not support as much collaboration as the office space does.

Use of Jumia’s digital retail network.

E-commerce platforms can pick a leaf from Jumia’s adaptation to a pan-African digital retail network in response to COVID-19 by offering African Governments its delivery network for the distribution of supplies to healthcare facilities and providers. Startups in the Health and Pharma sector can make use of this to deliver medical supplies to customers. Jumia will be donating certified face masks to health ministries in Ivory Coast, Morocco, Kenya, Nigeria and Uganda. Also to avoid physical contact, Jumia is offering customers contactless delivery. 

Cashless transactions through payment platforms

Aside from the health supplies donations, Jumia will also reduce fees on its JumiaPay finance product to encourage digital payments over cash. Studies by the National Institutes of Health  suggest that the coronavirus is stable on surfaces and therefore handling cash pauses a huge risk of  the spread and contraction of the virus. Mobile money platforms like MTN Mobile Money, M-Pesa and Airtel Money have either cut or waived some transaction fees, to ease payments for individual users and companies too. Uganda’s  Xente allows customers to make everyday purchases and pay for them using Mobile Money, Visa and Mastercard and Swipe2Pay empowers businesses to accept both card and mobile money as a mode of payment. These can be vital to consumers and suppliers in this time.

CcHub’s offer of funding and support 

Africa’s largest innovation incubator Co-Creation Hub will offer $5000 - $100,000 funding and engineering support to tech projects aimed at curbing COVID-19 and its social and economic impact. The projects will cover last-mile communication, support for the infected and most vulnerable, production of essential medical supplies and support for disrupted food-supply chains. The organization and its affiliate iHub will offer engineering support and resources from its CcHub Design Lab. Interested startups can respond to the open application of CcHub’s website.

Credit facilities

South Africa’s Standard Bank has offered a three (3) month payment holiday for debt-repayments for qualifying business owners with an annual turnover of 20 million rand. Nedbank also offered solutions like debt repayment holidays, extended loan periods, or short-term credit extensions on a case-by-case basis. Kenya’s KCB Bank has set aside a KES 30 Bn credit facility for individuals and businesses and businesses struggling with the effects of the pandemic. Equalife Capital is also launching an Africa Venture Debt COVID-19 Relief Fund to provide concessional venture debt that will support the existing, strong ecosystem to survive the next year and get growth back on track in 2021.

Utilizing pop up tech solutions

Emergence of pop-up solutions like InStrat’s COVID-19 app and iQube Labs’  MyServiceAgent provide health workers with accurate information about the disease and help health authorities effectively entertain inquiries about the pandemic and respond to calls for tests. Startups that are seeking more information on this pandemic can acquire it through apps in real time to educate their staff and also report any possible cases within the company. The Smile Identity team is making their facial recognition identity services free to companies in #healthcare.

Conducting events online

Apps like TeamViewer, GoogleMeet, Skype and GoToWebinar can be used by African startups to have conference calls, team meetings as well as webinars. For startups trying to raise, apps like Bonfire, Fundly and Crowdfunder can be used. These tech solutions allow what would usually require a physical meet to be conducted for the smooth running of the business. 

Digest Africa urges all to wash your hands with soap, sanitize them frequently with an alcohol-based sanitizer, wear protective masks and gloves while going out into the public if need be but most importantly staying indoors to prevent the spread of the deadly coronavirus (COVID-19). 

If you’re a startup fighting the COVID-19 pandemic through your business or offering solutions to other startups in these tough times, contact us here for the opportunity to be showcased on our website.

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