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Ugandans save $7bn through digital tools, reveals new study

In spite of many businesses operating informally, digital presence has greatly enhanced their reach to clients

In spite of many businesses operating informally, digital presence has greatly enhanced their reach to clients

Back in 2015, a study by Digital Impact Awards Africa (DIAA) revealed that of Uganda’s top 1,000 taxpayers, 59 per cent of them lacked corporate websites and online digital presence.

Conducted under the HiPipo Include Everyone program, DIAA’s study further exposed the fact that those without corporate websites incurred higher operational costs and reduced profitability.

It is from these damning findings that HiPipo, a leading digital age organization, embarked on a sustained advocacy in digital transformation mainly through digital and online presence for companies. Nine years on, the results show substantial benefits in reducing costs and enhancing customer service. On a wider scale, it continues to drive digital and financial inclusion across the country.

According to Innocent Kawooya, the co-founder and CEO of HiPipo, the financial impact on customers of Uganda’s top 1,000 taxpayers is staggering. They save approximately $1.9m daily through digital tools. Over ten years since 2014, this figure has scaled to $7.28 billion, which accentuates the substantial financial benefits of digital adoption.

“For instance, customers can find the information they need online and interact with service providers in real-time. Each online interaction saves customers an average of 30 minutes, and customers of these organisations save approximately 1.5 million hours daily. This boosts organizational efficiency and profitability,” he said.

“Today, approximately three million online interactions occur every day among the 1,000 organisations, and each interaction saves an average of 30 minutes, leading to a daily time savings of around 1.5 million hours and a financial impact of approximately $1.9m. The weekly online interaction count reaches at least twenty-one million, saving approximately 10.5 million hours and generating a financial impact of about $14m. The monthly online interaction count reaches approximately 90 million, saving around 45 million hours and leading to an economic impact of approximately $60m. These figures highlight the efficiency gains and financial benefits of digital transformation to Uganda’s business and financial sectors.”

According to the study, these organisations facilitate at least one billion online interactions over a year, saving approximately 547.5 million hours and resulting in an economic impact of around $728m. Over a decade, since 2014, these organisations have handled an estimated 11 billion online interactions, saving around 5.475 billion hours, with a financial impact of approximately $7.28 billion.

“This usage has far-reaching impacts on enterprises and governments. For instance, digital adoption aligns with national economic growth
goals by reducing business costs and increasing customer convenience and profitability. This trend benefits small, micro, nano, SMEs and individuals running businesses. Effective, flexible policies become more urgent as governments should support digital innovation through favourable policies, recognising its impact on national competitiveness,” Kawooya said.

The findings of this study suggest that even more attention should be paid to this effect. We plan to run subsequent surveys covering digital tools and financial services, exploring their combined time-saving and economic growth impact. HiPipo’s advocacy has driven digital innovation in East Africa and beyond for nearly two decades.

Thanks to this advocacy, similar outcomes have occurred across different East African economies, just like the current Ugandan outcomes. Through initiatives such as the DIAA, HiPipo has highlighted the transformative potential of technology-based solutions, contributing to enhanced efficiency and economic growth among Uganda’s top taxpayers, SMEs, micro, nano, SHFs, and millions of merchants.

This paper further outlines the telecommunications landscape in Uganda as of March 2023. During this period, the average data consumption for Ugandan telecom subscribers was 1.7GB per month. Over the past two years, data expenditure has decreased by 6%.

Internet subscriptions have grown by 1.2 million, reaching 27 million, due to the increasing access to the internet through mobile devices. These mobile devices comprise 39.1 million of the devices accessing Uganda’s telecom network, 21% of which are smart devices.

This study notes that women, especially in urban areas, are leveraging digital tools to save time and money. However, using digital tools needs to extend to off-grid locations where access to power and energy remains challenging. Women are more likely to be employed in lower-paying jobs and sectors, particularly in developing economies such as Uganda, where a weighty portion of the population earning less than $115 is female.

The report recommends that leaders prioritise digital presence and recognise its importance in enhancing efficiency, profitability, and economic growth. This includes investing in high-value corporate websites, content and digital channels to improve customer engagement and reduce operational costs.

Leaders must focus on mobile platforms as mobile is increasingly the primary channel for digital access in Africa. Enterprises should prioritise responsive, mobile-friendly websites and apps to meet customer needs. According to Kawooya, continuous improvement, such as updating the National Information Security Frameworks, is necessary.

“Partnering with experts such as Cyberplc to support all security architecture and technical security assurance domains, such as risk identification, network security, data protection, identity management, posture and vulnerability management, logging, and threat detection, is vital. Regularly evaluating and improving digital strategies is necessary to stay aligned with evolving technological trends and consumer expectations,” he said.

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