Saving the Kenyan Economy Through E-commerce and Lipa na M-Pesa

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With discussions across the globe about a possible second wave of the COVID-19 pandemic, countries need now more than ever to remain vigilant in the fight against the novel coronavirus. In Kenya, many citizens have moved on with their lives owing to the quixotic government decision to reopen the economy. However, the last six months have put the country to the test and particularly its economic sector. As such, it is crucial for organizations in the country consider moving to e-commerce and adopt mobile money tools such as Lipa na M-Pesa.

Economic Impact of the Pandemic

The impact of Covid-19 on Kenya’s economy is undeniable. Research shows that the Kenyan market has performed poorly since the first reported case of Covid-19 in March. The Nairobi Stock Exchange has seen an exodus with the majority of investors pulling outs. In addition, the pandemic has left a trail of job losses, companies closures and overall economic massacre in its wake. According to the World Bank, Kenya's labour force has dropped from 75% to 56.8%. Also, the Kenyan shilling has recorded a 5% decline against the dollar since March. Like many other counties, Kenya was not adequately prepared for the Covid-19 pandemic. Kenyans in the diaspora are also facing the pandemic crunch. In fact, data shows that diaspora remittance has recorded a significant drop owing to global inflation.

The first wave of the virus nearly brought the country to its knees. As a result, the pandemic shed light on the nation's low level of preparedness and highlighted critical flaws in our economic structure. Most of the Kenyan labour-force constitutes of casual labourers and small-scale business owners. The country is also seriously dependent on the tourism sector for its economy. As a result, many of these people are in the direct firing line of the economic recession. Kenyans must find new ways to remain relevant in the coming months to avoid complete annihilation due to the second wave of the virus. Specifically, Kenyans need to shift to e-commerce to increase their financial security and client base.

Adapting Through E-commerce

The ICT industry in the country is proliferating. Moreover, Kenya is one of the leading countries globally in mobile money. Safaricom's Lipa na M-Pesa is readily available and has dramatically benefited Kenyans during the pandemic. With the free transactions for payments under KES 1,000, Kenyan e-commerce has skyrocketed. Many Kenyans have already started taking advantage of e-commerce to increase their revenue during the last few months. Small goods and service providers have opted to exercise flexibility in business to sustain revenue. Shifting to e-commerce and remote work is steadily gaining ground. Delivery companies in the country recorded a spike in the orders for groceries, meats, fish and fresh fruits. Moreover, businesses that were quick to adapt to e-commerce have recorded a rise in revenue during the pandemic compared to other times.

Serious business owners are making use of e-commerce billing tools such as Lipa Solutions, which efficiently maintain records of all M-Pesa transactions. Such tools have enabled businesses to improve their record-keeping through Quickbooks integration, report generation, SMS billing and invoicing. In preparation for the second wave of the virus, Kenyans need to act quickly to position themselves strategically. Businesses should make use of e-commerce and Lipa na M-Pesa billing tools such as Lipa solutions. By adopting new technologies and ways of doing things, individuals can continue to earn a living despite the harsh economic times associated with the pandemic.

By Christine Njoki - Published 31st Oct 2020, 07:00am

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