Across America, Covid-19 is bringing a new ordinance in one small piece which travelers experience daily: paying toll gates with cash. As the virus dislocated market systems, making touching cash a dangerous decision, state governments moved quickly to digitize toll payments. It seems very simple but it is a momentous decision because a few years ago, some activists went to courts to protest their rights to pay for things, with cash. Yes, even if you digitize your restaurant payments, you must still have a mechanism to collect cash from customers.If you do not do that, you are breaking the law of the land. But now, paying tolls in most locations would be all electronic. Only Covid-19 made that possible. Companies like Chipotle, an eatery chain, have eliminated cash payments. Either you pay with a card or you go hungry.
That takes me to what is happening across East Africa. Rwanda now requires people to pay through digital means in Kigali. Uganda wants the informal okada riders to join e-hailing companies which have better tools for digital payments. And Kenya has taken it all the way: “Kenya’s National Transport and Safety Authority (NTSA) wants privately-owned minibuses involved in public transportation to start using cashless payments to collect fares”.
Kenya’s National Transport and Safety Authority (NTSA) wants privately-owned minibuses involved in public transportation to start using cashless payments to collect fares. When in force, customers will be required to make payments with their phones while boarding ‘matatus’ as the minibuses are called in Kenya. To achieve this, the NTSA has reportedly called for bids from tech companies who will take up the task of installing necessary software on the matatus.
While the immediate motive appears to be linked with limiting COVID-19 spread, the move ties into a noticeable wave in East Africa to digitize payments in the transport sector. In Uganda, the government wants informal motorcycle drivers to join e-hailing companies, while the Rwanda Utilities Regulatory Authority recently directed all motorcycle taxi operators in Kigali to have meters and collect payments using only digital means. (TC Daily newsletter)
You know the implication? These cities and nations are advancing and will possibly formalize their largely informal economic systems. Most of these redesigns would not have happened without Covid-19 as some activists would have mounted ferocious challenges. But with the virus ravaging things, those counter-calls have been muted. Why? If you think collecting cash is the way to go, governments will ask you to go and mount the toll gates and be paid for doing that job.
Covid-19 is evil. Yet, it has provided opportunities for some economies to reform. I do hope Nigeria takes actions across our market sectors and territories. There are many positive things the government can do now with no opposition in the name of Covid-19. Call this moment a generational opportunity to bring reforms in markets and economic structures.---
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