The global COVID-19 pandemic disrupted the everyday operations of businesses and as a result, the cyber risk still remains a grave concern as many business practices have been compromised. The ZA Central Registry organisation, which is the administrator of South Africa’s .za domain name, recently warned that South Africa is a global target for international fraudsters and cybersecurity measures are more important now than ever before.
Cybersecurity
“It is essential for businesses to be aware of the nature of these cybercrimes and technology countermeasures to protect their businesses, especially when considering the cybersecurity challenges that have occurred during lockdown”, says Riaan de Villiers, Cybersecurity Expert and Business Analyst at LAWtrust.
Here’s a Quick Look at the Top 3 Cybersecurity Challenges Triggered by Lockdown:
An increase in cybercrime attacks: Cybercriminals are increasingly targeting users working from home, hoping to compromise their credentials that they can then reuse to gain access to the user’s corporate network.
Surge in demand for enhanced identity and access management: since many people have been working from home, interest in identity and access management solutions has surged. Identity and access management acts as a foundation for organisations to build an improved cybersecurity posture. It also allows IT (Information Technology) departments to implement multifactor authentication and single sign-on solutions across a range of approved I.T. applications.
Rise in Business Email Compromise (BEC): fraudsters are increasingly using email-based cons to catch unaware businesses off-guard. Business Email Compromise is a global phenomenon and a form of cybercrime that uses email fraud to target businesses, individuals and administrations.
“Cybercriminals have always been opportunistic but during the South African lockdown they have been especially persistent. To mitigate risk during lockdown, it is recommended to enforce virtual private network connectivity to corporate resources and implement multi-factor authentication as much as possible,” concludes de Villiers.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The COVID-19 pandemic means that millions of women in Africa and other developing regions could lose years of success in contributing to household incomes. The International Finance Corporation (IFC) estimates that approximately 80% of women-owned businesses with credit needs in low-income countries are either unserved or underserved.
Onyeka Akpaida, a Female and Digital Financial Inclusion Professional and Founder, Rendra Foundation
This is equivalent to a $1.7tn financing gap; the difference between funding available and funding needed. Consequently, the global economy does not materialise an annual $330bn in turnover due to this financing gap.
Example of Nigeria
In Nigeria, there is a 14% gap between the portion of men and women that own bank accounts – twice the size globally. While a bank account is a gateway to other financial services, it does not automatically translate into the actual use of or access to these financial services. However, the evidence on the broader inclusion of women into formal finance is disappointing.
All data points in the same direction: the current financial sector landscape, especially in low-income countries and marginalised communities, makes it easier for men to access financial services than women.
Women own and lead approximately 40% of Nigeria’s 41.5 million micro, small and medium enterprises (MSMEs). MSMEs do not only represent a significant part of the world economy, but they are also one of the strongest drivers of economic development, innovation and employment in Nigeria. Yet, work for women in African countries is characterised by low-paid and less secure jobs, so that 92.1% of women make up employment in the informal sector.
Considering that the informal sector contributes about 41% of Nigeria’s economic output, there are no labour standards to protect the workers, so exploitation and discrimination are rife, with women feeling the worst brunt of it.
Women are more intentional savers (with lower loan-to-deposit ratios than men)
More prudent borrowers (with lower nonperforming loans than men)
Calculated risk-takers
Giving women better access to credit and other financial tools and services is considered a critical enabler to achieving several Sustainable Development Goals (SDGs). To borrow from the words of the H&M Foundation: “By not giving women entrepreneurs equal access to finance, investors keep missing out on what could become the new Apple Inc or Amazon.com – every year.”
So, this begs this question: How can the government, private sector and key developmental organisations expand financial inclusion and bring more women into the economy?
Digital technology
As we search for a solution to the inequality between men and women in accessing finance around the world, the answer could be simple: digital financial services. Expanding financial inclusion ensures that women have access to financial tools and services to save for family needs, borrow to support a business (access to credit) and build a cushion against emergency (Insurance).
Most importantly, expanding financial inclusion ensures that women have the financial knowledge to make the right decisions and improve their economic resilience.
Our world is becoming increasingly more digital and new data by the World Bank Group suggests that mobile phone ownership and internet access show unprecedented opportunities to use technology to achieve universal financial inclusion.
The proportion of Kenya’s population with access to formal financial services rose to 83% in 2019 from 75% in 2016, primarily driven by mobile technology.
Kenya’s mobile money system, M-PESA, has been critical in Kenya’s Financial Inclusion Drive by providing a platform for even the marginalised households in Kenya to move money quickly and cheaply from one person to another.
Meet Halima
Like many women in Nigeria and other developing countries, Halima does not have an official form of identification, the minimum requirement for opening accounts in formal financial institutions.
Over the years, she has had to pass on several opportunities to get an account and access credit from the bank because she lacked the requisite requirements mandated by most financial institutions. That is until we met her and told her about Kudeena – our financial inclusion and literacy vehicle targeted at low-income and forcibly displaced women in the North.
Halima not only opened a bank account but became our spokesperson at the junction where she trades and in her community. She is now able to buy larger amounts of produce- thereby increasing her margins and has ramped up her catering equipment with the money she was able to save consistently, over a period of time, in her new bank account.
After successfully undergoing our financial literacy training, we were able to provide Halima with a loan via our microcredit scheme.
Filling the gap
Solving the access to finance – especially for women requires community engagement – and a nuanced understanding of the women these services are being developed for. Digital financial tools and services – and the associated learning to aid adoption can help to drive adoption at scale.
Women entrepreneurs like Halima may lack the capacity to produce collateral or sufficient credit information to access loans from traditional financial institutions. Still, they continue to generate cash in their businesses.
Therefore, they can benefit substantially from an increased availability of cash-flow-based loans without collateral or formal credit history. Financial Technology (FinTech) players are pivotal in reshaping how the unserved and underserved at the bottom of the pyramid can access working capital and cash-flow finance.
Digital technology takes advantage of existing cash transactions to provide innovative methods of credit scoring, risk assessment and disbursement. After all, cash is the only factor that can repay a loan; collateral is only the second way out if money cannot be generated. A good example is India’s Capital Float, a digital financing platform that provides quick and easy working capital loans for small entrepreneurs to address immediate business requirements.
The platform analyses borrower’s cash flow using data from e-commerce payment systems and mobile financial payment systems. The results from the analysis identify creditworthy borrowers. They then carry out electronic know-your-customer (KYC) authentication, receive the loan offer, confirm acceptance, and sign the loan agreement on a mobile app.
The Capital Float platform was launched in 2015 and has already reduced cash-flow challenges of more than 500,000 MSMEs with loan disbursements of $1.2bn as working capital for these businesses.
Governments can help by ensuring that legal and regulatory frameworks are ‘digital-ready’ to support FinTech innovation; reducing administrative obstacles and regulatory complexity, especially around multiple taxations; endorsing the adoption of efficient digitisation solutions, and introducing regulatory sandboxes that allow fintech to test solutions/products in a controlled environment.
We all benefit
Investing in women entrepreneurs is a trillion-dollar opportunity. A recent analysis by Boston Consulting Group (BCG) suggests that global GDP could rise from approximately 3% to 6%, boosting the global economy from $2.5tn to $5tn.
Investing in women goes beyond social responsibility: there is a business case for financial institutions; It improves the lives of women; and the domino effect of equality will be felt in their countries and beyond, influencing everything from its politics to its economic growth and development.
Onyeka Akpaida is a Female and Digital Financial Inclusion Professional and Founder, Rendra Foundation. This article was first published by The Africa Report.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The Covid-19 pandemic has accelerated the adoption of e-commerce in a way no company could have imagined. In fact, in many instances, it has brought three- to five-year sales projections forward in just a matter of months. Many businesses are already living in the future. A good example is Amazon.com, which has experienced record levels of demand, comparable to a usual Christmas period. Not only has its online retail operation thrived, but its video and Web services have also flourished during the lockdown periods around the world.
Gerrit Smit, head of equity management UK at Stonehage Fleming
Then there are digital payment companies such as PayPal, which has recorded a remarkable increase in transactions across its network. It took on 7.4m new customers in April alone — a 135% increase. Those new customers are doing more transactions than ever and the business is experiencing retention rates to match.
This must be one of the biggest economic shifts in the world for a long time, if not ever. Nor is this trend likely to reverse materially…Visa, too, is benefitting. Quite apart from an increase in online purchases, hygiene-conscious consumers’ reluctance to touch cash has further boosted business. This is a game-changer for all payment companies whose biggest competitor is cash.
E-commerce is perhaps the most striking example of structural shifts in the economy. Since the beginning of Covid-19 alone, e-commerce penetration as a percentage of retail sales in the US has increased in a matter of three months as much as it previously took a decade to achieve. This must be one of the biggest economic shifts in the world for a long time, if not ever. Nor is this trend likely to reverse materially once economies have fully opened and the virus has receded.
Economic shift
With millions of people working and learning from home, consumers have been forced to rely on e-commerce, and have come to understand the benefits of obtaining goods and services through the Internet. These include variety, safety, convenience and certain cost savings.
From an investor’s perspective, the economic shift to online is revitalising important investment opportunities. In addition to large retailers like Amazon and payment systems like PayPal and Visa, technology companies that enable working from home have also benefited. Consider 5G network providers, data and voice providers, cloud services, data handling and office automation services. More time at home has also meant more home cooking, to the benefit of many food and spices companies, as well as an increase in home design and décor products and services as people adapt their homes for new requirements.
Entertainment and streaming services have also benefited from people spending more time at home, as have online exercise offerings. And of course, this has translated into an increased interest in leisure and sports clothing lines.Investors will find no shortage of newly energised investment opportunities. High uncertainty and market volatility, however, will remain a challenge. Good stock selection is as critical as it has ever been. Investors should be very selective with their investments – buying only quality businesses with strong balance sheets.
Gerrit Smit is head of equity management UK at Stonehage Fleming. He manages the Stonehage Fleming Global Best Ideas Equity Fund
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Turned into global disaster, virus outbreak poses great danger to African countries that do not have robust health system argues Kaan Devecioglu
COVID-19 pandemic, which first occurred in China and turned into a global disaster spreading across the whole world, poses a great danger to African countries that do not have proper and robust health infrastructure. The outbreak, which was seen in Algeria for the first time Africa, has spread almost to the whole continent in a very short time.
Kaan Devecioglu, deputy coordinator of Turkey’s Istanbul-based African Coordination and Training Center (AKEM)
As a result of the limited sharing of transparent information and the lack of some political tools, it is quite hard to figure out the extent of the pandemic’s effects on the continent. Although the extent of the outbreak in Africa is unpredictable at this stage, it can be said that some of its effects are already observable on the geopolitical level.
The coronavirus outbreak has made it clear that problems at local and regional levels are rapidly gaining global dimensions while cooperation mechanisms for solving problems are completely inadequate. Excessive energy consumption in a certain region of the world can cause natural disasters in other regions. While there is not enough attention given to any disease in Africa, the pandemic can cause fears in the U.S, which is somewhat similar to a situation when a terrorist movement — supported to not get harmed — can also hit those who support it.
When people of different identities, religions or ideas are oppressed and excluded, this can become a threat to global peace. In this context, a global governance model which foresees that such problems can be overcome by the cooperation of humanity, has not yet been developed. Due to the weakness in this area, countries remain on their own also in the coronavirus pandemic, alliances become questioned, countries further clarify their boundaries, and positions of those who assume the leadership role of each crisis are revised. For example, while the U.S. is incapable of effectively fighting the pandemic, China claims to have contained the pandemic, creating a new global sphere of influence by offering health equipment assistance to Europe, Africa, and even to the U.S. through Jack Ma, the founder of Ali Baba company.
Challenges faced by leading policymakers of the international system in dealing with this pandemic make political, economic, and social geopolitical obstacles in front of global governance — which requires cooperation — more visible each day. So these obstacles will pose security vulnerabilities in the coming months, and the inability to govern globally will become deeply palpable.
Effects of COVID-19 pandemic on Africa
Even though the number of cases in Africa is low right now, it is currently a serious threat to the continent. The pandemic has also spread to Africa confirmed with the positive results of virus tests, especially of the state officials, bureaucrats, people from business, arts and sports — those connected to the outside world. It was the first case on the continent to be recorded with the detection of an infected person in Algeria. Then, the outbreak began to rapidly take effect in Kenya and other countries, notably Egypt, South Africa, and Morocco, respectively. The total number of cases on the continent, for example, was 450 on March 17, and this figure has already risen to over 5,400. So although there are currently eight countries with no confirmed case, considering the permeability of the borders, these numbers are predicted to rise in the following days.
Of the 54 African countries, 33 are among the least developed. Besides, a 2016 report by the think-tank the RAND Corporation on the most vulnerable countries to infection outbreaks in the world says 22 out of 25 countries are on this continent.
Therefore, almost all countries in Africa are unfavorable in many areas, from basic hygiene needs to health infrastructure. Other important and alarming factors are the presence of people living in unfavorable conditions in major cities, as well as communities of people displaced in sub-Saharan African countries, forced to migrate to other countries and living in non-sterile environments in camps. If the virus spreads to these areas where these people in the camps are struggling for life, what both the host countries and the international community can do may require serious restrictions and drastic measures.
Despite all these concerns, Africa has some advantages over the outbreak that has scorched countries in Asia, Europe, and the Americas. The first is the continent’s recent experience with viruses such as Ebola, AIDS, malaria, and Lassa fever. The experience provides significant infrastructure support for dealing with outbreaks, but insufficient health infrastructure and problems in accessing clean water across much of the continent are issues that raise concerns. On the other hand, the fact that COVID-19 has spread to African countries later than other regions around the world can also be considered an advantage in fighting the pandemic.
The rate of spread, and level of impact of the outbreak were recognized early, and measures such as suspension of international flights, extensive disinfection work, suspension of schools, limited curfew practices, and quarantine were implemented relatively at an early stage. But the international community needs to act urgently to overcome the chronic problems that will hamper the fight against the pandemic in African countries. The fight must move from a micro level to a macro level, that is, it must be global.
Geopolitical consequences of global outbreak in Africa
The most negative impact of the outbreak — which has already begun to have devastating consequences on both international economics and politics — on African countries in these areas will result from the fact that oil prices have fallen to their lowest level in the last two decades. There are oil exporter countries such as Algeria, Libya, Nigeria, Angola, Congo, Gabon and Equatorial Guinea, with their incomes dependent on oil, which will deeply feel this crisis in the short term. The disagreement between Russia and Saudi Arabia on production cuts, and Riyadh’s massive rise in production have led to serious drops in oil prices. This was coupled with the rapid decline in oil demand in China where the pandemic emerged, depriving the oil exporter African countries associated with this country, of their main source of income.
The fact that the oil prices remain at these levels is not sustainable, considering both the producers dependent on oil exports, and the natural gas producers in the U.S. whose costs have risen to unsustainable levels. But it is clear that even if the effects of the outbreak are reduced, the rise in demand will not raise the oil prices too much. So the African countries, whose share of oil in total exports is over 80% on average, can be predicted to face a difficult and uncertain economic period.
The damage the global outbreak will do to the African economy in the medium term may be far more severe than its health impact. In the current situation, negative trends in stock markets, commodity prices, the value of national currencies and interest rates, as well as the blocking/reduction of international circulation are the main factors triggering a global economic crisis. The Western governments will try to overcome this crisis with large-scale aid programs for the sectors affected by the outbreak, but it is not possible for African countries that do not have the same resources to put such packages of measures in place. Still, some African countries, particularly those where the agricultural sector is thriving, are likely to overcome the crisis with relatively less harm.
Another negative development the outbreak will cause is the possibility that the “failed states” in conflict spirals can be “tested”. Indeed, as seen in the examples of Libya and Mali, the number of countries open to interventions may rise. More countries may fall into the grip of poverty and famine, their boundaries and identities may become subject to harsher differentiation, with an absence of social solidarity, and weaknesses in governmental authority. Because they have rich hydrocarbon and mineral resources, regional/global powers may want to intervene in these countries.
In conclusion, the spread of the pandemic will eventually stop, and the international system will find a balance, but most of the damage will be permanent, particularly for the African countries. The current crisis heavily hitting the economies on a local, regional and global scale, will also present opportunities at its final stage, but using these opportunities requires access to the capital. Considering that the capital can only be provided by outsourcing in most African countries, the situation does not seem pleasant at all. So the initiatives taken by the International Monetary Fund (IMF), World Bank and other international institutions for the continent are vital in this process.
Kaan Devecioglu is the deputy coordinator of Turkey’s Istanbul-based African Coordination and Training Center (AKEM.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
