Digital inclusion now for refugees in Uganda

By Ryan Anderson

I have visited the refugee settlements seven times over the last six months, often spending entire weeks on each trip.

Field visits are an opportunity to hear first-hand from the people the United Nations World Food Programme (WFP) serves.

But my travels have also been part and parcel of our pre-occupation with COVID-19 and the race to adapt to prevent its spread among the 1.26 million refugees we assist monthly.

In addition, more than half of WFP's staff in Uganda work in the refugee operation and must remain safe in the cramped living spaces they rent in or around settlements.

One issue my team and I have long focused on, but more so now in the context of COVID-19, is how WFP can maximize the socio-economic impact of humanitarian assistance in support of Uganda's development goals.

Our priority going forward must be to escalate gradually and steadily cash-based assistance in collaboration with the UN refugee agency, UNHCR, and the Uganda government while promoting a broader financial inclusion strategy. Financial inclusion means having access to and using a broad range of quality and affordable financial services for one's financial security.

WFP's cash or in-kind food is the largest resource transfer refugees based in the settlements receive on a regular basis in Uganda.

Even at 70 per cent rations, donors have enabled us to inject roughly US$4 million per month into local economies in and around the settlements through transfers to 662,000 refugees.

Spending this cash is unrestricted, which gives refugees greater decision-making power compared to in-kind food.

Where markets are functional, WFP's cash in itself empowers refugees to buy food in local markets and to meet other essential needs according to their priorities without necessarily compromising the quality of their diets.

In the process, local agriculture and trade are stimulated.

A study by the University of California, Davis, in Rwamwanja refugee settlement in 2016 found that every dollar of WFP cash given to refugees created a spill-over of an additional US$1.50 in and around the settlement, mostly benefiting host communities.

Taking on a broader path of digital inclusion, however, will allow us to go further in boosting rural economic growth, placing the people we serve at the centre of our work, stopping COVID-19 and minimizing tensions between refugees and host communities.

Our impact will be greater, in fact, if we prioritize refugees opening of bank accounts and take digital financial services closer to them and other unbanked communities around rural settlements.

Digital financial inclusion is also a priority of UNHCR and the Bank of Uganda's national financial inclusion strategy.

Furthermore, it aligns with the on-going development of a national payment system - led by the Ministry of Gender, Labour and Social Development - which envisions the adoption of interoperable payment solutions to advance financial inclusion in the country.

A FinScopeUganda 2018 survey found that only 13 percent of refugees in Bidibidi settlement had access to formal credit, with most of them depending on low-capacity informal groups.

In leading financial service providers to places where they would not otherwise go, such as Bidibidi, WFP can contribute to stimulating competition.

We can attract private and public entities to develop tailored and affordable financial products for payments, savings, credit, even remittances, for marginalized people and small enterprises.

Increased economic integration leads to better social integration between refugees and the Ugandans who host them.

Moving from in-kind food to cash and, where possible, pure digital payments, therefore, is WFP's priority.

We are seeking to take agent banking from Nakivale, Oruchinga and Kyaka II to more settlements where it is feasible.

This is also because digital transfers allow humanitarian assistance to be provided with minimum human contact and in a flexible manner, especially during COVID-19.

Another thing we must do, if we receive funding, is to ensure refugees are informed and enabled to benefit from emerging technologies.

We already had planned financial literacy training, yet COVID-19 brought about an increased sense of urgency to do so.

The pandemic forced us to fast-track a transition to digitized systems that also maximized the benefits of cash.

That means there are now many more refugees receiving their food assistance in the form of cash transfers and therefore need to adapt.

The importance of financial knowledge was glaring in May when I visited Rwamwanja in lush western Uganda. I listened in on two groups of refugees. One that had recently participated in a WFP-supported financial literacy pilot in Kyempango village and another that had not, at "Base Camp".

The difference in what I heard could not have been greater: One group was worried about food price fluctuations and how they would manage with a reduced WFP transfer over a two-month period.

The other knew how to read the market and said that even if they got a four-months transfer in advance, they were confident in their ability to manage it across the entire period.

One refugee said that before she received the training, she used almost all her cash from WFP to clear her debts on the way back home. "But now," said Madeleine Kazanwenimana from the Democratic Republic of Congo, "I save a little bit to grow my goat business and I am able to feed my family of 10 every day." Her family includes her disabled father.

Financial/digital literacy is an entry point to empowering women to participate in important decision- making at home.

It also enables WFP to better position refugees to engage with retailers or wholesalers in strengthening local market systems.

Working with district governments to strengthen local markets so they can absorb WFP's monthly cash injection while meeting the food and nutrition needs of both refugees and Ugandan nationals is another critical piece in our wider inclusion agenda.

WFP is thankful to donors who set us on this important path: Canada, Denmark, the European Commission, Ireland, the Republic of Korea, the United Kingdom and the United States of America.

The writer is the Deputy Country Director and programmes manager at WFP.