At the 3i Africa Summit in Accra, Dr Mahamudu Bawumia, the vice-president, urged African leaders, Fintechs, particularly those on the continent, and financial institutions to seize the unique opportunities available in Africa to collaborate, innovate, and explore ways to positively influence the continent’s inhabitants

Addressing the theme “Digitising Economies In Africa: A Future Imperative” on, 14 May, 2024, Dr Bawumia highlighted the continent’s young and swiftly growing population, increasing internet and smartphone penetration amid decreasing internet costs, and the significant expansion of the financial services sector as key factors that enhance the role of fintechs in daily life, particularly in achieving financial inclusion.

“As fintech reaches a new level of maturity, African financial services are poised at a pivotal inflection point. With the momentum gained in recent years, several African nations stand on the brink of unlocking unprecedented opportunities, positioning themselves at the forefront of the next wave of fintech innovation and growth," stated Dr Bawumia.

“In this rapidly evolving landscape, agile fintech players are strategically positioning themselves to capture a slice of this flourishing market. As the fastest-growing startup industry in Africa, the success of fintech companies can be attributed to a confluence of favourable trends.

“These trends signify the immense market potential and further establish the transformative impact that fintech can have on financial inclusion and economic growth in Africa. As fintech continues to thrive amidst these favourable conditions, it is evident that the sector is well-positioned to reshape the future of finance in Africa, driving both innovation and inclusive growth.”

However, Dr Bawumia cautioned that this growth would not be easily achieved. He advised fintech startups in Africa to adopt a comprehensive strategy that focuses on innovation, demonstrates the vast market potential, and emphasizes the importance of regulatory compliance and transparency to attract and secure significant investment.

He advised, “Startups should continuously strive to develop groundbreaking solutions that address unique challenges faced by African consumers and businesses. They should articulate a clear vision of how their solutions cater to the needs of our growing market, backed by data-driven insights and market research.

“Crucially, building trust is paramount for attracting long-term investment. Compliance with regulatory requirements and maintaining transparency in operations are non-negotiables.

“Startups should proactively engage with regulatory authorities, participate in regulatory sandboxes where available, and establish robust governance and compliance frameworks. By doing so, they can instill confidence among investors and fostering a conducive investment environment for sustainable growth.

Referencing a UN report that forecasts Africa will make up 25% of the global population by 2050, Dr Bawumia emphasised that this demographic shift represents not just a theoretical market but also a growing technology market that can be addressed.

He noted, “Key trajectories such as digital payments, financial literacy initiatives, and AI-driven solutions are expected to shape the FinTech landscape in Africa. By focusing on these areas and investing in research and development, we can unlock new opportunities and drive sustainable growth.

Looking to the future, Dr Bawumia remarked, “Ultimately, we stand at a pivotal juncture in the evolution of the FinTech and tech sectors in Africa, where the choices we make today will profoundly influence our trajectory for years, if not decades, to come. It is imperative that we embrace responsible innovation, creating a balance between pushing technological boundaries and ensuring ethical considerations and regulatory compliance.

Dr Bawumia stressed the importance of collaboration among governments, financial institutions, tech startups, and investors to create synergies and promote collective growth.

“Equally important is our investment in nurturing talent and advancing technology. It is imperative we prioritise education, training and development, invest in cutting-edge technologies and infrastructure to empower our workforce lead and adapt to the rapid pace of change. In doing so, we can build a resilient and inclusive FinTech ecosystem that not only drives economic growth but also fosters financial inclusion and improves the lives of people across the globe,” concluded Dr Bawumia.

The World Bank unveiled an extensive analysis titled “Djibouti Digital Economy Diagnostic,” examining the digital economy’s status in Djibouti 

The study delves into the country’s digital challenges and prospects, underscoring the critical role of digital infrastructure, the urgency to enhance broadband access and affordability, and the essential digital competencies needed for socio-economic advancement. It underscores the significance of telecommunications, data infrastructure, digital platforms, financial services, and entrepreneurship as the digital economy’s core pillars. The report offers a snapshot of the present situation in these domains and proposes directions for their advancement.

Despite Djibouti’s strides in the digital realm, obstacles remain in fully harnessing its tech potential. Constraints in ICT investment and hurdles in digital service affordability and access are notable impediments. Yet, the creation of the Multisectoral Regulatory Authority of Djibouti and the Ministry of Digital Economy and Innovation (MDENI) signal the government’s resolve to surmount these challenges and steer digital progress.

Fatou Fall, the World Bank’s resident representative in Djibouti, remarked, “Djibouti has made significant progress in its digital infrastructure, but there is still room for improvement in terms of affordability, quality and access to digital services. Despite being one of the smallest countries in Africa in terms of size and population, Djibouti plays a crucial role in providing high-speed internet access to neighboring countries.”

The document advocates for a concerted effort from the government, the private sector, and civil society to confront the challenges and harness the opportunities for cultivating Djibouti’s digital economy. It stresses the importance of collaboration, capacity enhancement, and the formulation of explicit governance structures to catalyze digital evolution and realise long-term goals.

The report also touches on data governance and the growing utilisation of data to more deeply comprehend citizen needs and bolster public confidence.

Ilyas Moussa Dawaleh, Djibouti’s minister of economy and finance, responsible for Industry, stated, “The government is dedicated to tackling these challenges and propelling digital transformation forward. Our national flagship initiative, the ‘Smart Nation program,’ represents a move toward a more unified and comprehensive approach of digital transformation. We are devoted to capitalising on Digital Dividends, with a particular emphasis on creating job opportunities for our youth.”

Furthermore, the report accentuates the workforce’s digital skill imperative. It advocates for the establishment of all-encompassing training schemes for public servants and the enhancement of digital literacy among the broader populace, notably recent graduates and business founders.

Dr Reda Helal and group managing director – Processing, Africa and co-head group processing, Network International, and Benjamin Mutimura, CEO, I&M Bank (Rwanda) Plc, has highlighted Rwanda’s journey towards financial inclusion through digital payments, mobile wallets, and strategic partnerships, aiming for full inclusion by 2024 

In the heart of Africa, Rwanda’s financial inclusion efforts are gaining traction as the nation’s institutions, businesses, and consumers increasingly adopt digital payment methods. These technological advancements are essential in extending financial services to a broader audience, offering the convenience of cashless transactions, and facilitating swift and secure exchanges.

Rwanda: Pioneering digital finance hub in Africa

Rwanda stands out as a fertile ground for digital finance, with a youthful demographic—69% under the age of 30—and one of the highest population densities on the continent. The country boasts an impressive 87% mobile penetration rate, and the mobile payment sector saw a staggering 450% growth during the pandemic. In 2022 alone, mobile payment channels processed 310 million transactions, with a significant 41% increase in transaction value reported in November, from RWF 4.7 trillion (US$3.6bn) to RWF 6.6 trillion (US$5bn). Rwanda is ambitiously working towards complete financial inclusion by 2024.

The nation’s strategic plans, Vision 2050 and the National Strategy for Transformation 2017–2024, aim to position Rwanda as a central hub for financial services within Africa. The burgeoning fintech industry is key to this vision, promoting the shift towards digital payments and aiding in the quest for financial inclusion.

A recent study by Access to Finance Rwanda revealed a critical challenge: despite the financial sector’s rich data production, only a select few are leveraging this data effectively. This lack of a data-centric approach is a significant obstacle, as it prevents a deeper understanding of customer profiles and needs, optimisation of business operations, and the ability to forecast outcomes.

In Rwanda’s dynamic market, contactless payments and mobile wallets are becoming increasingly important. They offer consumers numerous advantages, including speed, convenience, and enhanced security.

The strategic alliance between Network International and I&M Bank is set to strengthen the bank’s digital-first strategy and its leadership in Rwanda’s market. This partnership will introduce an array of payment products and services, such as card hosting and processing, backed by strong security measures and an advanced API gateway. These offerings will enrich customer experiences with data and analytics, finely-tuned loyalty programs, and tokenisation, among other innovations.

As the global trend shifts towards contactless payments and digital wallets, Rwanda is witnessing the transformative impact of services like tokenisation and data analytics on commerce and payment systems. These innovations are integrating more citizens into the formal financial framework, paving the way for Rwanda to emerge as a significant financial services hub in the region, with banking standards that match international benchmarks.

Embracing cutting-edge technology in digital banking is crucial for realising genuine financial inclusion. The World Bank’s Rwanda Economic Update underscores the potential for financial services to enhance financial inclusion through innovation. While challenges such as the digital divide, infrastructural shortcomings, and financial literacy gaps remain, the report advises policymakers to strengthen regulatory frameworks, upgrade financial and digital infrastructure, and increase government support to nurture a digital-friendly ecosystem.

As Rwanda strides towards its 2024 financial inclusion goal, the dissemination of knowledge will be instrumental in establishing a digital payment culture that is inclusive and robust.