Nigeria must tap opportunities in Africa's B2B payments

Yele Oyekola is the co-founder and CEO of Duplo, a fintech company in Nigeria which helps businesses manage their financial and payment operations in Africa. In this interview, he tells Ifeoluwa Adebayo how business-to-business payment can foster intra-African trade in Nigeria.

Duplo released the third edition of its B2B payments report in August 2024. The report says that Nigeria is among the big six trade exporting nations in Africa. Can you explain the ranking and how intra-African trade has helped Nigerian businesses over the years?

Nigeria ranked 4th (4 percent), behind countries like South Africa (27 percent), Egypt (10 percent), Morocco (10 percent), Tunisia (5 percent), DRC (5 percent) and Ghana (5 percent).

Both extra and intra-African trade has played a significant role in helping Nigerian businesses grow and diversify across the years by providing market expansion opportunities, especially through regional economic communities like the Economic Community of West African States (ECOWAS).

Intra-African trade has also helped Nigerian businesses integrate into regional supply chains by sourcing raw materials and other goods from other African countries and reducing our dependence on global markets.

Increased trade within Africa has also created avenues for more cross-border partnerships and joint ventures between Nigerian businesses and those in other African countries, leading to knowledge and skill sharing.

With regard to extra-African trade, companies within the oil and gas, manufacturing, and agricultural sectors have benefited significantly from a wider customer base.

Extra-African trade has also encouraged the diversification of export goods and services such as agricultural products (cocoa, sesame seeds), solid minerals, and even digital services, reducing Nigeria’s over-reliance on oil.

It has also helped increase access to foreign investment and technology which, in turn, has helped boost and strengthen underdeveloped sectors such as manufacturing, agro-processing, and textiles.

Despite the significance of B2B payments on the global economy, African countries face several challenges such as high transaction costs, lack of financial infrastructure, and so on. How can these challenges in cross-border B2B payment be overcome to sustain the future of African trade?

To sustain the future of African trade, resolving the challenges in cross-border B2B payments is essential. While the African trade market is poised for significant growth, businesses continue to face several obstacles.

We must reduce transaction costs. High transaction costs are a major barrier to efficient cross-border B2B payments in Africa. The fees associated with transferring money between countries—especially when converting currencies—can erode profit margins and make it harder for businesses to operate across borders.

We need to address currency volatility. Currency fluctuations are a significant risk factor in cross-border payments, often leading to unpredictable costs for businesses.

There is a need for regulatory harmonisation and standardisation. One of the most significant barriers to cross-border trade in Africa is the lack of regulatory alignment between different countries and regional blocs. Each nation has its own financial regulations, customs procedures, and standards, which can complicate cross-border transactions.

There is also a need to increase access to trade financing. Many African businesses, particularly small and medium-sized enterprises (SMEs), struggle to secure the financing necessary to engage in cross-border trade. Expanding access to credit and financial services is essential for sustaining future trade.