You need to active Javascript on your
BusinessDay
Nigeria's leading finance and market intelligence news report.

Growth of African businesses requires leveraging booming mobile, internet technologies

Digital payments are now, more than ever, the key to unlocking business growth in Africa, and African countries have put in place rigorous regulations to ensure secure transactions. This is leading to innovative approaches to living and shopping.

This means that digital payment platforms are becoming significantly safer than cash, and are increasingly being leveraged by governments and businesses to improve customer access to resources and services.

Digital payments are riding on mobile and internet technologies to put a bank in the pocket of every African that can afford a subscriber identification module (SIM) connection.

They equalise engagements while improving transparency and control over finances and business. Digital payments also empower the small and medium enterprises (SMEs), giving them greater scope for inclusion and access to customers and markets.

According to the GSMA 2019 Mobile Money Report (https://bit.ly/31OA5SM), there are more than one billion mobile money accounts in Africa that account for 57 percent of mobile money transaction values. Over the next five years, also according to the GSMA (https://bit.ly/35J4XoT), it is expected that 84 percent of Africans will have access to a SIM connection and that mobile payments will play a critical role in empowering individuals, businesses and the economy as a whole.

Africa has undergone a remarkable journey over the past 30 years. It has not only leapfrogged legacy technology and systems into a more relevant future, but has done so in spite of challenging circumstances. This is particularly relevant when it comes to mobile – technology, connectivity, and financial inclusion.

In Africa, digital payments are more than just keys to open the doorways of financial inclusion, they are increasingly the steps that will take the continent out of recession and into a more dynamic and inventive future. This view is echoed by the investments made by the World Bank and organisations such as SWIFT and Bluecode Africa; programmes such as the African Continental Free Trade Area (AfCFTA), and the International Monetary Fund [IMF (https://bit.ly/3kAECQ3)].

Investments that include cross-border payment platforms increased commerce capacity, cost management, digital innovation, and the empowerment of the individual, micro-enterprise and small and medium enterprises.

“It is time to educate businesses and individuals as to the costs and risks of cash as opposed to digital. To showcase the value of digital payments in not just opening up new markets and opportunities, but in providing tighter cash flow control at a better price point than cash,” says Murray Gardiner, MD, Bluecode Africa, a mobile payment solution that combines cashless payments via smartphones.

Nevertheless, some statistics that give uncertainty around Africa are not ones that make the continent proud. The World Bank has estimated that Africa could potentially hold 90 percent of the global poor population by 2030 (https://bloom.bg/2HDICAP) and has recently cut its economic growth (https://bit.ly/34xTWqY) predictions to between -2.10 percent and -5.10 percent in 2020 from the 2.40 percent of 2019.

The situation has been significantly worsened by the global pandemic, as the continent hits its first recession in 25 years. However, this is not the picture that defines a continent that has long defied expectations and predictions.

Africa’s social and economic fundamentals still offer opportunities. That is, a young population, a growing consumer market, and the rapid movement towards mobile inclusion and connectivity are shifting the conversation. Africa is poised on the cusp of transformation introduced by mobile and internet technology.

Whatsapp mobile

Get real time updates directly on you device, subscribe now.