The Kenyan President William Ruto has said Kenya is committed to attracting quality foreign investments in the country.
He noted that the Government is pursuing ambitious reforms that will turn Kenya into a regional business hub.
The Head of State cited the installation of a pro-business tax regime as one of the means through which the Government aims to courting foreign investments.
“A more investor-friendly environment will allow businesses to innovate, thrive and create more economic opportunities for the people,” he said.
Presdient Ruto
He made the remarks on Friday during an investment forum and engagement at the Silicon Valley in San Francisco, United States.
President Ruto said Kenya had upgraded its data protection regulations in line with the Global Cross-Border Private Rules framework, was secure, home to green energy and good infrastructure.
“We have also eliminated VAT on exported services and abolished tax on stock-based compensation for employees of start-ups.”
He assured global firms of Kenya’s ample supply of energetic, gifted and skilled human capital “who are responsible for driving the country’s tech sector”.
“We continue to develop a workforce fit for the changing world.”
The Head of State pointed out that Kenya is also supporting entrepreneurs through the creation of a digital hub in every ward.
“This will offer learning and innovation to more than one million talents. This incredible talent pool will serve your businesses.”
US Ambassador to Kenya Meg Whitman, British Robinson, Coordinator Prosper Africa, several investors and captains of industry attended the forum.
Ambassador Whitman said Kenya is the most stable democracy in East Africa, regional logistics and leading financial hub, gateway to the East African market, key destination for foreign direct investment and venture capital.
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 Chip designer ARM Holdings secured a US$54.5-billion valuation in its initial public offering (IPO) on Wednesday, seven years after its owner SoftBank Group took the company private for $32-billion.
The IPO represents a climb-down from the $64-billion valuation at which SoftBank last month acquired the 25% stake it did not already own in the company from the $100-billion Vision Fund it manages.
Yet even with this lower valuation, SoftBank fares better than its $40-billion deal to sell ARM to Nvidia, which it abandoned last year amid opposition from antitrust regulators.
ARM priced its IPO at $51/share, at the top of its indicated range, raising $4.9-billion for SoftBank
ARM priced its IPO at $51/share, at the top of its indicated range, raising $4.9-billion for SoftBank based on 95.5 million shares sold, the company said on Wednesday. ARM’s shares are scheduled to start trading in New York on Thursday.
ARM has already signed up many of its major clients as cornerstone investors in its IPO, including Apple, Nvidia, Alphabet, AMD, Intel and Samsung Electronics.
Arm launched its IPO marketing efforts last week, seeking to convince investors it has growth ahead of it, beyond the mobile phone market, which it dominates with a 99% share.
Weak mobile demand during a global economic slowdown has caused ARM’s revenue to stagnate. Overall sales totalled $2.68-billion in the 12 months to the end of March, compared to $2.7-billion in the prior period.
Cloud opportunity
ARM told potential investors in New York last Thursday that the cloud computing market, of which it has only a 10% share and therefore more room to expand, is expected to grow at an annual rate of 17% through to 2025, partly thanks to advances in artificial intelligence. The automotive market, of which it commands 41%, is forecast to expand by 16%, compared with just 6% growth expected for the mobile market.
ARM also told investors its royalty fees, which account for most of its revenue, were accumulating since it started collecting them in the early 1990s. Royalty revenue came in at $1.68-billion at the latest fiscal year, up from $1.56-billion a year before.
An area of scrutiny for investors has been ARM’s exposure to China, given geopolitical tensions with the US that have led to a race to secure chip supplies. Sales in China contributed 24.5% of ARM’s $2.68-billion revenue in fiscal 2023.
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 7th Korea-Africa Economic Cooperation (KOAFEC) Ministerial Conference opened in Korea’s second-largest city, Busan, on Wednesday with a strong call for additional resources to help African countries achieve universal access to energy and transform the continent into the breadbasket of the world.
The conference is taking place at a time when Africa is facing a plethora of challenges. Nearly 600 million people on the continent have no access to electricity. In addition, despite rapid growth across the continent, hunger is still pervasive in some countries, affecting some 283 million people. The Russia-Ukraine war has exacerbated this figure. So also has the lingering effects of the Covid-19 pandemic and climate change.
This is why Korea and African nations, under the aegis of KOAFEC, have agreed to deepen their cooperation with much more emphasis on mutually beneficial investment.
The African Development Bank Group and the Ministry of Economy and Finance of the Republic of Korea are co-hosting the three-day conference under the theme “Embracing a Sustainable Future: Just Energy Transition and Agricultural Transformation in Africa.” This embraces these two critical development priorities for Africa.
Korea’s Deputy Prime Minister and Minister of Economy and Finance, Kyungho Choo, underlined the crucial role that Korea and Africa must play. He highlighted Korea’s strength in high-tech industry and innovative technology. He also pointed to the great many opportunities that Africa offered as the world’s future market and industrial base with a vibrant young population.
“Together, our two worlds can become the most solid rock of solidarity,” he told the meeting, stressing the need for Africa and Korea to strengthen cooperation.
In his opening remarks, African Development Bank Group President Akinwumi Adesina urged delegates to seize the conference as a critical opportunity to galvanise support for several objectives: achieving universal energy access in Africa, advancing a just energy transition and transforming the African continent into the breadbasket of the world.
“Doing so will require additional resources,” Adesina said. He said the anticipated reallocation of the International Monetary Fund Special Drawing Rights (SDRs) to the African Development Bank was the key to attracting additional resources to develop Africa.
The African Development Bank chief urged Korea to join other countries that have expressed strong interest in reallocating SDRs to the African Development Bank Group.
“This will be a game changer for Africa’s development,” Adesina declared.
Choo summarised Korea’s priority areas for support to Africa as “ABC”—agriculture, bio-health, and climate change, as well as energy transition. He said Korea also planned to significantly increase its official development assistance.
Choo said that in cooperation with the African Development Bank, Korea supported energy projects for Africa’s sustainable development. “We are also working to support Africa’s growth as outlined in the African Development Bank’s High 5s development priorities,” Choo said. “As a true partner, Korea will continue to support Africa’s development,” he said.
Adesina described the KOAFEC conference as a good opportunity to discuss progress on relations between Korea and Africa, development challenges and opportunities in Africa, and a chance for all parties to continue to work together to accelerate the growth and development of Africa.
“Africa must be a solution to feeding the world, as it has 65% of the uncultivated arable land left in the world,” he told delegates, adding: “What Africa does with agriculture will therefore determine the future of food in the world.”
Adesina commended the Korean government for its K-Rice Belt initiative, which will support eight African countries in producing 30 million tons of rice.
The initiative aligns with the African Development Bank’s Feed Africa strategy and the outcome of Dakar 2 Food Summit early this year. The Bank is intent on Africa achieving food self-sufficiency within five years.
The K-Rice belt project also has parallels with the African Development Bank’s flagship Technologies for African Agricultural Transformation (TAAT) programme. The TAAT Rice Compact continues to collaborate with the Korea-Africa Food and Agriculture Cooperation Initiative (KAFACI) through AfricaRice. TAAT supports KAFACI’s network of 13 African countries through workshops, joint planning, and regular interaction.
The African Development Bank has launched a $650 million rice programme to support 15 African countries in their quest to produce 53 million tons of rice by 2025.
“This presents an excellent opportunity for Korea to work together with the African Development Bank on a pan-African rice production initiative,” the Bank president said.
The African Development Bank is preparing a regional operation to finance the Regional Rice Resilient Value Chains Development (REWARD) programme in West Africa. Through this programme, the Bank will provide $650 million to the 15-member countries of the Economic Community of West African States (ECOWAS).
REWARD targets double cropping and yields on 750,000 hectares of irrigated land. One million rice farmers will benefit, and 30% of these farmers are women. The initiative will push total paddy production to 10.5 million tons per year or 53 million tons by the end of the five-year programme in 2028.
The African Development Bank is to work closely with K-Rice Belt on this programme.
Korea has been a strong and consistent supporter of the African Development Bank Group. The country strongly supported the Bank’s general capital increase in 2019.
Korea also pledged $105 million to the 16th replenishment of the African Development Fund; the highest amount ever pledged to the Fund.
The Korea Trust Fund and the $600 million Korea-Africa Energy Investment Framework will support African countries in strengthening human capacity and developing their energy sectors.
Adesina noted that for African countries to collectively meet the Sustainable Development Goals by 2030, the continent required an investment of $2.3 trillion. He highlighted limited access to electricity as a significant hurdle, pointing out that this was a commodity still beyond the reach of nearly 600 million people.
He said much progress had been made since the African Development Bank launched its New Deal on Energy for Africa in 2016. He explained that while the percentage of those with access to electricity had since increased from 35% to 56%, there was still much to do.
“To achieve universal access to electricity, we must add 90 million people annually by 2030. We must also add 130 million people annually to achieve universal access to clean cooking energy,” Adesina said.
He said Africa had enormous renewable energy potential, including 11 terawatts of solar—the highest in the world—of which only one percent was used. Adesina also said the African Development Bank invested heavily in renewable energy, with the share of renewable energy in its power generation portfolio now standing at 87%.
The Bank president emphasised, however, that it would be impossible to provide universal access to electricity for Africa relying only on renewables because of their high intermittent and variability, which negatively affected reliability for industrial use.
“As we think of Just Energy Transition, Africa must not be denied the opportunity to use its natural gas, which it now has in abundance from new discoveries. Doing so will not add to climate crisis. Rather, it will reduce emissions in Africa,” Adesina said.
He told the audience that the African Development Bank was participating in the Just Energy Transition Partnerships in South Africa and Senegal ($2.5 billion) with the European Union, the United States, the United Kingdom, Germany, and France.
He explained that the Bank would support the South African Just Energy Partnerships through a $1 billion guarantee facility from the United Kingdom, adding that the institution also supported efforts to develop more bankable projects through its New Partnership for Africa’s Development (NEPAD) Infrastructure Project Preparation Facility and Africa50.
The African Development Bank chief concluded: “Africa’s future is bright. And it will be brighter still with a strong partnership with South Korea. Let us accelerate Africa’s growth and development together. Let us succeed together.”
Dr. Hwang-yong Kim, Director General of Technology Cooperation Bureau, Korea Rural Developent Administration, indicated there was every reason for confidence that African countries could emulate Korea’s successful development trajectory. He explained that in the 1960s, after the Korean War, the country was one of the poorest nations in the world—Korea even received assistance from some African countries, said earlier Dr Adesina. Kim noted that through its transformative agriculture, Korea has since become one of the largest economies in the world.
The 7th KOAFEC Ministerial Conference brings together many important stakeholders in Africa’s development. This includes 33 African finance ministers and African Development Bank executive directors representing African member countries, African ambassadors, heads of pan-African institutions, and various non-governmental organisations, as well as African CEOs and Korean private sector leaders.
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
Rain shareholder African Rainbow Capital Investments has valued the wireless broadband upstart at R22.2-billion. Rain shareholder African Rainbow Capital (ARC) Investments has valued the wireless broadband upstart at R22.2-billion, nearly twice Telkom’s current market capitalisation.
Rain, which makes up 27.6% of ARC’s ARC Fund portfolio (it also includes its stake in TymeBank), raised the value it places in its 20.3% stake in the company by R881-million over the past year to R4.5-billion, valuing Rain at R22.2-billion, an increase of 24.2% in just 12 months.
Rain
Telkom, which is a much larger business than Rain, had a market value on Thursday morning on the JSE of less than R12-billion. Rain is expected to achieve Ebitda of more than R2.5-billion for the year ending February 2024
ARC’s decision to increase its valuation of Rain is largely due to the business “progressing beyond the period of significant net-cash outflow as well as the recent acquisition of additional spectrum”.
“Rain launched its 4G mobile voice offering together with its new 5G home product, rainOne, during May 2023. Since launch, there has been strong interest in rainOne and Rain continues to receive positive feedback from new and existing customers,” it said.
It said the business is “tracking well” against budgets, with Rain expected to achieve Ebitda – earnings before interest, tax, depreciation and amortisation, a measure of operating profit – of more than R2.5-billion for the year ending February 2024 (after taking into account IFRS 16 accounting adjustments, “as is industry practice”).
“Rain continues its ambitious roll-out and marketing strategy to cover more towns across the country and will continue densifying coverage in all major metros,” ARC said.
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
In response to the devastation caused by the recent earthquake in Morocco, Binance Charity will airdrop up to $3 million in BNB to Binance users identified as living in the areas affected by the tragedy.
Identification of the users will be based on Proof of Address (POA) completed before 9 September 2023 in Marrakesh-Safi Province, which has suffered the most significant impact. Users who have completed POA before this date in the Marrakesh-Safi Province area will each receive $100 in BNB directly in your Binance account.
We recognize that many users in the affected area may not have yet completed POA. Therefore, for any existing user who completes POA after 9 September 2023 and before 30 September 2023, we will donate $25 in BNB directly to your Binance account.
Changpeng Zhao, CEO of Binance
Furthermore, for our active transacting users across Morocco who are not in the affected area, we will airdrop $10 in BNB to each of them. We expect our efforts will reach around 70,000 Binance users living in Morocco. Our funds will reach our users starting 12th September 2023.
In the aftermath of natural disasters, people often lose access to traditional banking at the exact moment when extra funds are needed to help cover medical supplies, food and other essential needs.
Crypto transfers are now increasingly being used to deliver financial aid to disaster victims as they provide fast, low-cost, borderless and transparent transactions.
Binance founder and CEO CZ said: “The impact of the earthquake on the Moroccan people is devastating. We hope we can bring some support to those affected. For Moroccan users who receive these donations but are unimpacted by the earthquake, we ask them to pass the funds on to those most in need.”
Binance Charity has also launched a public donation address for anyone to donate. For everything we receive on this address, we will donate the total crypto amount to an authorized NGO (to be named soon) to help people in need. Donations to the Emergency Earthquake Appeal will be accepted in BNB, BTC, ETH, USDC, USDT, or BUSD.
In these difficult times, Binance stands by our users and we will continue to work on additional ways to help our community in Morocco.
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
Liquid Intelligent Technologies, a subsidiary of Cassava Technologies, a pan-African technology group, announces the launch of two new fully redundant terrestrial routes – Kenya to Ethiopia and Zambia to Malawi. This significant achievement will allow for greater efficiency and reliable regional connectivity, both key to the economic development of these countries.
Spanning over 1000 km, the fibre link between Kenya and Ethiopia offers businesses in Ethiopia access to data centres and cloud in Nairobi, Kenya, ensuring that data doesn’t leave the continent. In addition, this link is further supported by the cross-border 711 km link between Zambia and Malawi, providing a direct and reliable connection to content caches and data centres in South Africa.
Nic Rudnick, Deputy Chairman, Liquid Intelligent Technologies
According to Adil El Youssefi- CEO Rest of Africa at Liquid Intelligent Technologies, “Kenyan and Ethiopian businesses are rapidly adopting digital technologies, and this new link will enable trade and investment between these two great nations in our region. For Liquid Kenya, we see this growing demand being catalysed by the Kenya Kwanza Government’s Digital Superhighway Initiative (https://apo-opa.info/3Zj5lG8), and this 1000 km of newly lit fibre is our first contribution to the private sector investment into this flagship project”.
In partnership with the Kenya Electricity Transmission Company (KETRACO) and Ethiopia Electric Power (EEP), Liquid’s new link connects Nairobi and Mega, a town in southern Ethiopia, and provides a capacity of four terabytes per second. Complementing the existing terrestrial routes across this border, the Kenya-Ethiopia route will now have carrier-grade connectivity, which serves to rapidly expand data traffic on this important route. As Liquid doubles down on its investment in Ethiopia, it expands on its long-standing commitment to ignite transformation, job creation and growth on the continent.
“All initiatives undertaken by businesses under Cassava Technologies work towards realising our vision of a digitally connected future that leaves no African behind. The completion of these fibre links is yet another milestone achieved by Liquid as it continues to lay the foundations of economic growth through increased access to high-speed connectivity,” says Hardy Pemhiwa, President and Group CEO of Cassava Technologies.
The fibre network will provide Kenya and Ethiopia with measurable benefits in terms of connectivity performance and accessibility as it connects the underserved towns of Suswa, Sereolipi, Ndaragwa and Marsabit, as well as Nairobi and Mega.
Liquid aims to catalyse African growth through its intelligent fibre backbone, providing cost-effective, regional internet connectivity that enhances digital transformation. These milestones foster richer economic and technological ties across countries and the continent, helping African companies and individuals realise their potential within the digital economy on a local and global scale.
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
Blue Label Telecoms wants to bring in a new strategic investor into Cell C as it seeks total control of the mobile operator in which it currently holds a 49.5% stake. That’s according to Blue Label co-CEO Brett Levy, who was speaking to TechCentral in a wide-ranging interview on the TechCentral Show (TCS) to be published on Tuesday afternoon.
Levy’s comments follow the announcement last week that Blue Label will apply to the Competition Commission and communications regulator Icasa to take its shareholding in Cell C beyond 50%, a move that will give it control of the company for the first time. It could be a bank or a retailer or another network, but it will be a strategic partner.
In the TechCentral interview, Levy – who is joined on the show by his brother, co-CEO Mark Levy – said in response to a question about the future of Cell C: “Cell C will have a ‘big brother’. Whoever that may, that is coming – another investor, for sure.
Blue Label co-CEO Brett Levy
“And it will be a value-adding investor. It will not be a money person; it will be someone who adds value in strategy,” he said. “It could be a bank or a retailer or another network, but it will be a strategic partner. And I don’t see that in five years, I see that in the next two to three years.”
Levy described Cell C as an “important cog” in the Blue Label machine. But, he said, Cell C “needs a ‘bigger bigger brother’ than Blue Label… We thought we were the big brother, [but] we became the little brother [and] now we need big brother. It will be a nice combination with us in it, and someone else.”
The move to bring in a new strategic investor comes a year after Blue Label led a second recapitalisation of Cell C following its initial investment six years ago of R5.5-billion in the company, which bought it a 45% stake. Blue later wrote down the carrying value of that stake to nil after a turnaround strategy led by a previous Cell C management team did not deliver the expected results.
Levy said the strategy for Cell C this time is very different, with a far greater chance of success. Cell C no longer operates its own radio access network, for example, relying instead on the networks of MTN (for prepaid) and Vodacom (for contract customers), he said. This has reduced its costs, and meant it no longer has to try to compete with the capital expenditure of its bigger rivals.
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
There are indications that some retail stores in South Africa are going cashless with the launching of Shoprite Group’s first cashless store in Durbanville, Cape Town late last month, in what market watchers say may be the start of a trend. The move by Shoprite Group is followed with the launch of another technologically advanced clothing store in Canal Walk earlier this year.
This is part of worldwide trends that seek to improve customer experience through digitisation, with the removal of cash from the ecosystem being a key principle. Does this mean that cashless stores are the future of retail in South Africa – and are consumers ready to accept the idea of ditching cash for cards and other payment methods?
Shoprite Group opened its first Uniq clothing store in Canal Walk on 30 March, becoming the first clothing retailer in South Africa to offer self-service checkout. There are nine standalone Uniq stores across the country. The group also opened a new franchise brand called OK Urban in Durbanville, Cape Town, late last month. The OK Urban store is cashless, too.
Mobile Payment
Digitisation of retail stores, with trends towards cashier-less checkout facilities and cashless payment options, presents opportunities for retailers to improve customer experience and operational efficiency, while averting cash-associated risk. However, numerous challenges hinder the progression towards fully digital in-store shopping environments, forcing retailers to balance innovative ideals with the practical realities on the ground.
“I think both retailers and consumers would prefer a cashless society, from a risk-reduction perspective,” said Chris Gilmour, investment analyst at Gilmour Research. “Consumers need only carry a debit card rather than cash, and this is Pin-protected, while retailers prefer debit card transactions because it means they have to keep less cash on the premises.”
However, Gilmour said, going cashier-less is a highly sensitive subject for the trade unions, which see this as a way of reducing staff numbers. “At first glance, it probably is.”
In the South African context, tensions between an impending digital future and the inhibitive realities of the present are exemplified by the differences in approach between mega-retailers Shoprite and Pick n Pay Holdings. While both have a strategic mix of digital offerings, Shoprite is leading the charge towards fully digitised storefronts, while Pick n Pay sees the move as potentially antagonising to the country’s large unbanked or underbanked consumer base.
Shoprite’s new offerings, for instance, are presented as responses to “meet its customers’ ever-changing needs”. The use of separate brand identities to demarcate its fully digitised storefronts from the more traditional Shoprite, Checkers and Usave brands, however, suggest an awareness of the need to continue to cater to a cash-reliant consumer base. Another vital concern contradicting its digital approach is protecting the group’s growing, cash-focused Money Market business, which, it says, “offers a comprehensive range of financial services and products to the group’s customers through dedicated in-store service counters”.
Shoprite’s dual-market go-to-market strategy highlights the impact that exogenous factors relating to income inequality have on digital citizenship. Device affordability, internet access and education influence market dynamics, conforming business strategy to the realities of operating in a country with the highest Gini coefficient in the world. While Shoprite’s perspective is more future-focused, Pick n Pay emphasises the importance of catering to the unbanked.
“While there are substantial benefits to moving to a cashless society, with security being top of mind, the transition to a cashless retail environment in South Africa faces barriers as many economically active customers remain unbanked,” said Deven Moodley, executive head for Pick n Pay’s value-added services, financial services and mobile division.
“Our goal is to drive financial inclusion for all our customers, so going cashless would create financial exclusion for those who rely on cash to access goods and services. Instead of focusing on going cashless, we are introducing more ways for our customers to pay for their goods and services. This includes the likes of Mobicred and PayJustNow, or working with partners like Absa, Tyme, Capitec, RCS and others to offer more services for customers, that bring about payment innovation in our stores, for both cash and cashless transactions,” said Moodley.
Just last week, armed robbers entered a Pick n Pay in Kensington, Johannesburg, making off with customers’ belongings as well as an “undisclosed amount of money”. A similar incident took place at the Brits Pick n Pay in July. While nobody was killed in these incidents, this is not always the case during armed robberies. Curiously, Shoprite’s first cashier-less store, a concept called Checkers Rush, was launched in 2021, three years after the retailer suffered a record 489 armed robberies in a single year. Catering to current consumer needs, it seems, must be balanced with judicious risk management.
With less than a year in operation, it is as yet unclear just how significant Shoprite’s cashless and cashier-less innovations are on customer experience. Of more interest perhaps, may be the impact that cashless environments have on retail crime statistics. Again, it is only with time that real patterns can emerge. But insight from the UK may reveal a glimpse of South Africa’s retail future.
“Most people in British supermarkets still use the normal cashier-operated tills. However, at Heathrow airport in London, all the shops are completely self-service apart from the boutiques. And then we have Amazon Fresh and their lookalike stores. These stores have cameras everywhere and you swipe your card when you enter, fill the trolley or basket, and walk out. This really is the future and Shoprite is investigating its use in South Africa,” Gilmour said.
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
Banking in Africa is on the brink of its next transformative era, writes Mpumi Makhubu-Mukogo.
Africa has demonstrated its propensity for embracing new technologies, particularly in the financial services sector. With about eight in 10 people on the continent owning mobile phones and more than 570 million people online in 2022, up 470% from 2010, access to information and services has become easier.
Now more than ever, digital access to financial services in Africa is imminent. However, we must solve the infrastructure challenges, collaborate more and strengthen institutional connections.
There is a tremendous opportunity to apply lessons learnt from mobile money adoption.
To remain relevant, banks and central banks must evolve to embrace and adopt the opportunities presented by new technologies such as blockchain, mobile money and cloud computing. However, new opportunities also come with risks, which require updated regulations that are effective but do not stunt innovation, especially those that are being driven by fintech start-ups. Fintechs should not be seen as threats to the banks, but as partners that could help established players meet the needs of customers.
On a continent where physical cash still accounts for more than 70% of transactions, there is a tremendous opportunity to apply lessons learnt from mobile money adoption and get more people into the banking economy in a safe and accessible way.
Mpumi Makhubu-Mukogo, is global markets digital head at Standard Bank
Mobile money is among the fastest-growing payment methods in Africa, and we can make the next exponential step by leveraging it beyond just payments or peer-to-peer transactions. Africa has a young, digital-native and rapidly urbanising population. The continent is a hotbed of start-ups and fintechs helping solve financial challenges, and many countries and territories are easing regulations to speed up technological banking adoption.
Role of banks
We need to embrace technology as we always have, while learning from other early adopters to produce the best new-age solutions for our customers. Mobile money solutions have vast potential to evolve into more complete banking products, including lending, saving and investing – and banks must lead that charge.
There is arguably no market in which the growth of – and demand for – more inclusive and accessible financial services is more prevalent than in Africa. Our rapid commercial growth and globalisation over the past decade have made more inclusive financial services even more critical. The growth of SMEs and entrepreneurship, and accompanying innovation in fintech – particularly blockchain technology – has the potential to drive the improvement of financial infrastructure across the board.
Another key area that needs development is efficient and lower-cost cross-border payments to facilitate intra-African trade as well as trade outside the continent. One solution which seeks to address the intra-Africa need is the pan-African payment and settlement system, or PAPSS, which enables cross-border instant payments across African countries, without the complexity, time and money it takes to make these payments using traditional banking methods.
With PAPSS, participants do not need to first convert local currency to a hard currency like the US dollar as an expensive, time-consuming intermediary step when making a payment to a participant in another African country. Wide adoption of PAPSS across the continent will revolutionise payments and contribute towards economic growth. For this reason, Standard Bank South Africa has signed a memorandum of understanding to provide settlement of these transactions. It also aims to be a participant bank in most of the markets it operates in.
Meanwhile, several African countries have seen a rapid uptake of cryptocurrencies as a means to access more efficient payment rails provided by blockchain networks and yield returns on income with assets such as bitcoin and stablecoins, which are designed to maintain stable value through being pegged to an asset such as the US dollar.
Because of the volatility of cryptocurrencies, the real potential for increased financial inclusion in Africa lies in the blockchain infrastructure that underpins them, rather than in the currencies themselves – stablecoins aside. The distributed ledger system can instantly eliminate fraud and human error in transactions and foster transparency in financial records, which can enable the creation of corruption-resistant and robust welfare systems.
It can also provide mechanisms for fair and transparent microfinance and increased purchasing power to support the creation and growth of small enterprises that serve communities. Blockchain technology can kick-start new trade opportunities between nation states and give Africans the opportunity to take part in a technological revolution and form part of the decentralised economy.
Where does that leave traditional banking? It’s clear that the answer is not to compete with fintechs, but rather to use new technologies through participating in our own right, and via partnerships.
The distributed ledger system can instantly eliminate fraud and human error in transactions and foster transparency in financial records.
Digital banking solutions that will matter now and in the future are those built by not only leveraging emerging technology, but through collaboration between traditional incumbent banks, central bank regulators and fintechs in solving the challenges that inhibit access to financial services in and outside of Africa at true scale.
Ultimately, the aim is to contribute towards sustained economic growth and development in Africa, and we are likely to move towards this faster through partnerships with the fintech start-ups and mobile network operators that are often more innovative and agile in solution delivery. By layering a culture that supports agility and measured risk-taking on top of a base of sound technologically innovative solutions, we can set the true potential of Africa alight.
Mpumi Makhubu-Mukogo, is global markets digital head at Standard Bank
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 government of Malawi has held a political dialogue with the European Union. The Political Dialogue addressed a series of topics relating to priority areas of the EU 2021-2027 Multi-annual Indicative Programme, namely green and resilient economic transformation, democratic and economic governance and human development and social inclusion.
The exchanges also touched upon geo-political developments and common values, in particular multilateral fora where the EU, EU Member States and Malawi meet, and the impact on Malawi of the Russian war against Ukraine.
On 7th September, 2023, the Republic of Malawi and the European Union (EU) held their second Political Dialogue meeting of 2023, to discuss how the two sides may optimise yields of their partnership and other issues of mutual interest. The dialogue, which was hosted by the Government of Malawi through the Ministry of Foreign Affairs, was characterised by long-standing mutual trust between the parties, and was conducted in an open and constructive manner.
The Government of Malawi delegation was led by Honourable Nancy Tembo, M.P., and Minister of Foreign Affairs, who was accompanied by Honorable Jean Muonaowauza Sendeza, M.P., Minister of Gender and senior government officials.
The delegation on the side of the European Union was led by His Excellency Mr. Rune Skinnebach, EU Ambassador to Malawi, who was accompanied by His Excellency Mr. Séamus O’Grady, Ambassador of Ireland; Her Excellency Ms. Saana Halinen, Ambassador of Finland; Her Excellency Ms. Margret Verwijk, Ambassador of the Netherlands; His Excellency Mr. Vladimír Grácz, Ambassador of Slovakia; His Excellency Mr. David Martinon, Ambassador-designate of France; Mr. Knut Gummert, German Deputy Ambassador; Ms. Emma Borgnäs, Swedish Chargée d’Affaires; Ms. Elisa Brandi, Deputy Ambassador of Italy; Mr. Michal Novák, Deputy Ambassador of the Czech Republic; Laurijn Vansteenbergen, Deputy General Representative for Flanders, Embassy of Belgium and senior officials from the European Union Delegation to Malawi.
The Political Dialogue addressed a series of topics relating to priority areas of the EU 2021-2027 Multi-annual Indicative Programme, namely green and resilient economic transformation, democratic and economic governance and human development and social inclusion. The exchanges also touched upon geo-political developments and common values, in particular multilateral fora where the EU, EU Member States and Malawi meet, and the impact on Malawi of the Russian war against Ukraine.
Speaking at the meeting, Honourable Nancy Tembo stated that Malawi and the EU agree on the need to boost private sector development, build climate-smart infrastructure, and strengthen transparency and accountability to underpin Malawi’s economic and political governance. Honourable Tembo indicated that given the Malawi Government’s priorities were in same areas, the EU’s steadfast support was invaluable. She commended the convergence of views on how to accelerate a just energy transition for Malawi that creates jobs and opportunities across the country. She noted that the political dialogue highlighted opportunities for enhanced collaboration between Malawi and the EU, aiming to bring about greater benefits for all citizens.
In his remarks, His Excellency Mr. Rune Skinnebach, EU Ambassador, stated that the Multi Annual Indicative Programme reminded everyone of the importance of the EU building a trusted partnership with Malawi and aspire for a prosperous, peaceful and an inclusive society. This aspiration remained relevant today as it was over 60 years ago, at the birth of the European Union, and it was more so in the context of Malawi, where EU was keen to contribute to strengthening the basis for an investment and business conducive environment.
Ambassador Skinnebach said the EU strives to systematically ensure dialogue, consultation and advocacy for the objectives of the EU and Malawi’s partnership, which are aligned with Malawi’s Vision 2063.
Both parties re-affirmed their commitment to holding a regular high-level political dialogue between them, and to the joint promotion of democracy, the rule of law, good governance and human rights.
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
