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Dr. Mahamudu Bawumia, the vice president, has issued a challenge to financial institutions, Fintechs operating in Africa, and African leaders to seize the numerous exclusive chances available on the continent to engage in innovative thinking, teamwork, and opportunity-seeking aimed at improving the lives of the continent’s citizens.
At the ongoing 3i Africa Summit in Accra on Tuesday, May 14, 2024, Dr. Bawumia spoke on the topic “Digitizing Economies In Africa: A Future Imperative.” He noted that Africa’s youthful and rapidly growing population, rising internet penetration and smart phone usage despite falling internet costs, and significant growth in its financial services market present a unique set of variables to complement the fintechs’ growing influence in daily life, particularly in ensuring 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.
“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,” he noted.
However, Dr. Bawumia cautioned that this progress would not come easily. He recommended fintech businesses in Africa to use a comprehensive approach that stresses innovation, highlights the vast market potential, and prioritizes regulatory compliance and transparency in order to further attract and secure such huge funding.
“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.
Citing a UN report which projects that Africa will account for 25% of the world’s population by 2050, Dr Bawumia pointed out that this demographic landscape does not merely signify a vast theoretical market but also emphasizes an expanding addressable technology market.
“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.
The Future
“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.
Fostering collaboration across various stakeholders, be it governments, financial institutions, tech startups, or investors is crucial for creating synergies and driving collective growth, Dr Bawumia emphasized.
“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.”
Source: Ghanatodayonline.com
