Andrew Uaboi, Vice President and Head, Visa West Africa makes a case for why creating favourable conditions for innovation is critical for access to the digital economy
As Africa’s largest economy, Nigeria offers substantial growth potential across several sectors. While much of our economic potential has traditionally been based on our status as one of the world’s ten largest exporters of crude oil, the government is keen to diversify by developing other industries.
However, one major hurdle to overcome first, is financial inclusion. By the end of 2020, just 64% of Nigerians were part of the formal financial system – still short of the government’s target of 80%.
The big question remains, how do we bridge this gap? While fintech partnerships are an important route towards improving access to the digital economy, the creation of a favorable ecosystem is also a critical factor, all geared toward establishing optimal conditions for innovation and entrepreneurship.
There is a large body of published literature that offers frameworks outlining the right conditions for innovation, and this is something that Visa strives to enable through its network of global Innovation Centers, offering our partners a space to experiment and build solutions that bring more people and communities into the digital economy.
On digitalization of Nigeria’s economy, the agricultural sector is posed to reap the biggest benefits. In 2021, the sector contributed 25.9% to our real GDP and it employs more than 70% of our population – primarily at a subsistence level.
This is why the government sees the development of agriculture as an important means of employment generation, food security, and poverty reduction.
We saw this in the Agriculture Transformation Agenda 2011-2015, followed by the Agriculture Promotion Policy 2016-2020; two development frameworks that outline specific strategies – doubling the growth rate of the integrated agriculture sector to increase its contribution to the national GDP; reducing food imports to become a net exporter of key agricultural products; and integrating agricultural commodity value chains into the broader supply chains of domestic and foreign industries.
Given the importance of the agricultural sector to Nigeria, ThriveAgric, a start-up focused on digitizing the entire value chain for farmers, is a worthy regional winner of the 2022 Visa Everywhere Initiative (VEI) for the Central and Eastern Europe, Middle East, and Africa (CEMEA) region.
VEI is an innovation program that helps start-ups unlock new opportunities, giving them a global platform to demonstrate their innovation, ideas, and groundbreaking solutions.
Over the seven years since VEI’s launch, nearly 12,000 start-ups have taken part in the initiative, raising a collective $16 billion in funding.
ThriveAgric’s Agricultural Operating System helps map farmer’s lands, onboarding, recording visitations, record valuable harvest data, manage inventory, and monitor the progress of farms in real time. Over the past five years, it has disbursed financing worth more than $70 million to over 240,000 farmers, helping them double their income and triple their output.
Now, as a Visa partner, ThriveAgric will deploy Visa cards to farmers across the continent – speeding up disbursements, offering secured transactions, access to credit scoring, digitized payment flows, among other things.
Visa’s core purpose is to expand access to the digital economy – for both individuals and small- and medium-sized businesses (SMBs) – because we believe this is the key to driving both inclusive growth and prosperity for everyone, everywhere. ThriveAgric is the perfect partner for driving such growth, bringing individuals and SMBs into the digital economy while supporting the digitalization and development of one of the continent’s most important sectors.
Further development of Nigeria’s healthcare system is also critical for future growth. CarePay, a Nigerian health tech start-up, was selected as another finalist for VEI.
CarePay negotiates, aggregates, and coordinates discounts across hundreds of healthcare merchants to provide healthcare services to both insured and uninsured individuals and households.
During VEI’s CEMEA regional finals, the health tech start-up displayed how its model can drive both customer and brand retention for a range of stakeholders which includes Fintechs, card networks, banks, telcos, and pension funds and those who adopt the CarePay healthcare discount product as loyalty benefits for their customers.
The company’s drive to use digital technology to help consumers access affordable healthcare, when scaled, could result in a significant boom to Nigeria’s economy.
While ThriveAgric and CarePay have digitalized agriculture and healthcare, Lagos-founded Paga aims to boost merchant access to digital payment acceptance – which can help boost financial inclusion.
By March of 2020, when it became a Visa partner, the start-up had created a multi-channel network for more than 14 million customers in Nigeria to transfer money, pay bills, and make digital purchases through its mobile app and 24,840 agents.
Through these mini case studies, we all see why the continued development of ecosystems that foster innovation and entrepreneurship is critical.
Platforms such as VEI will continue to play a role in highlighting the best use cases of digitalization across a range of sectors, helping founders to secure valuable funding to turn their ideas into a reality while providing them access to Visa’s sizeable and global network.