The first day of Nigeria Fintech Week 2023 was packed with innovative minds from across the financial sector, with eye opening insights to help push the nation’s economy forward.
Dr. Akinwumi Adesina, the President of the African Development Bank, gave a compelling keynote address. His insights shed light on the programme’s theme “Fintech: Resilience, Innovation, & Diversification” in the fintech industry, not only in Nigeria but across the entire African continent and the global fintech arena.
Nigeria Fintech Week has evolved into a pioneering event for financial sector leaders, not just within Nigeria but on a global scale. It serves as a platform for dialogue and collaboration between industry leaders, offering a unique opportunity to explore the latest trends and developments in fintech.
“The theme for this year’s Fintech Week, ‘Resilience, Innovation, and Diversification,’ resonates particularly with the current global economic landscape,” Adesina said speaking through Lamin Barrow, the Director General of Nigeria, African Development Bank (AfDB).
“Fintech companies are grappling with the need to adapt to rapidly changing conditions, particularly in the wake of global economic downturns characterized by volatility and heightened uncertainties. These challenges are particularly evident in Nigeria and other African nations, with manifestations in macroeconomic instability, rapid forex depreciation, and rising inflation. Consequently, Africa’s GDP growth has seen a decline, estimated at 2.8% in 2022, down from 4.8% in 2021.”
In light of these challenges, the need for resilience through innovation and product diversification has never been more urgent. The fintech sector in Africa plays a major role in building this resilience by driving financial inclusion across the continent. “Recent studies indicate that 33% of adults in sub-Saharan Africa have mobile money accounts, the largest of any region globally.”
Mobile Money Revolution
Speaking further, Dr. Akinwumi Adesina noted that the 2022 GSMA report highlights that Africa now accounts for 621 billion registered mobile money accounts, representing 46% of the global total and approximately 70% of the world’s $1 trillion mobile money transactions in 2021. The spread of mobile money accounts has opened doors to better serve underserved populations traditionally excluded from the formal financial system.
“The COVID-19 pandemic underscored the significant role digital technologies can play in managing shocks. Continents with advanced digital financial service ecosystems were able to scale up emergency cash transfer programs, demonstrating the resilience of fintech in addressing critical societal needs.”
Fintech Beyond Banking
African fintechs extend their impact well beyond banking and payments. From healthtech solutions that make healthcare accessible with just a click, to agritech platforms connecting farms to markets and providing real-time weather forecasts, and affordable education services, innovation is driving inclusion and addressing various societal needs.
Global Investor Attraction
African fintechs’ capacity to innovate has attracted global investors. “Reports from Disrupt Africa and the International Finance Corporation reveal that there were 26 reported fintech acquisitions in Africa between June 2021 and July 2022. In 2021, 63% of tech funding in the continent, amounting to $2.7 billion, went to the fintech industry,” Dr. Akinwumi Adesina highlighted.
Nigeria’s Growth Potential
As the hub of the African fintech industry, Nigeria has seen the emergence of five of the 11 digital companies that have reached unicorn status. To witness significant growth in the fintech industry, Nigeria must further integrate technology into business activities. This necessitates domesticating the Startup Act and implementing regulatory reforms to simplify procedures for cross-border trade transactions, enhance access to finance for startups, and accelerate SME integration in e-commerce.
The African Development Bank’s Commitment
The African Development Bank strongly believes that a resilient, innovative, and diversified fintech sector is key to accelerating economic transformation in the continent. The bank is actively supporting African countries in bridging digital infrastructure and knowledge gaps, creating a conducive business environment to promote entrepreneurship and innovation in the fintech industry, and upskilling the youth to prepare them for the jobs of the future.
Since 2012, the African Development Bank has invested approximately $2 billion in 40 innovation and ICT projects across the continent. Notably, this includes $170 million in financing for the investment in digital and creative enterprises projects in Nigeria, a significant component of which is the establishment of venture capital funds to support startups in the digital creative industries.
Dr. Akinwumi Adesina’s keynote address at NFW Day 1 emphasized the key role that fintech plays in Africa’s economic development. In fostering resilience, innovation, and diversification, the fintech industry addresses economic challenges and also provides innovative solutions to improve the quality of life for people across the continent.
The African Development Bank’s commitment to this sector further emphasizes the transformative potential of fintech in Africa.
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