This initiative aligns with Visa’s recent commitment to invest US$1 billion in Africa’s digital transformation and its long-term dedication to fostering economic advancement and inclusive growth in the region.

The Africa Fintech Accelerator program offers a three-month intensive learning experience designed to fuel the growth and development of up to 40 start-ups annually, focusing on business expansion and mentoring.

Upon completion of the program, Visa plans to extend further support to select participating fintech businesses by providing capital investment. Additionally, participants will gain access to Visa’s cutting-edge technology and capabilities, expediting their commercial launch.

African fintech start-ups can apply for the program during two application phases each year, commencing this month.

With over 1,000 African fintech start-ups participating in the Visa Everywhere Initiative competition in 2022, finalists from the country editions held this year will have the opportunity to join the accelerator program.

“Africa boasts one of the world’s most dynamic and revered fintech ecosystems, nurturing exceptional entrepreneurial talent within a rapidly growing, digitally-savvy population,” remarked Alfred F. Kelly Jr., Executive Chairman of Visa.

“For decades, Visa has been increasing its investments in Africa while forging stronger partnerships throughout the continent, all aimed at supporting the forthcoming wave of innovation and growth.

Our newly introduced Fintech Accelerator will provide expertise, connections, and investment opportunities to Africa’s premier fintech start-ups, facilitating their scalable expansion.”

By launching the Africa Fintech Accelerator program, Visa aims to foster a thriving fintech ecosystem in Africa, empowering start-ups to drive economic progress and create inclusive opportunities across the continent.

The report highlights various factors impeding the country’s economic progress and provides recommendations to address these challenges.

Low Revenue-to-GDP Ratio

The report reveals that Nigeria’s revenue-to-GDP ratio is currently around 8%, significantly lower than the global average and behind the West African average of 13%. This low ratio indicates a limited ability to generate revenue, hindering economic growth and development.

Recommendation: To address this issue, the AfDB recommends implementing policies that support public-private partnerships (PPPs) and promote the export-oriented private sector. These measures would contribute to a vibrant and competitive economy, accelerate diversification, and boost exports.

Key Challenges to Non-Oil Sector Growth

The AfDB identifies several critical factors that impede the growth of Nigeria’s non-oil sectors. These challenges were highlighted by Mr. Lamin Barrow, Director General of the Nigeria Country Department of the AfDB Group, during the 2023 Nigeria Employers’ Summit.

Macroeconomic Instability

Barrow emphasizes macroeconomic instability as a significant obstacle to Nigeria’s economic progress. This instability includes factors such as inflation, exchange rate volatility, and fiscal deficits, which hinder sustainable growth and discourage investment.

Low Productivity

The report points out low productivity as a key challenge for Nigerian industries. The inefficiency and low output levels of various sectors limit their competitiveness and hinder economic growth.

Limited Access to Credit

Small and medium-sized enterprises (SMEs) face difficulties in accessing credit, which hampers their ability to expand and invest in productivity-enhancing measures. This lack of financing options stifles entrepreneurship and inhibits sectoral growth.

Inadequate Infrastructure

Nigeria’s inadequate infrastructure, including logistics deficiencies and particularly inadequate power supply, presents a significant barrier to non-oil sector development. Insufficient infrastructure limits production capacities, raises operational costs, and reduces competitiveness.

Recommendation: The AfDB stresses the urgency of resolving infrastructure bottlenecks to remove barriers to non-oil trade and exports. Mobilizing the private sector for infrastructure development is suggested to alleviate the burden on the government and expedite progress.

Fiscal Deficits and Food Imports

Barrow expresses concern over Nigeria’s fiscal deficits, estimated at six percent of GDP. These deficits are attributed to high public expenditure amidst declining revenue from crude oil exports. Additionally, despite Nigeria’s abundant arable land and favorable climate, the country continues to be a net importer of food.

Renewable Energy and Power Sector Reform

Barrow highlights the urgent need to address the longstanding challenges in Nigeria’s power sector. Successful examples from Egypt and Morocco, where clear and stable policies, supported by strong political will, led to remarkable turnarounds, are cited. Barrow recommends leveraging Nigeria’s abundant gas resources as a transition fuel and investing heavily in renewable energy generation, particularly solar power.

Domestic Resource Mobilization and Agriculture Sector

To enhance domestic resource mobilization, Barrow advises the Nigerian government to improve tax collection and administration, address leakages, and enhance the efficiency of public investment programs. He also emphasizes the need to boost agricultural sector productivity, develop value chains, and attract private sector investments in rural areas.

Conclusion

This analysis highlights the critical challenges impeding Nigeria’s economic potential and provides recommendations to address these issues.

The AfDB emphasizes the importance of implementing policies that promote public-private partnerships, enhance infrastructure development, improve power supply, and strengthen sectors such as agriculture and renewable energy.

By addressing these challenges, Nigeria can foster economic diversification, increase productivity, and achieve sustainable development.

The educational institutions available on Tuition include high schools, universities, colleges and some global edutech platforms.

Tuition is designed to solve the challenges in paying school fees for students studying abroad and at home and aims to ensure payments ease when making the transactions. The new service enables students, parents, guardians and sponsors to pay school fees to over 40 institutions in the UK, with plans to add more institutions in more countries in Africa and beyond.

It has been reported that African payments to overseas schools have been hindered by a myriad of challenges. From the high cost of transactions, limited access to banking services, lack of transparency, security concerns, and currency exchange rates, Africans have faced difficulties in ensuring that their funds are disbursed within the shortest times possible to overseas financial institutions.

The new product will leverage Flutterwave’s world-class payments technology solution to make school fee payments more convenient, secure, and reliable. Parents, guardians, and sponsors can now pay directly to learning institutions in the UK and easily track their transactions by checking the status and history on the Tuition web app.

Olugbenga “GB” Agboola, Flutterwave CEO, commented on Tuition by saying, “We are excited to launch Tuition to support the dreams of African students across all levels who want to study anywhere without worrying about how to meet the deadline for their school fees payment. With Tuition, we are providing a safer, reliable, and affordable means for African students to pursue their dreams and seamlessly get financial support from parents, guardians, and sponsors.”

Speaking on the new product launch, Stella Elele, Product Manager Tuition by Flutterwave, said: “We are always looking for new ways to make payment challenges in Africa hassle-free, and we are confident that Tuition  will be a game changer for parents who want to support their children’s education. We are excited to offer this solution to parents in Nigeria, with plans to eventually roll out the service to other African countries. We want to provide the best possible service and support for our customers.”

The product is currently available in Nigeria for UK school fees payments and will soon be rolled out to other African countries in the coming months. Flutterwave also plans to add more schools in Africa, the UK, US, Canada, France and Germany as it grows access to the product.

This partnership will offer Fawry’s customers a seamless payment experience, while also enabling Infobip to expand its reach in the Egyptian market.

Through this partnership, Fawry will be able to leverage Infobip’s omnichannel engagement, contact center, chatbot and identity solutions to streamline the payment process for its customers. Infobip’s platform will enable Fawry to build connections across all stages of the customer journey, providing a more efficient and effective payment experience.

“We are excited to partner with Infobip to enable payments through META channels,” said Heba El Awady, CBO of Fawry. “This partnership will help us to continue to deliver innovative payment solutions to our customers, while also expanding our reach in the market.”

Fawry has been at the forefront of driving digital transformation in Egypt’s payments landscape, offering a range of innovative payment solutions to meet the evolving needs of its customers.

This partnership with Infobip will enable Fawry to further enhance its capabilities and provide a more comprehensive payment experience to its customers.

“We are thrilled to partner with Fawry to enable payments through our different communication channels,” said Amsal Kapetanovic, Sales Director of Infobip Middle East and Africa. “This partnership is a testament to our commitment to providing innovative solutions that help businesses and partners overcome the complexity of customer communications to grow business and increase loyalty.”

In Nigeria and beyond, payment challenges are indeed a significant issue that needs to be addressed. Despite the progress made in the fintech sector, there are still several hurdles to overcome to achieve widespread access to efficient and inclusive payment systems in the country.

Recently, MultiChoice Group, a leading entertainment and media company in Africa, revealed its collaboration with B2B payment processing platform Rapyd and venture capital firm General Catalyst to introduce an integrated payments platform called “Moment.”

Interestingly, the partnership is seeking to provide businesses across Africa with an efficient and affordable payment infrastructure, enabling them to collect and make payments in a manner preferred by their buyers or suppliers.

The platform also seeks to empower consumers to manage their finances effectively, transforming the African payments landscape and expanding accessibility to digital payments.

Market Response and Shareholder Concerns

A 2019 securities filing report revealed that MultiChoice has 13.9 million subscribers, across Africa. And the Nigerian market controls over 45 percent.

The South African firm stands a big chance of losing many of its subscribers after it announced an upward review of the costs of its DStv and GOtv packages by 17 percent, in text messages sent to subscribers. The 2023 hike is coming barely a year when the prices were reviewed upward by the firm.

Meanwhile, following the announcement, MultiChoice’s stock experienced a decline of nearly 2% by the market’s close, suggesting a lack of confidence from shareholders regarding the company’s ability to establish a significant presence in an already fiercely competitive payments sector.

The skepticism among investors might stem from the challenges faced by Multichoice’s core business, DStv, over recent years, as evidenced by declining subscriptions and average revenue per user (ARPU) figures.

Multichoice’s Strategic Approach and Rationale

Africa still faces various payment-related issues, including limited banking infrastructure, a large unbanked population, and a high reliance on cash transactions. These factors contribute to inefficiencies, delays, and security risks in the payment ecosystem

Calvo Mawela, CEO of MultiChoice Group, expressed enthusiasm for the partnership with Rapyd and General Catalyst, highlighting the need for a reliable and accessible payment platform for millions of consumers and small businesses in Africa.

Mawela emphasized the strategic alignment of this venture with Multichoice’s existing payment processing activities, as the company already handles monthly payments from 22 million households across 50 African countries.

The establishment of Moment aligns with Multichoice’s ecosystem expansion strategy, focusing on investing in scalable services supported by technology.

DStv’s Performance and Showmax’s Potential

MultiChoice’s primary business, DStv, has encountered difficulties in recent years. Between 2015 and 2018, DStv Premium subscriptions declined from 2.35 million to 1.92 million, further decreasing to 1.4 million by the end of 2022. Furthermore, MultiChoice’s latest financial results indicated a 6% decline in Compact and commercial package subscriptions.

The average revenue per user (ARPU) for DStv has been on a downward trajectory, falling from R317 per month in March 2018 to R269 in March 2022 for 90-day active subscribers.

In contrast, Showmax, Multichoice’s alternative streaming service, witnessed a notable increase in subscriber numbers, with a reported growth rate of 68% in the previous year and 50% in the year before that.

However, since Showmax’s financial results are not disclosed separately, it remains challenging to assess its impact on Multichoice’s overall financial performance.

Long-term Goals of Moment

Multichoice envisions Moment as a pan-African payments infrastructure that will serve the 44 million small businesses operating on the continent.

The platform aims to facilitate the transition from cash to digital payments, to convert the 90% of retail transactions that currently occur in cash into digital equivalents.

By doing so, MultiChoice aims to stimulate economic development in Africa and enhance the continent’s investment readiness on a global scale, connecting African payments to the wider world.

Final Notes

MultiChoice Group’s partnership with Rapyd and General Catalyst to launch the integrated payments platform Moment signifies the company’s strategic move to address the demand for accessible and reliable payment solutions for African businesses and consumers.

While Multichoice’s core business, DStv, has faced challenges with declining subscriptions and ARPU figures, Showmax has experienced substantial growth.

MultiChoice aims to leverage its existing payment processing capabilities and expand its ecosystem through Moment, aiming to transform the African payments landscape and

Grey offers an international money transfer service that enables users to send and receive international payments quickly and without restrictions. Its range of products includes foreign bank accounts, instant currency exchange, and international money transfers.

Backed by Y Combinator, the fintech startup secured $2 million in funding last August and is actively scaling its operations. With a user base of over 300,000, Grey has already launched its services in Kenya and Tanzania.

The choice of Kenya as its East African hub is strategic, as it will facilitate the company’s operations in other countries within the East African Community (EAC).

Idorenyin Obong stated that establishing offices in Kenya would assist the firm in navigating its planned expansion in the region. He emphasized the vibrant nature of Kenya’s diaspora remittance, with remittance inflows to the country having grown tenfold in the past 15 years, reaching a record high of $3.7 million.

This substantial growth highlights the significance of remittances as a source of foreign exchange, equivalent to over three percent of Kenya’s GDP.

Additionally, Obong highlighted the increasing number of Kenyans working remotely for foreign companies, where payments can be challenging and costly. Grey’s solution enables African freelancers to have foreign accounts, receive money worldwide seamlessly, and enhance their global competitiveness.

The gathering specifically focused on how AML, risk, and compliance officers, leaders, and managers at banks and fintechs can utilize AI to increase efficiency and efficacy at their companies.

Obi spoke at the event on “Innovation, Regulations, and Trust: The Cornerstones of Financial Inclusion and Economic Growth in Nigeria.”

According to Obi, innovation is key to expanding access to financial services, but it must be balanced with effective regulations to protect consumers and promote a stable financial system.

“Trust is also crucial, as customers must have confidence in the security and reliability of digital financial services to adopt them.”

However, in an exclusive interview with TechEconomy, Obi discussed, among other things, how Zone is deploying blockchain technology to solve payment problems, the cryptocurrency regulation ban, and the National Blockchain Policy.

Decentralization of the Payment Network

In 2022, the firm, which Obi heads as CEO, rebranded from Appzone to Zone and since then has achieved tremendous feats, linking different financial service providers and expanding its decentralized payment network.

The Central Bank of Nigeria (CBN) issued Zone approval to operate under the Switching and Processing license category. The switching license enables Zone to directly engage and collaborate with crucial payment system stakeholders such as the Nigeria Central Switch hosted by NIBSS and the various card payment schemes.

Being the first decentralized payment network licensed by the Central Bank of Nigeria (CBN), Zone’s Layer-1 blockchain network enables peer-to-peer transactions without the need for an intermediary, increasing transaction speed, consistency, and dependability

“Banks can directly exchange assets without the involvement of a central authority; that means transactions can go directly between participants, which makes it more reliable and transparent.”

Solving the Problem of Failed Transactions

Basically, blockchain is immutable, the protocols are open and collaborative, and this will make “digital financial services likewise more diverse, inventive, and transparent,” Obi said.

In general, blockchain technology offers considerable potential for Nigerian fintech firms to deliver cutting-edge financial solutions and solve the country’s payment problems.

One of the most common issues usually experienced by Nigerians is an unsuccessful financial transaction that gets customers debited, then reversal becomes the issue. Usually, the first step should be to call the bank’s 24-hour customer service helpline.

After making a note of your issue and recording your transaction reference number, the executive will register your complaint and issue you a complaint tracking number. The matter is then investigated afterward.

“Blockchain technology is solving all those problems; it tells you exactly where the money is, whether debited or not.  There are times when customers would have to wait for 48 hours or more for the bank to reverse their money.”  Blockchain provides the status of the transactions both parties (bank and customer) immediately

According to Obi, the blockchain network used by Zone increases transaction speed, consistency, and dependability, as well as the technique used to reconcile ATM transactions.

“With our system, if you complete a transaction at an ATM belonging to another bank, the ATM sends it directly to your bank over our blockchain; you only need to establish a connection from bank to bank.” “Because there is never a situation where the middle switch is down, our network is quicker and more dependable.”

National Blockchain Policy

The Nigerian government has approved a new national blockchain policy aimed at institutionalizing blockchain technology in the country’s economy and security sectors.

Essentially, blockchain technology makes it possible to develop decentralized applications and new business models that will improve transactional transparency, supply chain security, and record-keeping efficiency across different sectors.

According to Obi, the move by the Nigerian government is a testament to the fact that blockchain technology remains critical, especially in the payment sector. “The approval kind of clears the air for those who have doubts about blockchain technology.”

“I think the benefit comes from how people will now begin to apply blockchain to different use cases in financial services that have a lot of opportunity.”

The CEO explained that deploying the technology in the public sector will help develop a more safe and open system for registering crucial data, including national identities, company registrations, tax records, and voting records.

The government can use blockchain to guarantee that the documents are safe, accessible, and transparently administered. This would strengthen the public’s confidence in the government while lowering corruption and increasing efficiency.

Ban on Cryptocurrency: Update

In February 2021, the Central Bank of Nigeria (CBN) instructed the commercial banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems. The apex bank cited several reasons why it took the decision to stop banks from facilitating digital currency transactions.

Since then, there have been several discussions between the CBN and market players to see if there would be some sort of alignment to lift the restrictions and ensure proper regulation.

Obi said “yes,” there is an ongoing conversation. “The truth remains that there are gaps in cryptocurrency that need to be filled. There are system issues such as exchange control, capital inadequacy, KYC, and AML.

“How do regulators manage how money flows to protect the Can you imagine a bank using all its cash to buy a coin that collapses overnight? Again, let’s say, for example, someone says, I’ll give you a stable coin for dollars; give me your dollar. How do you know that he still has that stable coin?”

Obi explains that until systemic issues such as exchange control, capital inadequacy, KYC, and AML are addressed, it remains a danger zone, citing the Silicon Valley Bank crash as a practicable example.

“We all saw what happened recently with the SVP crash. The effects are humongous. However, Obi maintained that operators must start to see cryptocurrencies from a regulatory viewpoint while working closely with stakeholders to close the gaps.

The oversubscribed equity funding round was led by San Francisco-based Base10 Partners (investors in Nubank, Plaid, and Brex), with participation from Helios Digital Ventures, Shopify, Partech, and Khosla Ventures.

Despite the growth in digital payments across Africa, most businesses still only have access to generic point-of-sale machines to support the collection of payments. These machines also typically work in isolation from the rest of the business operations, leading to a variety of inefficiencies in their business processes.

With this new funding, Nomba will deliver payment solutions that have been designed for the specific services that businesses provide, enabling them to plug gaps in their payment processes, operate more efficiently and deliver excellent customer experiences.

For example, restaurants will be able to access menus, manage inventory, receive payments, and perform other business functions all from the same hardware. For transport and logistics companies, Nomba’s solutions will enable them to directly connect their transactions to payments, creating a more seamless experience that increases sales and profitability.

Starting in Nigeria, Nomba will also deliver a range of business tools, including invoicing and order management solutions to improve efficiency and reduce cost of operations for businesses across the continent.

Since launching in 2016 as “Kudi.ai”, a chatbot integration that responds to financial requests on social apps, Nomba has evolved over the years into a profitable, omnichannel payment service provider.

The company supports more than 300,000 businesses with a wide range of payment solutions, as well as management and banking tools that enable better business processes and support business owners to be better at doing business.

The company processes $1 billion in monthly transactions, which represents a market-leading gross transaction value (GTV) for a payment service provider in Africa.

Before this funding round, Nomba had only previously raised $5 million in funding, leveraging those funds to successfully grow the business and efficiently deliver solutions that have positively impacted hundreds of thousands of businesses across Nigeria.

This new capital will enable the company to deliver more solutions for businesses in Nigeria, across Africa ,and in other markets, as the opportunities may emerge.

According to Yinka Adewale, CEO and co-founder of Nomba, “We see payment as a business model, not just a product and we want to make it easier for businesses to take advantage of all that is possible in their payment processes to support their continued growth and success.

We have a long list of products we have been working on and the funds we have raised as well as the investors that have backed us gives us a lot of confidence about what can be achieved with more effective payment solutions in the hands of business owners.”

Luci Fonseca, Partner at Base10 said, “Nomba’s track record of innovation and capital efficiency makes it one of the most exciting startups in Africa. We are thrilled to be supporting them to deliver their game-changing solutions to power growth and continued success for businesses in Nigeria and beyond.”

The fintech company enables local and global businesses to accept payments, make payouts, and get settled across popular payment channels across Africa

The firm stated that the dollar card acquisition was the latest addition to its suite of currencies, including naira bank account issuing, pay-ins, payouts, and cross-border settlement across multiple countries.

Commenting on the new product, the Head of Product at Kora, Sandra Israel-Ovirih, said, “Incorporating USD card payments has been a priority for a while now.

“We understand that many businesses operate in a global marketplace and need a seamless payment system to handle cross-border transactions. This will be a game changer for African businesses selling to a global market.”

Kora’s Chief Executive Officer, Dickson Nsofor, added, “We want the merchants we serve to scale globally. Giving them the option to accept USD is an important milestone in this effort.

“The focus is on Africa. But despite an increase in Africa’s participation in global trade, our contribution is still only around three percent. Giving African businesses the ability to accept global payment will accelerate Africa’s contribution to international trade.

“Our next step is launching a multicurrency bank account product that allows our merchants to access banking solutions currencies like EUR, GBP, and USD via the Kora platform.”

The company on Saturday revealed the groundbreaking record on Twit which reads: “We’re thrilled to announce that for the 1st time in the history of #TheSwitch, our Superswitch processed more than 1 billion transactions in Nigeria alone in a single month! (March 2023).”

The end of each year is an opportunity for many organizations to reflect on the past year’s activities, with a focus on planning for the new year and building on the successes of the preceding year.

The new start presents a chance for reviews and recalibration, where necessary, to spur the company further along on its mission to achieving set goals and objectives.

Interswitch, as it closed out its 2022/23 financial year, has recorded a tremendous leap in transaction volumes, logging in over 1.2 billion transactions across Nigeria in the month of March.

This number represents a 58% increase over the previous month’s total transaction volumes processed. For context, during the entire year 2019, before the COVID-19 pandemic set in, Interswitch processed 2.7 billion transactions over the course of the entire year.

The company’s continuous investment in cutting-edge technologies that power Africa’s financial ecosystem has greatly contributed to the increase in its switching capacity, providing much needed relief to millions of Nigerians in the form of digital payment channels, as the recent cash scarcity tightened its grip.

Serving a wide range of financial service providers including commercial banks, fintechs, microfinance banks and other financial institutions, Interswitch has continued to support key players in the payment space who in turn are able to serve the end users.

This tremendous growth speaks volumes about the company’s dedication to the provision of enabling systems in the payments ecosystem. Its resolve to Never Stop pushing the boundaries of innovation is evident in the unwavering service it delivers to its corporate clients and end consumers.

In a letter to the employees of The Switch, the Founder and General Managing Director, Interswitch Group, Mitchell Elegbe, noted that the success of the company has been spurred on by the hard work and dedication of the good People of The Switch.

He added that the future provides an opportunity to explore the potentials of an expanding landscape, encouraging employees to keep the zeal alive for the opportunities that abound ahead.

He said, “As we look ahead to the new year, I am inspired by the endless untapped possibilities that lie ahead of us and the fresh landscapes waiting to be explored. Indeed, the heat is on, it continues to intensify! I encourage you to fasten your seat belts and get ready for the next phase of the exciting ride ahead.”

Indeed, the past year was an eventful one for Interswitch: from the company’s 20th anniversary celebrations to Mr. Elegbe receiving the Entrepreneur of the Year (West Africa) Award presented by Ernst and Young, and not forgetting the Company receiving the Best Employer Award at the LinkedIn Talent Awards.

As it looks to the future, Interswitch remains focused on advancing the payments ecosystem on the continent. Its propellant: innovation for Africans, remains at the heart of its operations.