Lack of investment threatens innovation in African FinTech sector – Bank of Ghana Governor

May 14, 2024
Lack of investment threatens innovation in African FinTech sector - Bank of Ghana Governor

Dr. , Governor of the , has warned that insufficient investment in African FinTechs could hinder innovation and scalability of digital solutions on the continent. This could significantly impact efforts to achieve a fully digitised Africa.

He said it would also slow the scalability of solutions in achieving the desired impact of a digitised Africa.

Dr Addison was speaking at the opening of the three-day 3i Africa Summit on the theme: “Unleashing the FinTech and digital economic potential of Africa.”

It captures the vision of Africa in a digital world and the essence of the collective endeavours for the next three days.

The Summit presents a unique opportunity for private and public sector stakeholders to explore, discuss, and interrogate technological advances, FinTech innovations, and financial sector policies to revamp the digital financial services industry to support Africa's socio-economic transformation.

The Summit was organised by Bank of Ghana and Development Bank Ghana, in partnership with the Monetary Authority of Singapore through its subsidiary, Elevandi, organisers of the globally acclaimed Singapore.

He said the general lack of investor visibility was a major challenge for most local FinTechs.

He said without sufficient capital, brilliant ideas, and prototypes of FinTech startups solutions with the potential to address the diverse financial service needs would fail to progress to production.

He said the rapid evolution of technology had impacted all facets of life globally and for the financial sector, the actualisation of novel technologies in the payment ecosystem had revolutionised business transactions, reshaped customer behaviour, and redefined the nature of commerce.

Presently, we stand on the precipice of a global digital era, especially with artificial intelligence, and there is now a sense of urgency for Africa to accelerate the digitalisation agenda through the 3is of innovation, investment, and impactful policies to boost economic growth and development.

He said as Africans, “we have an advantage in the digitisation race based on the bulging and tech savvy youthful population, the high mobile phone penetration, the consistent expansion of mobile network access coupled with the rising homegrown FinTech solutions.”

He said Micro, Small and Medium-sized Enterprises (MSMEs) now had an online presence, which has enabled them to expand their market reach outside the localities of operations.

These developments, emerging from a thriving Fintech sector, are based on the conducive environment created by the widespread regulatory reforms and modernisation of payment system infrastructure, including interoperability.

He said with regards to intra-African trade, the Pan-African Payment, and Settlement System had been developed to support free trade across the continent in line with the objectives of the Africa Continental Free Trading Area.

This will enhance both domestic and cross-border payment systems and empower MSMEs by facilitating access to financing opportunities and broader domestic and global markets.

He said, “We need to have fashioned out concrete initiatives and partnerships by the end of this 3i Summit to achieve tangible policy outcomes that will enable affordable and safe instant cross-border payments.”

The policy outcomes would also empower FinTechs to drive Africa's economic transformation agenda by committing to a sound regulatory environment, advancing digital public infrastructure, and finally, exploring the role of FinTech in bridging the financing gap for SMEs, including the creative arts industries.

He said the need to foster innovation and investment across diverse sectors was central to the various discussions that would go on in the next three days.

He said by harnessing the power of financial technology, “we can bridge the gap and empower marginalized communities, advancing towards a more inclusive and prosperous future.”

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