Being Keynote Speech Delivered by Dr. Segun Aina, President, Africa Fintech Network (AFN) at the 5th Seoul Dialogue on Africa, Seoul, South Korea on 14th December 2022
I would like to start this presentation by recognising the eminent personalities who are here at this event.
• Amb. Woon-Ki Lyeo, President, Korea-Africa Foundation,
• H.E.Amb. Young Sain Choi, Deputy Minister, Ministry of Foreign Affairs of the Republic of Korea,
• Hon. Hoon Sul, President, National Assembly’s Forum for Africa’s New Era
• Hon. Jae-Ok Yun, Chairman, Foreign Affairs and Unification Committee, National Assembly,
• H.E. Carlos Victor Boungou, Dean, African Group of Ambassadors & Ambassador of Gabon to Korea,
Other Heads of diplomatic missions and in particular HE Ali Maggasi, Nigeria's Ambassador to Republic of Korea;
• H.E. Ki-moon Ban, Chairman of the Ban Ki-moon Foundation For a Better Future and The 8th UN Secretary-General,
• Sir Samuel Esson Jonah, Chairman Jonah Capital,
• Other dignitaries, Distinguished Ladies and Gentlemen
I congratulate and commend the Government and people of The Republic of Korea and the Korea Africa Foundation, on this great occasion of the "5th Seoul Dialogue on Africa". I am particularly delighted on behalf of the Africa Fintech Network (AFN) to be part of this important conference aimed at further strengthening the cooperation between Korea and Africa. The overall theme of this event – “Resilience and Leap Forward - Four key Strategic Areas” is very apt and timely.
Although the continent of Africa is made up of fifty-four different sovereign countries, there are significant commonalities, challenges, and opportunities that cut across the four strategic areas to be addressed during this one-day dialogue session.
I look forward to post-dialogue, clear plans of action, with the well-defined implementation process for 2023 and beyond.
The Africa Fintech Network (AFN) was inaugurated in 2018, the same year the Korea-Africa Foundation was established. AFN is an ecosystem enabler serving as the voice of fintech for the African continent and beyond, promoting innovation in financial systems and technology, leading regulatory advocacy, and positioning the continent as a source of great talents, desirable innovative solutions, and a destination for foreign direct investment. AFN commenced with national fintech associations of seven African countries and has grown its country membership to thirty-four countries and is projected to grow to fifty out of the fifty-four countries on the continent by the end of 2023. As part of our mandate, we not only serve as the voice of the African fintech communities but continually seek partnerships and collaboration with governments and government agencies, institutions, and individuals across all continents of the world. In this respect, I am excited to announce that two of such Memoranda of Cooperation are being signed today between Africa Fintech Network and two key Korean organisations.
AFN, therefore sees this dialogue as a great opportunity to directly connect Korea and Africa on all matters relating to fintech and the platform economy in general. South Korea is well known for its resilient people, strong industrial base, landmark achievements in technological innovation, and a nation of great human and material wealth. Africa, on the other hand, with a population of about 1.3 billion, estimated to grow to 2.5b and 4.5b in 2050 and 2100 respectively, median age of about 19 years, rich in natural resources can raise its hand as a growing source of technological talents, highly spirited entrepreneurs, numerous virgin investment opportunities, but largely lacking the much-needed expertise and capital to sustain its development agenda. A further cementing of the relationships between Korea and Africa will therefore provide a great opportunity for win-win outcomes.
Africa Fintech Landscape
The words “Africa” and “innovation” are not often found in the same sentence. But it is fact that great developmental opportunities are happening in Africa especially in these past few years, with huge growth prospects in the years ahead.
FinTech has become a major force shaping the structure of the financial industry in Africa. New technologies are being developed and implemented, changing the competitive landscape and not surprisingly, the Africa fintech ecosystem is steadily coming of age.
In the face of ongoing economic challenges and the lingering effects of the covid-19 pandemic, fintech is booming in the continent. According to a recent publication by McKinsey & Co, between 2020 and 2021, the number of tech start-ups in Africa tripled to around 5,200 companies. About half of these were fintech, which are making it their business to disrupt and augment traditional financial services. Although disproportionally low when compared to $132 billion total global investments in the fintech ecosystem, fintechs in Africa attracted $5.2 billion investments in 2021, which is higher than the sum of investments received in the previous five years. In the last one year, investments in technology startups and scaleups has slowed down in other parts of the world but has increased in Africa.
The use of mobile money has grown exponentially in the past five years, making the continent the global leader in mobile money innovation, adoption, and usage. M-Pesa, one of Africa’s earliest tech-driven financial products, has since transcended Africa to become a global financial product now in use in several countries beyond Africa. Indeed, according to ACI Worldwide Report of March 2021, Nigeria the most populous African country was ranked number 6 of the top 10 countries ranked by real-time payment transactions after India, China, South Korea, Thailand and the UK. As at February 2022, Africa has produced not less than eight fintech unicorns (a unicorn is a firm valued at over $1billion) while many others are on the verge of achieving the magic $1 billion valuation in 2023.
While access to traditional banking services remains almost a mirage for most Africans, the near-universal availability of mobile phones has allowed millions to access mobile money services. Mobile money accounts now surpass bank accounts in the continent and greater financial inclusion has benefited large segments of the population that remain unbanked.
A recent McKinsey report projected that “Africa’s fintech revenue could grow eightfold and reach $30 billion by 2025”.
The direction of travel now seems certain, with many financial institutions in Africa transiting to being digital banks and expecting their customers to complete an increasing proportion of their transactions online or via mobile services. Within this broad trend, fintech start-ups are continuing to innovate and promote financial inclusion as they grow.
Several African countries particularly Nigeria, Kenya, South Africa, and Egypt have established various innovation and fintech hubs for tech start-ups and have generated significant, new employment opportunities. These hubs provide the means for the industry to continue evolving not only in size, but in the variety of services offered. The top 4 cities of Sub-Saharan African countries ranked in Global Fintech index 2022 namely Lagos, Cape town, Nairobi, Johannesburg have a lot to learn from Seoul’s emergence as one of the top 20 cities ranked in Global fintech ranking reports.
It is expected that South Korean entities will engage with a growing list of institutions across Africa focusing on incubating ideas, accelerating existing innovative businesses, expanding market access and providing opportunities for new skills required for the now and future of the workspace as we move from the new normal to the next normal. For instance, one of such African innovation-centered organisation established during the covid-19 lockdown period with audacious goals is- Opolo Global Innovation (Opolo)- the board of which I am privileged to Chair. Opolo, incorporated in August 2020 in Nigeria but with global presence and partnerships, and focusing on building innovation hubs in university campuses across Africa, empowers students with new skills, incubating their ideas and facilitating initiatives with researchers and lecturers to move research to innovation, commercialization, and enterprise. This process follows the quadruple helix model.
Fintech is central to the operations efficiency and growth of the other three key strategic areas for post crises era, which are the focus of discussions at today’s dialogue session namely - Green Energy, Healthcare, and Infrastructure. Technology serves as an enabler in these areas while finance is pre-eminent in every human endeavour today and increasingly so in the future.
Although not one of the four listed strategic areas for discussion at this 5th Seoul Dialogue on Africa, I want to recognise that the agricultural sector is the highest employer of labour in many African countries, and innovation in the agricultural sector has huge potential in Africa. Digital financial services increase smallholder farmers’ access to weather and market information and help decision-making on when and which crops to plant and where to sell crops.
The Tigo Kilimo SMS-based application, launched in Tanzania in 2012, provides up-to-date weather and agronomic information, and the Connected Farmer program in East Africa sends up-to-date market prices to farmers’ mobile phones, allowing them to select the best markets and times at which to sell, and receive digital payments and receipts. Agricultural technology (agriTech) is on the rise.
In fragile and conflict-affected states, financial technology (FinTech) has played an instrumental role in solving challenges In West Africa. For instance, the governments turned to mobile wallets to address some of the challenges posed by both Ebola and Covid-19 outbreaks. The United Nations finds that mobile payments to emergency workers dramatically shortened payment times and minimized fraud during outbreaks.
The November 2022 COP 27 hosted in Egypt has brought attention not only to global challenges posed by climate change but has galvanised Africa's urgent need for acceleration of green energy and renewable energy programs-solar, wind, hydro, etc - to counter the negative effects of fossil fuels and other emission generated energy sources. More than ever before the African continent needs to leverage its opportunities for alternative energy in the form of renewables. Africa has great potential in hydro, solar, wind, and biomass-powered energy, and success stories are found in Morocco and South Africa. There are significant and sustainable commercial opportunities for South Korean organizations for investment in these programs and providing needed technical expertise. In this respect again, fintech will make an impact and support emerging cleanTech entities.
Innovations in the fintech space have also enabled and benefited the health sector, especially during the covid crisis period. In Rwanda, the government partnered with a private company (Zipline) to use drones guided by mobile phone–based location services to quickly deliver life-saving medical products to rural health clinics. Payment by mobile phone powered by fintech solutions facilitates the business model and creates linkages between fintech, telemedicine, and health technology (healthTech).
Quality health infrastructure specifically technology-based facilities to facilitate patient care are needed in all African countries.
There are various ongoing research and development activities and interest in the application of machine learning and artificial intelligence (AI) in medicine/healthcare. Significant opportunities exist for partnerships between South Korea and African countries in healthcare including in areas referred to as Africa’s traditional medicine.
New technology also has the potential to help address Africa’s infrastructure deficit. There is growing interest in infrastructure Technology (Infratech). According to AfDB Infrastructure Development Index, Africa is the fastest-growing continent in population but has the least developed infrastructure. CNN Connecting Africa on the 17th of November 2022, highlighted fifteen ongoing infrastructure megaprojects that are capable of reshaping Africa from railways to roads to ports such as the Lekki Deep Seaport in Nigeria, to intercontinental subsea internet cable linking Africa countries to Euope and other parts of the world, new administrative cities in Egypt and Eko Atlantic City Nigeria where the United States is building the biggest consulate in the world, Konza Technology City in Kenya, internet balloons in Zanzibar, internet connectivity infrastructure, massive affordable housing and so on. According to a recent AfDB Report, Africa’s infrastructure financing needs are estimated to be as much as $170billion per year by 2025 but with an estimated gap of about $100billion annually. For instance, for Nigeria, the World Bank indicated Nigeria would need 300 years to solve its current infrastructure problem and fill its infrastructure gaps at its current pace of development. In this regard, it projected that the infrastructure gap would likely reach $3trillion in the next 30 years. Good infrastructure supports economic development therefore regional integration including programs like Africa Continental Free Trade Agreement (AfCFTA) will happen seamlessly with supportive infrastructure.
AFN Partnership Gameplan for South Korea-Africa Co-operation
AFN is poised to be a prominent stakeholder as we seek to accelerate partnerships between South Korea and Africa in many respects with particular emphasis on the four strategic areas we are discussing today.
We are proud to recall that within four years since its formal establishment and launch, the AFN has been able to record some landmark achievements within the African fintech ecosystem some of which include:
• Built additional twenty-seven national fintech associations from seven at inception to currently thirty-four countries including impactful partnerships in Africa-i.e., Afdb, Afreximbank, UNECA, Ecobank Transnational Inc - and in other continents. The goal is to establish member fintech country associations in all of Africa’s 54 countries and ensure equal opportunities for talent management, wealth creation, and economic growth.
• Contributed to the draft of the digital transformation strategy of the African Union (AU) and United Nations Economic Commission for Africa (UNECA) which is currently being used for the implementation of the AfCFTA
• Developing and deepening impacts of local fintech ecosystems through various activities including the annual gathering of all global fintech stakeholders at the Africa Fintech Festival, the 2023 edition of which will be held in Nairobi, Kenya, in August 2023.
• Commenced the development of a digital map of fintech in Africa.
• Customized fintech and regulators masterclass to address Africa’s peculiar regulatory pain points as it constantly engages with continent-wide regulators such as the Association of African Central Banks (AACB). As the current Chairman of the Global Banking Education Standards Board (GBESTB) made up of professional banking institutes across all continents, and with the mandate to establish globally acceptable banking standards for the education of bankers, I am aware of the efforts to produce a global fintech standard among many others which is supportive of the growing relevance in the banking and financial services industry.
• Currently building an Africa Fintech Hub – A digital marketplace of all African fintech-related activities specifically for the ecosystem with funding support from a development finance Institution.
In conclusion, let me add that for the future, AFN’s plan is to develop these gains to better position Africa’s fintech ecosystem and we are using this conference to call on South Korean investors, institutions, government and government agencies, and other stakeholders to work with us to jointly undertake key development Initiatives which includes, but is not limited to:
1. The establishment of regional Technology and Innovation Centres across five economic zones of Africa targeting the identification and nurturing of tech talents in the continent some of which can be deployed to support South Korea's huge industrial base.
2. Establish the Africa-South Korean Fintech Start-ups Investment Fund,
3. Annual Korea-Africa Fintech Forum incorporating fintech start-up challenges and hackathons, talent, and capacity development programs.
4. Co-creation of the much-needed real-time Africa Fintech Map,
5. Establishing direct linkages between policy and regulatory authorities of South Korea and Africa for knowledge transfer and benchmarking fintech policy and regulatory developments.
6. Moving research into innovation and commercialising products through the quadruple helix model of stakeholders in Africa and South Korea.
We are indeed delighted at the focus areas of this event and look forward to mutually beneficial outcomes at the end of the day and the commencement of new avenues for cooperation.
Thank you very much for your attention.
About the Author
Dr. Segun Aina is the President of Africa Fintech Network. He can be reached vide [email protected]
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