How can Africa’s continental free trade agreement be moved forward from talk to action? An eventful week in Ghana ended with new promises from ... African governments and state parties to speed up processes towards the full realisation of the world’s largest free trade area – AfCFTA.
The company hopes to announce an investment in East Africa in April, Okoudjou says from Johannesburg. He aims to strengthen MFS Africa’s presence in Cameroon, Gabon and Chad in Central Africa and Rwanda, Uganda and Kenya to the east.
MFS Africa has connected 320m mobile wallets across the continent, which Okoudjou estimates is about 60% of the market. As the number of African mobile wallets continues to expand, Okoudjou aims to connect 500m users by 2025. “Cross-border payments should be as easy as international phone calls.”
Full acquisitions are “one of the tools at our disposal,” Okoudjou says. “Consolidation is one of the keys to the promised land” of a seamless system to transfer mobile-money across the continent. The company’s mission is to become “the SWIFT of mobile money,” Okoudjou says, referring to the inter-bank messaging platform. “We want to be in all African countries.”
- In June 2020, MFS Africa bought Beyonic, which provides digital payments services for small and medium-sized companies and fintechs. In December, it partnered with PayPal’s Xoom to allow Xoom customers in Europe and North America to send money to Africa.
- MFS Africa is also working on a project to connect its gateway with China to facilitate trade. Okoudjou aims to get the “plumbing” completed this year, which would enable the system to go live in 2022.
Some customers do not understand why it is often impossible to send mobile money even to a nearby country, Okoudjou says. He cites regulatory reasons tht prevent transfers between Ghana and Togo, or between Guinea and Guinea-Bissau. Sierra Leone also needs to be connected to become part of a regional trading hub, he adds.
Some African countries are hampered by central bank mandates that are “too narrow and too inward looking” to enable them to address the regulation of mobile money, he argues. That means it is up to governments to take a “broader view”. The existence of gaps “does not have to be cast in stone”.
- There is an urgent task to “evangelise and educate” regulators as to the concrete improvements that mobile money brings.
- The trade triangle that has developed between Kenya, Uganda and Rwanda is an example, he says. “Communication is usually a leading indicator of trade.”
Okoudjou points to the example of trade between Nigeria and his native Benin. It remains impossible to settle a cross-border transaction with mobile money in either direction. Nigerian mobile money remains heavily reliant on having a bank account, he says. “Those who are excluded from banking in Nigeria still need to be given access to mobile money.”
- Citizens in Africa need to do more to press their governments to allow them access to mobile money transfers, he says.
- Okoudjou concludes: “Tech entrepreneurs are not going to solve unemployment in Africa. But we can create opportunities for others to use their abilities.”
Free trade in Africa will not reach its full potential until mobile money is fully transferable across the continent.
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