On Monday, 28th of November, 2022, over 800 African finance leaders, bankers, insurers, regulators, central bank governors, public policymakers, innovators, fintech founders, and journalists converged in Lome, Togo, for the African Financial Industry Summit. The goal was to discuss and develop solutions to expedite the continent’s economic recovery in the face of the ongoing global economic crises through the development of a competitive, innovative, inclusive, and sustainable financial industry. The two days event which was held at the Hôtel 2-Février is sponsored by Jeune Afrique Media Group and the International Finance Corporation.
In 2020, the world experienced an unprecedented pandemic, but Africa was one of the most affected continents. This is because, unlike wealthier nations, the continent had no wherewithal to curtail the economic shock. Interestingly, following a 2.1% Covid-19-induced economic shrink in 2020, the African economy showed its resilience in 2021. However, there came another economically disruptive event – the Russian-Ukraine war. There is no other time than now for the continent to realise its true potential to get back on the pathway to growth in an inclusive and sustainable manner. Hence the need for the summit.
The summit started with a welcome address from, Amir Ben Yahmed, Managing Director of Jeune Afrique Media Group, who said that “the first physical edition of AFIS – eighteen months after the inaugural edition organised online – comes a decade after the creation of the Africa CEO Forum, which has become a platform at the service of the private sector to make it the engine of our growth and to accelerate regional integration in Africa.”
The Togolese president, Faure Gnassingbè, described the summit as “a first-rate opportunity to work on the future of African finance.” He emphasised the need for a collaboration between the public and private financial authorities to effectively transform the African financial landscape in the midst of economic turmoil like insecurity, climate change, financial instability, and ballooning inflation. He noted that Togo has been exemplary in this collaboration citing its status as a hub for many African financial institutions, including Ecobank, BOAD, Oragroup, EBID, and Cica-Re.
Sergio Pimenta, Vice-President, of Africa of the International Finance Corporation (IFC), and co-organizer of AFIS, noted that everyone understands Africa’s potential but it is time to bring it to reality. He foregrounded that financial institutions can be drivers of resilience and catalysts for solutions in the face of crises using the IFC’s contribution to supporting micro, small and medium-sized enterprises (MSMEs), financing trade, climate transition, digital transformation and the capital market, as an example. According to him, in the last five years, the IFC has disbursed 600 loans worth about 2 million euros, and also provided about $1 billion to SMEs in Africa through various partners. The institution, which has allocated 9.7 billion dollars to trade financing worldwide, has granted a line of $24 million to Vista Group, a bank present in Burkina Faso, Guinea, Sierra Leone and Gambia.
It is always important to discuss innovation – Ade Adeyemi, GCEO of Ecobank Group
As the global economy currently struggles with another crisis, the value of the US Dollar continues to increase, and the reason is not far-fetched. A significant percentage of global international trade is invoiced in dollars. Consequently, countries that use dollars for import trade bear the brunt as their currencies experience a decline in value. Many African countries belong here, and currencies like the CFA franc, Naira, and Cedi are unstable. The Naira, for instance, was sold at a parallel market rate of N800+/1$ (parallel market) at some point this year representing the most significant decline ever.
Commenting on the African foreign exchange problem, Ade Adeyemi, GCEO of Ecobank Group stated that what divides Africans is not FX but the mindset. “The issue of payments and currency comes after that. Our biggest constraint is trusting that the rice I buy from Kenya is better than the one I am getting from Thailand. Buying rice from Kenya helps create wealth opportunities for people involved in its production. We need to find a way to enable our people to trade with each other. We need to improve logistics and infrastructure to support trade amongst ourselves.”
He added, “trade requires information and logistics. Africa needs to figure out how to connect its countries and build infrastructures, but more importantly, the mindset must be changed. As Africans, we need to start figuring out what binds us together instead of what divides us. If we can do that amongst ourselves the potential is boundless.”
On cryptocurrencies, Adeyemi argues about the need to understand the risk and operations involved. Cryptocurrency has become popular in emerging markets like Africa, thanks to the youth demographic who find not just the wealth creation opportunities in the system but also the technology that birthed it appealing – largely because of its decentralised nature. However, cryptocurrencies have faced resistance from political, financial, and recently, religious elites. Despite the restrictions in key markets like Nigeria and Kenya, Africa had the fastest cryptocurrency adoption rate globally last year.
For Adeyemi, the technology – Blockchain, used for crypto is a very sophisticated technology that promotes trust across multiple junctions. “I do not support the clamour to stop Central Banks because of this technology. Rather, we should continue to develop that technology until we get to the point where we can find the best use. I think it is important for the regulators to bring all the players into the room because when we discuss, we would understand where the regulators are coming from regarding the mandate of financial stability, and where the fintech and other players are coming from because of their need for innovation. We need to understand the basis of competition and collaboration.
Unlocking women’s financial inclusion in Africa
Gender inequality remains one of the greatest threats to Africa’s future. Women on the continent do not have equal socioeconomic opportunities compared to their male counterparts. Many hurdles, including poverty, discrimination, and lack of institutional support continue to fuel gender disparity in access to finance and venture capital for African women. The International Monetary Fund revealed that in sub-Saharan Africa, only 37 per cent of women have a bank account, compared with 48 per cent of men, a gap that has only widened over the past few years. Similarly, women entrepreneurs confront a $42 billion gender funding gap, and in 2021 alone, women-only founders received less than 1% of the nearly $5 billion raised by African startups.
For VCs and investors to better address the gender funding gap, Olasubmi Osibodu, senior management risk advisory at Deloitte Nigeria said there needs to be a radical shift from money orientation to value orientation. “Venture Capitalist needs to look beyond profit and look into offering value. The non-financial impact should be equally as important as the financial profitability. Supporting the female financial inclusion gap will require corporate to move out of their comfort zone to seek their target participant,” she noted.
Exploring financial inclusion is a key enabler in empowering African women to achieve their potential. Increasing women’s access to and use of financial service have both economic and societal benefits as it can be transformative for any economy that chooses to make this a priority.
Korede Bella, Head of Consumer Banking, Ecobank Côte d’Ivoire emphasised that if Africa wants to grow sustainably it is imperative to focus on women. “The most important is to make women financially educated. Without it, they cannot grow sustainably. You have to know how to plan, save, and invest your money for a project you want to embark on. Then comes financial inclusion, which enables women to have access to any type of financial services including insurance, credit, payments etcetera,” she stated.
She further explained that the continent needs women-focused programmes like the Ellevate programme, which is designed for businesses owned by women, managed by women, businesses with a high percentage of female board members or employees and companies manufacturing products for women. “Ellevate helps women have access to capacity building, training for business, and finance access at specific prices. We have a network in more than 30 countries that women can rely on. As a member, you can enter any Ecobank branch with an Ellevate office and enjoy the women’s network there.
In a few years, Korede hopes to see an average African woman have access to resources, financial services and products that are easily accessible to her in her country or anywhere in Africa.
Advancing women’s equality is paramount globally and that is why it holds a spot on the United Nation’s Sustainable Development Goals for 2030. Advancing women’s equality could help the African economy by adding 10 per cent to its GDP, or US$316 billion by 2025.
