With its mass adoption of new technologies, Africa has the opportunity to create the next disruptive startups and the global leaders of tomorrow.
The effects of the fourth industrial revolution in Africa have been taking everyone by surprise. While all eyes were turned to the US, Europe, and China, Africa was silently growing much faster than anyone anticipated, especially in financial technologies.
The combination of mass adoption of recent technologies in the region, without big monopolies nor outdated infrastructures, creates a never-seen-before opportunity for Africa to create the next disruptive startups and the global leaders of tomorrow.
While the US is busy maintaining a monopolistic financial system, built on old infrastructures and outdated technologies, Africa has the opportunity to build something better, faster, and stronger, without the massive technical debt the US is facing. With many people lacking access to a bank account, Africa has become a mobile-payment first continent, leading the way, just like China does, in that front.
In a ripple effect, the African mobile-payment and fintech ecosystem have unlocked other fields and markets, like e-commerce, which is also rising very fast. So much so that Africa has now the biggest potential for e-commerce in the world. The economic expansion and rising mobile internet penetration rates have created Jumia, its e-commerce giant.
While not being profitable yet, the growth of the company is explosive, and it has the potential to turn into an e-commerce behemoth like Mercado Libre in Latin America. While Jumia has many critics, what everyone can agree on is that Africa created a champion in e-commerce that Europe was not able to create. This is a strong sign that Africa not only has a huge potential, but has already started to beat other continents in various fields.
Jumia is far from being the only success of the African startup ecosystem: in October last year, the US-based startup Stripe announced that it would be acquiring Paystack, a Nigerian payments platform for more than $200m. Egypt’s fintech startup Fawry is worth over $1bn, while WorldRemit, a UK online money transfer company, has acquired the African fintech startup Sendwave for more than $500m last year.
Flutterwave (Nigeria), Mergims (Rwanda), SawaPay (founded in Kenya), and many others form a very fast-growing ecosystem of African fintech champions. And Jumia also processes payments with its own service, Jumia Pay.
Read our special report on fintech in Africa
Africa leads in the new world of finance
The African Fintech ecosystem also includes the development and use of cryptocurrencies. Bitcoin has become popular in many African countries, as a cheaper solution to sending money across borders. In Ethiopia for instance, ProjectMano has been trying to push the government to consider mining and storing Bitcoin to combat the rising inequalities & global inflation. While in the US, many politicians call Bitcoin a scam and China is banning cryptocurrencies, in Tanzania, President Hassan urges the country’s central bank to prepare for cryptocurrencies.
Earlier this year, the central bank of Nigeria issued a circular warning banks and financial institutions that “facilitating payments for cryptocurrency exchanges is prohibited” and that they needed to identify and close accounts associated with them. It didn’t work. Despite this banking ban, Nigerians have built a pan-African financial settlement layer using Bitcoin and today, 32% of Nigerans are either using or owning cryptocurrency. More people use Bitcoin in Nigeria than they do in the US.
