Vice President Mahamudu Bawumia says Ghana is witnessing growing interest from Investors in Fintech and technology startups.
“…we are witnessing a growing interest from investors in Fintech and technology startups. This influx of capital highlights the potential of the industry and the confidence Investors have in its future.”
The Vice President made this known in a keynote address at the 3i Africa Summit in Accra on Tuesday, May13, 2024.
The Vice President continued that the story of technology in Africa is also equitably fintech story, with a majority of Africa’s 10+ unicorns being fintech businesses.
Investment Landscape and Future Growth
The Vice President highlighted the growing interest from investors in Fintech and technology startups in Africa, noting that 40% to 60% of venture capital funding was channelled towards fintech startups from 2021 to 2022.
He underscored the sector’s potential for driving tangible growth, creating jobs and fuelling economic development across African economies.
“Africa’s financial services market is poised for significant growth, projected to expand at an annual rate of approximately 10%,” Dr. Bawumia stated, emphasising the continent’s digital readiness and the immense potential for technology and fintech innovation.
The Vice President delved into the rapid growth and innovation observed in Africa’s Fintech industry over the past decade.
He highlighted key drivers such as technological advancements, rising mobile phone penetration and a youthful population eager to embrace digital financial services.
“In the last three decades, African nations have undertaken significant reforms in the formal sector, leading to increased economic stability and predictable growth rates,” Dr. Bawumia remarked, underlining the progress made in macroeconomic management and trade openness across the continent.
Transformative Impact of Fintech on Africa’s Economy
Dr. Bawumia further emphasised the transformative impact of Fintech on Africa’s economy, citing projections of online sales reaching $75 billion by 2025.
He noted that the fintech sector’s role in facilitating digital payments and e-commerce growth spotlights its significance as a catalyst for economic development and financial inclusion across Africa.
“The evolution of consumer purchasing habits in Africa, influenced by fintech innovations, reflects the continent’s dynamic economic transformation,” stated the Vice President, highlighting the pivotal role of digital financial services in driving economic growth.
Mobile Phone Usage and Telecommunications Growth
The Vice President pointed out the rapid growth in mobile phone usage and the telecommunications sector in Africa as major catalysts driving the fintech revolution.
He noted that Africa is home to over 489 million mobile phone users, with projections indicating a rise to 700 million by 2030.
“This proliferation of mobile connectivity has created an ecosystem ripe for fintech innovation,” Dr. Bawumia observed, highlighting how telecommunications infrastructure expansion is democratising access to financial services and unlocking economic opportunities across underserved communities.
Dr. Bawumia discussed the surge in tech startups across Africa, particularly in the fintech sector, and highlighted the challenges posed by regulatory ambiguity.
He noted that regulatory uncertainty can hinder growth and deter investments, emphasising the need for proactive regulatory frameworks that balance innovation and consumer protection.
“Some African countries, such as Ghana and Rwanda, are taking proactive steps to foster Fintech innovation, while ensuring regulatory compliance,” remarked the Vice President, citing the introduction of regulatory sandboxes as a conducive environment for startups to experiment and refine their offerings.
Call to Action
Vice President Bawumia also emphasised the pivotal role of responsible innovation, collaboration among stakeholders and investment in talent and technology. He called for a balanced approach that pushes technological boundaries while ensuring ethical considerations and regulatory compliance.
“We stand at a pivotal juncture in the evolution of the Fintech sector in Africa,” Dr. Bawumia remarked, expressing optimism about the sector’s potential to drive economic growth, foster financial inclusion, and improve lives globally.
The conference concluded with a commitment from attendees to collaborate and advance the Fintech industry globally, building a resilient and inclusive ecosystem that drives innovation and inclusive growth.
