Views
10 months ago

African Business 2022 Q1

  • Text
  • Africa
  • Wwwglobalafricanetworkcom
  • Sector
  • Geoscience
  • Renewable
  • Countries
  • Climate
  • Hydrogen
  • Exploration
  • Global
  • Lesotho
  • African
A unique guide to business and investment in Africa. The third issue of African Business marks a departure for this respected guide to business and investment on the continent. The first two journals were published in 2020 and 2021 but as of 2022, African Business is a quarterly journal. Every edition will carry editorial copy that will cover the following general topics, with a wide range of subjects within the broader economic sector: energy; mining and exploration; trade; finance; technology and tourism. In addition to this, special features on topical matters will be published periodically, along with country profiles.

FINANCE AFRICA IS

FINANCE AFRICA IS PERFECTLY PLACED TO TAKE ADVANTAGE OF NEW PAYMENT SOLUTIONS Digital payment options in Africa present a massive development opportunity. The shift to a contactless ecosystem is also accelerating the de-cashing of the economy and has primarily been led through mobile. The CEO and founder of Ozow, Thomas Pays, explains how Africa is perfectly primed to leapfrog and quickly adapt to new technology. D ABOUT OZOW Thomas Pays Ozow provides easy, fas and secure payment solutions for everyone, from QR codes, point of sale, eCommerce, e-billing, peer-to-peer payments, and everything in between. Ozow has experienced rapid growth and has attracted millions of transacting consumers and merchants in the South African market alone. Among many of its merchants are household names such as Takealot.com, Uber, FlySafair, MTN, Vodacom, Makro and Netflorist. Ozow currently operates in South Africa and Namibia. Find more information at www.ozow.com Digital innovation has evolved payments solutions at breakneck speeds. Everything from contactless payments and QR codes to digital wallets, consumers today have many new ways to pay. The big challenge is to ensure that the millions of people who still use cash are able to access these services. “Unfortunately, cash still dominates as the main payment form for millions of South Africans,” says Thomas Pays, CEO and cofounder of Ozow. “This happens simply because of a lack of access to infrastructure, high data costs, and a general mistrust in financial institutions. All of these factors ultimately prevent many consumers from participating in the digital economy.” There is hope, though. A recently published South African Township Marketing Report found that while cash is still the preferred method of payment for many low-income earners, people in townships are open to alternative payment methods. “To better serve the needs of low-income communities, it is critical to develop solutions that work for them. For someone in a township, who largely makes peer-to-peer payments, digital payment solutions need to match what they will use them for,” Pays explains. Fuelled by the pandemic, there has been a rapid adoption and acceptance of these new payment methods. With concerns of the spread of the virus, the increased usage of contactless payments has also empowered people to transact securely from their own devices without any physical contact. The shift to a contactless ecosystem is also accelerating the de-cashing of the economy and has primarily been led through mobile. In fact, mobile payments and digital wallets are two of the most popular payment types globally, eclipsing cash transactions in 2020. Unlike developed countries with legacy banking systems, Pays explains that many countries in Africa are perfectly primed to leapfrog and quickly adapt to new technology. “We can see wider adoption because people don’t have to make any significant change from one system to the next. Without decades of legacy systems, we have a tremendous advantage in being able to do this,” he adds. The widespread usage of digital payments in various forms has also worked to resolve the historical disconnect between online and in-store pay points, where the ease of checkout has been a big issue. Pays says that retailers responded by integrating this technology into the point-of-sale systems, providing more ways for customers to pay for goods and services. 20 Innovation isn’t slowing down either. The introduction of e-wallets and invisible payments, like those used by Uber and Amazon Go, are providing people with a way to pay for goods and services without having to take any action. While traditionally these often required a credit card on file, this is being eliminated with the introduction of wallets and direct payment links to bank accounts through digital overlay services developed by fintechs. “With every new payment solution introduced, the most important thing to understand is that these are designed with the highest international safety and security standards to ensure that consumer and banking data is protected,” he adds. This future of payments is very exciting, says Pays. “With every new technology developed, the goal will always be to simplify people’s lives by making payments even easier, quicker, A recently published South African Township Marketing Report found that while cash is still the preferred method of payment for many low-income earners, people in townships are open to alternative payment methods. and more secure. At the rate that it’s evolving, we will easily get to a stage where wearable payment tech won’t require cards, batteries or an Internet connection.” “This innovation has one primary goal – to drive financial inclusion and access for everyone,” says Pays. Photo: by Mikhail Nilov from Pexels

SURVEY FINDS AFCFTA IS DRIVING OPTIMISM AMONG AFRICAN CEOS Attitudes to sectoral and country growth are upbeat. A ABOUT PAFTRAC The Pan-African Private Sector Trade and Investment Committee (PAFTRAC) unites African leaders from the private sector and provides a unique advocacy platform, bringing together the African private sector and African policymakers to support extra- and intra-African trade, investment and pan-African enterprise. PAFTRAC enhances advocacy and supports policy actions and recommendations of the private sector on trade and investment issues at the national, trade corridor, regional and multilateral levels The respondents expressed strong faith in AfCFTA. More than half of respondents (57%) also believe that the agreement will open up new markets to export regionally and provide the necessary frameworks to export more regionally (62%). A new survey of African CEOs from 46 countries conducted by PAFTRAC, the Pan-African Private Sector Trade and Investment Committee, has found that CEOs were confident that their businesses will grow in the next year. A majority are also optimistic about the economic outlook of their industry. In addition, 87% of respondents believe that there will be in increase in intra-African trade as a result of the African Continental Free Trade Area (AfCFTA). The CEOs believe that the global recovery, led by greater demand, will drive Africa’s economic recovery. Interestingly, their positivity stems more from their faith in international and regional trade strategies and agreements such as enhancement of trading opportunities through AfCFTA, than as a result of national economic recovery strategies like ease of lockdown restrictions or better national business climate. Commenting on the survey, Pat Utomi, chair of PAFTRAC, said, “The positive sentiment expressed by survey respondents demonstrates the potential of the AfCFTA and the eagerness of Africa’s private sector to take advantage of the market access opportunities it offers. However, access to trade information, trade-enabling infrastructure and trade finance emerged as key constraints that need to be addressed to ensure that intra-African trade opportunities are exploited for the benefit of African SMEs. TRADE “One major advantage of AfCFTA is that it can enable aggregation across borders so that African countries can pool products in volumes and quality that make them more competitive in global markets.” The respondents expressed strong faith in AfCFTA. Over 71% of respondents believe that the AfCFTA will encourage them to invest to grow their business regionally. More than half of respondents (57%) also believe that the agreement will open up new markets to export regionally and provide the necessary frameworks to export more regionally (62%). The four top export destinations in Africa are South Africa (27%), Ghana (25%), Kenya (25%) and Nigeria (19%). African CEOs said the key challenges they foresee, which will have a negative impact on Africa’s economic recovery prospects, are a lack of access to finance (64%), the ongoing impact of the Covid-19 pandemic on economic opportunities (61%) and a slowdown or lack of public sector investment and expenditure (48%). Though the appetite for regional trade is strong, a majority of respondents placed access to trade finance and access to investment capital as the two biggest constraints when trading regionally. • Distributed by African Media Agency (AMA) on behalf of PAFTRAC. The four top export destinations in Africa are South Africa (27%), Ghana (25%), Kenya (25%) and Nigeria (19%). Photo: Rafael de Campos from Pexels 21

Other recent publications by Global Africa Network: