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Overview of Fintech in Africa in 2020 and Predictions For 2021

What will fintech in Africa bring in 2021? The ongoing pandemic, as in the rest of the world, is expected to continue to play a large part in the global economy. Despite that, fintech will have its own unique aspects.

The Fintech Times takes a look back at 2020 in Africa and asks what 2021 will hold.


Unfortunately, many African economies as a whole will contract, as far as gross domestic product (GDP) due to the pandemic, following similar trends that the rest of the world face. In the latest World Economic Outlook (WEO) forecast, the International Monetary Fund (IMF) estimates a contraction of 4.4% in the global economy for this year.

2021 will be seen as a recovery period for the global market. There has been hope through vaccine breakthroughs but that will depend on logistics, availability, and acceptance. Many developed nations have purchased and/or preordered vaccines, which is already forecasted to put African countries and other developing nations at a disadvantage as far as operating back to a level of normalcy and help aid in economic recovery.


The African Continental Free Trade Agreement (AfCFTA) will be implemented beginning January 2021
The African Continental Free Trade Agreement (AfCFTA) will be implemented beginning January 2021 IMAGE SOURCE GETTY

Despite that, COVID-19 or non-COVID, there are positive outlooks for the African continent for economic development to continue in the new year. National economic development strategies, which aim generally to boost economic growth and job creation, have been ongoing despite the challenges of the pandemic and this looks to continue into the new year. Their strong components of digital transformation only has accelerated due to the effects of 2020. For instance, in Egypt, Egypt Vision 2030 this year still progressed with its implementation and this has included significant announcements in the financial services sector. This includes the likes of the country’s new banking law, helping regulate the performance of the Central Bank of Egypt (CBE) and the banking sector as a whole, which has a strong component in the fintech space.

Other examples include regulatory sandbox developments such as in Angola, which is a country also looking to diversify its economy; in its case it is a major oil-producer; Portuguese innovation advisor Beta-i is helping Banco Nacional de Angola to create an experimental regulatory environment for fintech. Also, The Bank of Ghana announced a fintech and innovation office this past summer.

2021 will most likely see further developments from efforts in 2020 and prior in the wider economic development in the fintech space with countries such as Nigeria, whom this year the Central Bank of Nigeria (CBN) released for review by stakeholders, a draft framework for a regulatory sandbox. Another example is in 2020 the South Africa Reserve Bank has established a new fintech innovation hub, in collaboration with several other government agencies with an intergovernmental fintech working group (IFWG); 2021 will see interesting progress in that new support mechanism for South African fintech.

In addition, emerging fintech hubs, which include the emerging four of Nigeria, Kenya, South Africa, Egypt but also Mauritius, Ghana, Rwanda, Uganda and Tanzania to name a few (the ladder who just signed a mutual agreement with Singapore that will see the two countries work closely to strengthen financial inclusion through digital innovation), will likely further accelerate their status as key fintech hubs in Africa.

To note, in terms of international trade & investment, the African Continental Free Trade Agreement (AfCFTA) will be implemented beginning next month. From a high-level overview, the World Bank highlights that the 55 member nations of the African Union with their populations of over 1.3 billion people would have a combined gross domestic product (GDP) $3.4 trillion. A key aim for free trade agreements globally is the reduction of bureaucracy to help facilitate trade between member countries and this applies as well to AfCFTA. Other benefits include that AfCFTA will increase Africa’s exports by $560 billion, which would come mostly from manufacturing. Also, it is estimated that 30 million Africans would be lifted out of extreme poverty, boosting the incomes of almost 68 million other Africans living less than $5.50 a day. 2021 will most likely see increase in trade and investment flows across AfCFTA member states, which can include a growth not just in fintech but wider tech and knowledge-transfer and collaboration.


Africa’s immense size both population-wise and geographical does not do it justice when trying to sum up much of the various fintech ecosystems that are developing to help create an environment and innovative place to foster it. However, 2021 will continue to see various support mechanisms both grow and be created to cater to the needs of fintech. Much of the technology, including fintech, comes out of organic need and solutions rather than disrupting the current landscape as say, in the United States. Therefore, the various support mechanisms will be both unique to Africa yet be those that any fintech ecosystem needs.

Those that have been active in 2020 and will most likely continue to do so are key fintech, financial services and wider tech hubs, accelerators and associations such as the following: Flat6Labs (Egypt), Egyptian Fintech Association, Fintech Egypt, Africa Fintech Network, Nigerian Fintech Association, Mauritius Fintech Hub, Kenya Bankers Association (KBA), Alphacode of South Africa, Laboratório de Inovação do Sistema de Pagamentos de Angola (LISPA), Digital Lenders Association of Kenya (DLAK), African Women in Fintech & Payments (AWFP), Rwanda Fintech Association and Blockchain Association of Uganda – to name a few.


A significant proportion of Africans remains unbanked and fintech solutions can help fill that gap
A significant proportion of Africans remains unbanked and fintech solutions can help fill that gap IMAGE SOURCE GETTY

MSMEs will continue to appear in the new year as it has done both in pre and even during COVID-19 times, as fintech solutions is much needed in a continent where a significant proportion are not only unbanked but there are still 800 million Africans without even internet and the poverty rate at 2015 was still at over 40 per cent.

A story stemming out of the continued need for fintech solutions despite the pandemic was in Uganda with SafeBoda, a motorcycle (‘bodaboda’) taxi-hailing app that recently launched an e-commerce platform by connecting market vendors with customers, a result of Uganda going on lockdown.

For instance, a report by McKinsey highlighted that the past three years, fintech investments in Nigeria grew by 197%, with the majority of investment coming from outside the country. There has been a multitude of innovation from fintechs in product development, designing product and services to cater for the needs of millions of Nigerians and in turn fuelling the growth of e-commerce. Despite that, 40% of the country’s population is still unbanked.

In addition, another challenge that much of African entrepreneurs face as is much of the rest of the world is access to finance – whether it be through banks, grants and other means. Saying that, 2021, as what recent memory is showing programmes and other incentives from organisations such as the African Development Bank (ADB), World Bank, African Union, United Nations (UN) – to name a few – that have been helping boost entrepreneurship empowerment, such as with the youth and women.


Africa had various headline cross-border transactions in fintech, where there were prominent acquisitions that happened of popular African solutions. For example there was Nigeria’s Paystack, which was acquired by US-based Stripe for $200 million as well as Dubai-headquartered Network International buying Nairobi-headquartered DPO Group. As African know-how and its growing innovations continue to attract attention globally, 2021 and beyond will most likely see more discussions of potential mergers and acquisitions.

African know-how and technology was also celebrated across much of the wider Middle East and Africa (MEA), where Egypt’s Fawry become the first fintech unicorn in Africa this year with Saudi Arabia’s stcpay (for the Arab-speaking world). 2021 and beyond can see other future unicorns or MPesa successes coming out from MEA or at least on the path to becoming one.

Islamic Finance will continue to play a larger role in the wider global economy. Africa, home to millions of Muslims and a growing Islamic Fintech industry, will also have fintech encompass much of that. With Africa, there are more than 80 Islamic financial institutions in Africa. Established banks have increasingly set up Islamic departments where they provide Sharia-compliant products which include: Absa Bank of South AfricaEcobank Chad and Sterling Bank Plc of Nigeria.

Despite much of Africa being unbanked, African banks do play a large part in the continent’s economy, where The Top Ten Largest Banks In The African Continent had a value combined (in terms of assets) of $600 billion. 2021 and beyond will see much of African banks play a bigger part in their own digital transformation and adopting various fintech solutions.

For example, as is happening in much of the world such as in the UK, particularly in London, challenger banks and neobanks have appeared, causing for much of the banking industry to either launch their own solutions as well.  For those who are unbanked, as what MPesa has shown, 2021 can showcase further solutions to help Africans solve daily needs, particularly if it is mobile – whether to make payments or to wire and receive remittances to even lending.

2020 was a busy time for the African continent and 2021 will continue that trajectory and hopefully accelerate in a world that will no longer have to have the pandemic affect our daily lives.


  • Executive Economic Development Advisor (Emerging Markets) | Contributor

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