The Opportunity of Africa – Growing Economic Powerhouse of the World
By 2050 Africa will play a vital role in contributing to the growth of the global economy. The continent’s population is expected to rise to over 1.7 billion in the next decade. Making it one of the youngest economies in terms of available manpower, growth sectors, and business opportunities. Although dependent on agriculture and minerals as the backbone across many of its countries, emerging businesses such as Financial Technology is one of the rising sectors.
Key Indicators of Growth in Africa
World Bank’s 2019 report underline the continent’s promise. Of the 10 fastest-growing economies in the world, 6 were in Africa— with Ghana at the top of the world ranking. In the Doing Business index, five of the 10 most improved countries are in Africa, and one-third of all reforms recorded globally were in sub-Saharan Africa.
Entrepreneurs and small to medium enterprises (SMEs) are slated to be the driving force across African countries for generating employment, innovations, and exports, thus providing a major thrust to new growth. Leading growth countries such as Kenya and Nigeria already employ over 75 percent of its population in the SME sector.
Financial Inclusion will play a crucial role
Access to finance and monetary resources will be crucial for Africa to achieve the desired growth. This has been evident from the fact that more global institutions are lined up to enter or have already set up bases in Africa. For providing loans, funds, initial seed capital and financial inclusion to the growing enterprises and people behind them.
Fintech is one of the leading sectors spanning the region in terms of making finance available seamlessly for enterprises and individuals.
Growing Need for Fintech in Africa’s Growth
- Urban Population: As witnessed in growing economies in the west, Europe, as well as in Asia especially China and India, there is a consistent movement of working population moving from smaller towns and tribes to larger cities for prospects. Africa is also undergoing the same with over 80 percent of Africa’s population growth over the next few decades will occur in cities, making it the fastest-urbanizing region in the world.
Simultaneously incomes are also rising, generating newer avenues of growth, spending, and most importantly reinvestment in businesses. Some reports estimate annual spending by African consumers and businesses to reach USD 6.66 trillion by 2030. Benefiting a wide range of sectors such as food, beverages, financial services, pharmaceuticals, education, and others.
Digital payments and loan management will play a crucial role in these sectors for fulfilling the new demand for capital and financial management.
- Rapid Industrialization: Global reports from leading government and private organizations estimate that the African continent is already undergoing a massive industrial revolution. Manufacturing and production from processed foods, automobiles etc., are at a growing pace. It is attracting investment as a low-cost region competing with the likes of China, Vietnam, India, Bangladesh, and other markets.
Information technology, digital & financial services focus towards Africa as a market is also gaining wider acceptance amongst businesses and consumers.
- Increasing mobile access, digital payments, and financial resources: Mobile data traffic across the African continent is expected to rise over seven times till 2022 from its current rate. The continent has more than 120 million active mobile money accounts, which makes it over 50 percent of the global total. This trend has given the financial technology sector a new role in terms of providing innovative services and loan management opportunities.
Access to finance, loan management platforms, digital payment solutions, has made Africa more productive in its emergence as a market. This has allowed many SMEs and entrepreneurs to become competitive, speed up transactions, and more importantly, provide finance especially loans to a wider population.
To truly leverage the opportunity of the African market, entrepreneurs, SMEs, and the government have to efficiently manage their investments from leading countries, funds, and banks. They also need to utilize globally benchmarked technology, foster local innovation, customization and most importantly adopt an effective platform to manage their business finance such as loans. Especially for enterprises as well for Africa’s consumers. These measures will lay the foundation for Africa’s rise as an economic powerhouse.
Note: FinoLane provides a customized & localized loan management solution designed for Africa’s growing companies in the financial markets. To know more please reach out to us at +91 9347016700, or write to us at (email): email@example.com