As the sound of the vuvuzelas fade
into the background following the completion of South Africa’s
World Cup party, the world’s eyes have turned to Africa’s rich
economic potential.
The continent was the only global
region other than Asia-Pacific not to slip into recession during
2009, and its economies are starting to become safer and better
regulated (see Nigeria country survey: Making headway in
Nigeria).
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While the continent’s wealth of
resources are well known, countries like Nigeria, sub-Saharan
Africa’s biggest economy after South Africa, are starting to
develop a more service-oriented economy. And hand-in-hand with
economic progress comes the need for a solid and well-functioning
payment infrastructure.
CI is focusing on two
economies, Nigeria and Kenya, in this and its next edition –
countries it expects to become focal points in the challenge to
bring electronic payments to millions of unbanked people on the
continent.
Card products across Africa have
been available to too few people for far too long and the battle to
replace cash has suffered as a result. In Nigeria, as our research
shows, there are an estimated 300,000 credit cards, 26.8m debit
cards and 8m prepaid cards in issue, a country with a population of
141m. Clearly there is room for improvement and the technology now
exists, via prepaid cards and mobile phones, to allow hundreds of
millions of people across Africa to gain access to basic financial
services.
MasterCard expects the Asia, Middle
East and Africa region to be generating an annual gross dollar
volume of $146bn, compared to $156bn in Europe, $81m in Latin
America, $15bn in Canada and $442bn in the US.
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By GlobalDataThe challenge for prepaid and the
traditional payments industry more generally in Africa is
acceptance. There needs to be major investment for payment systems
to be more efficient, but as has been seen in countries across the
world, where electronic payments systems develop, economic growth
moves hand in hand.
Another key player in developing
Africa’s payment industry will be telcos. The breadth of mobile
coverage across the continent suggests there is even an opportunity
for the payments industry to leapfrog physical card acceptance and
move straight to mobile payments. Mobile phone operators MTN, whose
Mobile Money m-payments product now has more than 1m subscribers
(mainly in Uganda), and M-Pesa, a Kenyan money-transfer service
owned by Vodafone and Safaricom, are likely to be major players in
this space.
