This article was contributed to TechCabal by Noel K. Tshiani, founder of the Congo Business Network.
As technology is the most important issue of our time, public and private institutions in Francophone Africa need to put technology at the centre of their economic development strategies.
Startups, large companies, and governments in Francophone Africa will benefit from recognising that using cutting-edge technologies will increase efficiencies and reduce waste, thereby leading to higher economic output on the horizon.
Developing the fintech sector needs to be a priority for governments in Francophone Africa, especially in sub-Saharan countries where rates of financial inclusion tend to be low. 90% of retail transactions in sub-Saharan Africa are cash-based. And traditional bank branches are extremely expensive to expand and operate, not only in the capitals but also in the rural areas where roads and transportation networks are extremely underdeveloped.
Fintech startups and mobile money operators are the keys to ensuring that the maximum number of people in Francophone Africa get access to financial services. However, to develop a robust fintech environment in the region, central banks need to work closely with fintech entrepreneurs and telecommunications companies to address any relevant concerns that hinder the success of fintech solutions.
A good example is how the Central Bank of Congo, the Bank of Central African States, and the Central Bank of West African States work to regulate fintech startups and mobile money providers in the 15 countries they cover.
The Central Bank of Congo has the authority to regulate fintechs in the Democratic Republic of Congo, the world’s largest French-speaking country by its population of 100 million residents.
The Bank of Central African States, based in Yaounde, has regulatory authority for fintechs in 6 countries. They include the Republic of Congo (Brazzaville), Central African Republic, Gabon, Equatorial Guinea, Chad, and Cameroon. The total population of these 6 countries is approximately 51 million.
The Central Bank of West African States, headquartered in Dakar, is responsible for regulating fintechs in 8 countries, namely Guinea-Bissau, Mali, Ivory Coast, Togo, Benin, Burkina Faso, Niger, and Senegal. The combined population of these 8 countries is about 130 million people.
With a combined population of 281 million people, Francophone Africa represents close to 22% of Africa’s population of 1.3 billion people.
Prioritising technology, and more specifically the adoption and growth of fintechs, can be done in two ways. If these three central banks can work together to put in place a common fintech license, it will be easier for fintech startups in the region to expand from one country to another without facing unnecessary delays in getting new licenses required to operate legally in the different countries.
The second area of collaboration for the 3 central banks involves taking common initiatives that boost the visibility of startups in Francophone Africa in the media. These initiatives will assist startups in attracting investors that traditionally go to English-speaking countries such as Nigeria, Kenya, Egypt, or South Africa.
With these two ideas as examples, prioritising technology will boost economic growth in Francophone Africa.