Experts: Technology Adoption Will Enhance Development, Growth of AfCFTA

Experts: Technology Adoption Will Enhance Development, Growth of AfCFTA

Emma Okonji

Technology experts have stressed the need for collaboration among government, policy makers, the banks and Financial Technology (FinTech) players, in order to adopt the right technology that will enhance faster market development and growth of the African Continental Free Trade Area (AfCFTA).

The experts who spoke at the Techgrind Africa virtual event organised by Summitech Computing Limited in Lagos recently, said such collaboration would help AfCFTA to contribute to the strengthening of African currencies, through the use of different technology solutions to navigate procurement, payment, logistics and communication, during trade transactions.

Panelists at the virtual event, focused their discussions around the theme: ‘What Opportunities Does AfCFTA Hold for the Tech Sector in Africa?’

According to the experts, the success of AfCFTA would largely depend on technology to achieve its goals.
They were of the view that the involvement of major technology industry players would facilitate Pan-African competition, as industry players would incorporate the opportunities that the agreement brings, into immediate plans and also take advantage of them to expand trade.

During the panel session, the MD/CEO Summitech Computing Limited, Adekunle Kunle-Hassan, said technology would be a major driver for AfCFTA.

According to him, “Business movements such as mergers and acquisitions and funding from venture capitalists, will drive expansion of the thriving tech brands into major participating markets. Therefore, there has to be a heightened interest of major players in the tech space as this agreement is pivotal to its success. If there is a better time to start thinking of positioning to reap its gains, it is now. However, policy makers and technology companies in major markets need to partner and create an understanding of policies and operations to enable and support cross-border trade.”

The African Union (AU) in collaboration with African Export-Import Bank (Afreximbank) is to develop an Africa-wide digital payment system and this platform will help to domesticate intra-regional payments, Kunle-Hassan, further said, while emphasising the role of independent FinTech players in servicing merchants.

Head of Business Operations at Kudi, Timilehin Ogunyemi, said: “The FinTechs will bring innovation to the Pan-African payments and settlement infrastructure. The current relationship between banks and FinTech will replicate itself in this case. Banks will still hold money, as settlements in itself is definitely not instant, but the numbers will move instantly among customers. The system creates an enabling environment for FinTechs to come in and facilitate payments.”

He said while the AU and Afreximbank were focused on building the infrastructure that determines what exchange rates would be across African countries, the FinTechs would facilitate the actual payment platforms that would ease the exchange of money during transactions.”

Equity Research Analyst at CSL Stockbrokers Limited, Ayodeji Ajibare, said economies across Africa would be reshaped as some sectors would be phased out while some sectors would become key sectors. He predicted that a major sector that would still be key to the African economy in the wake of the agreement, would be the Fast Moving Consumer Goods (FMCG) sector. “Logistics, Telecommunications and Financial services like Insurance, will thrive as traders will need insurance policies for the cross-country movement of goods. But technology will be a platform upon which all these sectors will stand upon to operate,” Ajibare said.

TechGrind Africa is a virtual event organised by Summitech which discusses evolving trends and the impact of government policies on the players in the African tech space and economies.

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