Insights from AfricaNenda's Pre-Project Support Journey: Six Key Lessons
by Akinwale Goodluck, Deputy CEO, AfricaNenda - 7 August 2023
The past two years have been an exciting and rewarding period for AfricaNenda as we help to advance the development of instant and inclusive payment systems that can make a difference for the 350 million financially excluded adults in Africa. An effort on this daunting scale, encompassing a diversity of needs across many countries and regions has many aspects and many stakeholders; we've found that this challenge presents a wealth of opportunities to make a real impact and to convert lessons learned into new possibilities.
Seizing Opportunities for Impact
The opportunity pipeline for AfricaNenda is significant and continues to grow, with more central banks, regional economic communities, government agencies, and private sector stakeholders embracing interoperable, low-value, high-volume, 24/7 available, instant, and inclusive payment systems.
The Rwanda Project: In September 2021, AfricaNenda embarked on a partnership with the Rwanda Information Society Agency to support Rwanda's digitization efforts and accelerate the implementation of an instant and inclusive payment system. Because the government had already made substantial investments in digital infrastructure, literacy and adoption, Rwanda presented an ideal opportunity for AfricaNenda. We provided catalytic funding and dedicated resources to support a proof of concept developed on open-source technology. The success of this collaboration led to expanding the project's scope to support the development of an in-house instant retail payment system, thanks to additional funding secured from the Bill & Melinda Gates Foundation and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). This project building and working with local capacity can generate openings for new opportunities.
The COMESA Business Council Project: As part of our commitment to empower micro, small, and medium-sized enterprises (MSMEs) in the Common Market for East and Southern Africa (COMESA) region, AfricaNenda provided catalytic funding to the COMESA Business Council. This support facilitated the development of a policy framework and business case modeling for a regional digital payment scheme tailored to the needs of MSMEs. With our expertise in resource mobilization, we assisted in securing a substantial grant from the Bill & Melinda Gates Foundation for strengthening the technical and policy infrastructure for MSMEs’ inclusive participation across eight COMESA countries and for the cost of integrating payment systems across two COMESA countries.
Key Insights and Lessons
In just 24 months of implementation, AfricaNenda's preproject support has led to significant advances in promoting financial inclusion and digital transformation across Africa. We have learned valuable lessons that have shaped our approach, strategies, and partnerships:
- Executive Sponsorship is Key: We’ve discovered that gaining support at the highest levels of government and central banks is fundamental to the success of implementing instant and inclusive payment systems. Endorsement and collaboration with key stakeholders, including switching companies, digital financial service providers, and mobile network operators, are critical for successful project deployment.
- The Power of Local Expertise: In our pursuit of empowering communities, we’ve realized that involving local software developers and system integrators is a game-changer. Their participation ensures solutions are tailored to the unique needs of the region, enhancing the project’s success and sustainability.
- Customization Over One-Size-Fits-All: Africa is a diverse continent with unique challenges and opportunities at the local, regional, and pan-African levels. We've learned that avoiding a one-size-fits-all approach is essential to accommodating sovereign interests and delivering effective digital financial services solutions that resonate with different populations.
- The Importance of Data: One of the major challenges we encountered was the lack of comprehensive data on the African payments’ ecosystem. We've come to realize the significance of investing in robust data collection and analysis to inform decision-making and drive impactful initiatives.
- Catalytic Funding for Initial Engagements: Early project stages often require catalytic funding to kick-start initiatives and build momentum. We've seen the power of providing financial support in the early phases to drive successful outcomes.
- Post-Deployment Support for Sustainability: Our commitment extends beyond project deployment. We’ve realized that providing post-implementation support ensures the longevity and success of pre-project investments made by our partners and development organizations.
Moving Forward: Embracing a Bright Future
AfricaNenda envisions a future where digital financial services unlock transformational possibilities across Africa, operating seamlessly at domestic, regional, and pan-African levels. Over the next 12 months, AfricaNenda will embark on several proofs of concept in countries across West, East, and North Africa, underpinned by a robust foundation of digital payment infrastructure and digital public goods.
As we transition from proofs of concept to full-fledged project implementation and delivery, the future holds even greater promise. AfricaNenda is fully committed to driving pre-project initiatives in collaboration with various countries and regional economic communities spanning Central, East, North, and West Africa. Our collective focus will be on developing strategies, payment schemes, and rules to support regulators and switches in effectively scaling up digital payments across the continent.
To achieve scalable impact and enhance financial inclusion, we are particularly focused on advancing merchant and government bill payment systems, as well as facilitating government disbursements to citizens for social support. Additionally, AfricaNenda foresees substantial growth in accessible, real-time, or near real-time cross-border payments, fostering economic growth and financial empowerment for individual traders, MSMEs, enterprises, and governments throughout Africa. Together, we are shaping a brighter future where digital financial services become a catalyst for prosperity and opportunity for all Africans.