Experts recently discussed the links between digital financial services (DFS) and the development agenda in Africa at a panel discussion organised by the development bank and the Making Finance Work for Africa (MFW4A) Secretariat.
The talks highlighted that technology-based products and services had not received enough attention within the international development community.
It was observed that only four of the new Sustainable Development Goals (SDGs), which were agreed on by the United Nations’ 193 member states at the weekend, considered information communication technology as as solution for inclusive growth.
The AfDB called on African governments to stimulate competition in the market, adding that both national parliaments and governments had a key part to play in making financial regulations compatible with DFS development.
“African governments can be a major contributor to digital financial inclusion by building the trust of the populations in new payment networks,” the bank said.
Development agencies and donors also have a major role in supporting digital finance, the meeting heard.
“A wide range of sectors will benefit from using flexible payment platforms (SMEs, clean energy providers…). In humanitarian crises, mobile social transfers can help bypass corrupt administrative chains to directly reach beneficiaries and improve their livelihoods,” the bank added.
Alexander de Croo, Minister of Development Cooperation, Digital Agenda, Telecom and Postal Services of Belgium, told the meeting that digital financial services was “as a key driver of the formalisation of African economies.”
He said mobile phone subscriptions in sub-Saharan Africa alone had grown from 90 million to 650 million over the past eight years.
But barriers such as the lack of standardised products, the inability to use and exchange information between different countries and technologies and inappropriate legislation continued to limit the potential market growth.
Successful strategies would need a multi-sectoral approach, involving policymakers, infrastructure providers, services and payment providers, and customers, de Croo said.
