VERNEBABBAGEand ASSOCIATES
Overview
� Demystifying Africa
� Benchmark Africa to some of the world leading economies
� The evolution and growth of technology within Africa
� Provide a view of some of the regulatory requirements and risks
� Highlight opportunities that exists
� Closing
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2
The Perception
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3“Africa, thought be one of
the darkest places on the
planet…”
The Reality:
• Africa has been the second
fastest growing region in
the world over the past
decade
• 40% of Africans have some
secondary or tertiary
education
• By 2035, Africa will be
poised to have the largest
labour force in the world
• Africa contains 60% of the
worlds cropland and has
the ability to improve
agriculture for the world as
well as reduce
unemployment
Africa Is Growing at a Rapid rate
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4
China ‘14 GDP
Growth = 7.3%
South Africa and
Neighboring
country Average
‘14 GDP Growth
= 5.4%
India ‘14 GDP
Growth = 5.0%
Kenya‘14 GDP
Growth = 5.4%
USA‘14 GDP
Growth = 2.5%
Nigeria ‘14 GDP
Growth = 6.3%
Source: GDP rates: www.eiu.com
7 Of The Worlds Fastest Growing Economies Are In Africa
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5Source: Oxford Economics & The Economist
Growth Sectors
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6 - 5 10 15 20 25 30
Tourism
Utilities
Construction
Real Estate, Business Services
Financial
Public Admin
Other Services
Manufacturing
Transport and Telecommunications
Agriculture
Wholesale and Retail
Resources
Proportion of GDP
Africa's Growth is widespread across sectors
“The financial industry is the second fastest growing sector in Africa, and as such the opportunity needs to
be capitalised on…”
7.1%7.1%
6.8%6.8%
5.5%5.5%
7.8%7.8%
4.6%4.6%
6.9%6.9%
3.9%3.9%
8.0%8.0%
5.9%5.9%
7.5%7.5%
7.3%7.3%
8.7%8.7%
CAGR (5 Years), %
Source: Amethis Finance
The Potential Exists
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7“Africa has the second highest population to capitalise on. Since Africa is has the highest density
of 0-25 year old population, it makes technology adoption even easier…”
Source: CGAP and World Bank Group
1.0 billion potential
0.9 billion
potential
1.2 billion potential
0.1 billion potential
0.3 billion potential
Internet Growth
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8Source: www.pingdom.com
• The worlds internet
population has
grown over 5 years
by 97%
• But…internet users
in Africa have
grown TWICE as
fast as the world
and is growing
faster then any
other country in
the world
What Customers Want
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9Source: KPMG
What Customers Want
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10Source: Accenture 2014
Branchless digital banking
Relationship driven banking rather than
transactional
Proactive recommendation of banking products and services
Real-time forward looking spending analysis
Current Initiatives
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1
“Originating accounts and
capturing customer documentation
using a mobile phone…”
2
“Agency or Community Banking
eliminating the need for big
branches
3
“frictionless payments through
omni-channel presence
4
“Digitalising payments through the
use of a mobile phone –
eliminating the risks associated
with cash whilst enabling customer
convenience…”
Banks Need To Advance On…
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1
“becoming truly omni-
channel by seamlessly
integrating customer
experience across in-
branch, assisted and
digital interactions”
2 3
“extend their ecosystem
by offering a greater
range of services…”
“offer digital
personalised financial
advice & counseling to
customers to manage
their financial needs…”
Africa Is Innovating…
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“Nigeria has just went on to
launch the first in Africa ID
card system, that removes the
need for bulky paper based ID
documents. Customers can
also use this card ID to make
payments…”
“The Botswana government is
pushing the economy to make
municipality payments
electronically via government
portals opposed to waiting in
queues and paying in cash…”
Source: www.forbes.com
35 Innovation Hubs in Africa
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14Source: @mHealth_Africa
Some Examples
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1
“
“mobile devices are used to
originate and capture the customer
documentation (i.e. application
form and KYC documents)…”
2
“mPESA offers Agency
banking where
customers can send cash
to mobile wallets…”
Regulations Play An Important Role
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Tax Laws
Each country
has governing
tax laws like
withholding
tax
Payment
Processing
Many in-
country
payment
switches
regulate that
payments
must be
processed and
settled locally -
costly
Liquidity
Requirement
& Fees
Onerous
capital
requirements,
Customer Fees
are restricted
– cash
withdrawal
Digital
Goverment
Portals
Governing the
electronic
purchase of
utilities such
as electricity
EMV & Transit
Certain
countries are
regulating the
rollout of CHIP
cards as well as
interoperable
transit payment
mechanisms
“The opportunity exists within Africa but true success means fully understanding regulatory
requirements to enable delivery”
Some Business Requirements
� End-to-End Mobile Banking Platforms
� Security and Fraud Management technologies
� Managed services – hardware distribution and value chain
management – businesses do not have the technical skills and
infrastructure to support
� Facilitating interoperability of multiple third party products; e.g.,
wallets and retail platforms
� Monitoring tools; technology, business and consumer experience
� Consumer tools; e.g., budgeting, spend analysis, predictive
� Customer Intelligence Tools and Advanced Customer
Experience through data driven strategies
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The African Landscape
� Considerations
� Unique business cultures in each country
� On the ground support structures are required
� Strategic local partners are a neccesity
� The Opportunity
� 53 Countries
� Over 1000 Banks
� Mobile driven aspirational society
� Low base, Significant market growth opportunity
� The will to embrace financial inclusion
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Africa: The Opportunity
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THANK YOU!