In an era where climate change and economic development are two of the most significant challenges facing the African continent, how can technology and financial innovation pave the way for a more resilient and prosperous future?
This episode of Tech Talks Daily delves into the heart of these issues with Funmi Dele-Giwa, General Counsel and Head of Governance, Risk & Compliance at MFS Africa, now steering the helm at Onafriq with a vision to revolutionize Africa's financial landscape.
Africa, despite its minimal contribution to global emissions, finds itself on the frontline of climate change's adverse effects. With extreme weather events becoming more frequent and severe, the need for robust climate adaptation and resilience strategies has never been more pressing. However, the continent's fight against climate change is hampered by a lack of adequate funding and a financial architecture that fails to address its unique challenges.
Enter Onafriq, a company poised at the intersection of financial services and technological innovation, aiming to make cross-border payments within Africa as seamless as making a local phone call. In this enlightening conversation, Funmi Dele-Giwa sheds light on the pivotal role that fintech and digital financial services can play in addressing both climate change and the broader economic challenges facing the continent.
From the Africa Continental Free Trade Agreement to the need for a climate-centric financial architecture, we explore the pathways toward enhancing intra-African trade and, ultimately, funding for climate adaptation and resilience.
The discussion doesn't stop at identifying the problems; it dives into the practical solutions that Onafriq and similar initiatives offer. By digitizing payments and addressing regulatory barriers, Onafriq is not just facilitating easier trade and financial inclusion; it's laying the groundwork for a more united African economy capable of tackling climate change head-on.
As Africa stands at a crossroads, the question looms: Can the continent leverage its vast potential to foster growth and resilience from within? Join us as Funmi Dele-Giwa shares her insights on how Onafriq's mission goes beyond financial transactions to spearhead a movement towards a more interconnected and resilient Africa.
Listeners, as we navigate these transformative ideas, what role do you see digital innovation playing in Africa's journey toward climate resilience and economic empowerment?
Share your thoughts and join the conversation on how technology can help bridge the gap between Africa's financial and environmental challenges.
[00:00:00] Can Africa transform its challenges into opportunities to not only advance its economic frontiers
[00:00:08] by leveraging technology but also address some of the pressing climate concerns that are
[00:00:13] impact in the region.
[00:00:16] Well today we're diving into a thought-provoking discussion with the General Council
[00:00:21] and Head of Governance, Risk and Compliance at MFS Africa which is now part of Honour
[00:00:28] And today's guest is bringing to the table an insightful perspective on how digital
[00:00:32] financial services and Fintech innovations can not only drive economic growth but also
[00:00:39] play a pivotal role in climate resilience right across the African continent.
[00:00:44] So my conversation today will explore the critical issues faced in Africa such as the disproportionate
[00:00:50] impact by climate change despite its minimal contribution to those global emissions
[00:00:56] and also learn more about the hurdles of intra-Africa trade exacerbated by borders and regulations
[00:01:03] and with the Africa Continental Free Trade Agreement in the spotlight.
[00:01:07] I also want to delve into how this pact will enhance trade within the continent potentially
[00:01:12] unlocking funding for further climate adaptation and resilience.
[00:01:17] But obviously this is a tech podcast too so we will navigate the landscape of digitisation
[00:01:22] of payments, the significance of government policies in adapting to the world of technology
[00:01:28] and fostering a thriving environment for digital financial services.
[00:01:32] And that mission of making cross-border payments as seamless as making a phone call which
[00:01:37] could be a game changer for financial inclusion and economic development across Africa.
[00:01:43] But before we get today's guest on I need to pay the bills we've got a huge podcast hosting
[00:01:48] feed to pay for when we're releasing 30 episodes a month and this month I've partnered
[00:01:53] with a company called Kiteworks.
[00:01:55] Now legacy MFT tools are dated and lack the security that today's remote workforce demands
[00:02:01] so companies that continue relying on outdated technology though they put their sensitive
[00:02:06] data at risk and in a world where digital threats evolve daily, the need for a secure modern
[00:02:12] solution has never been more pressing.
[00:02:14] While Enter Kiteworks the beacon of security and efficiency in managed file transfer
[00:02:19] and Kiteworks isn't just any MFT solution with its FedRAMM Modra authorisation awarded by
[00:02:25] the Department of Defence since 2017, Kiteworks sets a new standard for security and this certification
[00:02:31] is not just a badge it's a promise of unparalleled protection for your data.
[00:02:37] Offering a fast track to CMMC compliance and eliminating some of those cumbersome costly
[00:02:42] DIY authorisation processes that plague so many of the alternatives out there.
[00:02:48] So please step into the future of managed file transfer with Kiteworks you can find
[00:02:52] out more information at kiteworks.com to get started that's kiteworks.com to get
[00:02:58] you started today.
[00:02:59] Book a lop and hold on tight as I beam your ears all the way to London where today's
[00:03:04] guest is ready to share her story talking about overcoming the barriers I've just mentioned
[00:03:08] the role of FinTech in addressing climate goals and revolutionising the financial landscape
[00:03:13] of the continent.
[00:03:16] So a messy warm welcome to the show can you tell everyone this thing a little about who
[00:03:21] you are and what you do?
[00:03:23] Thanks Neil my name is Fumide Gua and I'm the general council and head of governance
[00:03:28] risk and compliance and group kind of community secretary at onafreek, formerly known as MFS
[00:03:35] onafreek is a pan-African payments company and we operate the largest pan-African payments
[00:03:42] cross-water payments platform on the continent connecting over 500 million mobile wallets to
[00:03:48] our network millions of bank accounts and operating across 40 African countries.
[00:03:55] And we provide our partners who are mobile network operators, remittance companies, banks,
[00:04:01] corporations and FinTechs with access to payment services in Africa into Africa and out
[00:04:10] of Africa.
[00:04:12] And we enable millions of Africans to send and receive real-time payments.
[00:04:18] And within the organization I'm the senior executive that is responsible for our legal
[00:04:23] and regulatory teams as well as our risk and compliance function and from a governance
[00:04:28] perspective our corporate secretary, corporate governance approach data governance, ESG
[00:04:35] and impact.
[00:04:37] So a pretty fault but for you.
[00:04:38] It really is and one of the reasons I invite you on the podcast today is to shine a light
[00:04:44] on the great work you're doing here because one of the things I try and do every single
[00:04:48] day on the podcast is get people thinking differently about how technology is empowering
[00:04:54] individuals all the world and a lot of places or a lot of instances where you don't automatically
[00:04:59] associate with technology.
[00:05:01] We will have people listening in over 160 countries right now and many people listening
[00:05:06] will be completely unaware that I think something like 1.4 billion adults in the world
[00:05:11] don't have access to a bank account so just to set the scene for our conversation today
[00:05:16] based on your insights and some of the discussions I was reading you've had at the COP28 climate
[00:05:21] summit.
[00:05:22] Why is there a pressing new need for new climate centric financial architecture across Africa
[00:05:27] and how could it address both the confidence development goals along with climate commitments
[00:05:32] because there's so much going on in this space right now isn't there?
[00:05:35] Yeah, there is and I think we probably the starting point is to understand that Africa
[00:05:41] is severely short changed when it comes to the climate discussion.
[00:05:46] Firstly, it's as a continent is disproportionately impacted by climate change and it has seen
[00:05:52] extreme weather conditions in the recent years occurring more frequently and wrecking more
[00:05:58] havoc across the continent and in 2022 alone in 10 million Africans were directly affected
[00:06:06] by climate and water and weather related disasters.
[00:06:10] So think about 110 million people across the continent.
[00:06:14] And that's despite the continent contributing to a little as little as 4% took global greenhouse
[00:06:22] gas emissions.
[00:06:23] So there's that just proportionality between actual contributions and impact and then secondly
[00:06:29] the continent is nowhere near prepared to withstand the effects of climate change.
[00:06:34] It doesn't have the funding to become adequately adapted to the different changes that it's
[00:06:41] seen in the floods that are coming, the typhoons and then there have been promises around
[00:06:48] financial commitments towards addressing this from developing countries but that hasn't
[00:06:54] come through.
[00:06:55] And that's the third issue because the continent only receives about 300% of global climate
[00:07:01] finance.
[00:07:03] So you have the digiastic impacts, you have the lack of preparedness and you have a couple
[00:07:10] that were in added but funding to actually help you get prepared.
[00:07:15] And though the ask now is can we start looking inward within Africa to find our own solutions
[00:07:22] here towards addressing these gaps in climate funding and that's where the question is
[00:07:29] now coming up from people are asking and I'm asking is there a need for climate sensitive
[00:07:34] like architecture, financial architecture for Africa by Africans?
[00:07:40] And before you came on the podcast today I was reading about the intra-Africa trade
[00:07:44] act and again for anyone listening anywhere in the world that are unfamiliar with this can
[00:07:48] you tell me a little bit more about it and also how it could be a almost foundational
[00:07:53] pillar for funding climate adaptation and also resilience across the continent.
[00:07:58] And also what steps need to be taken to maximise this potential because it feels like
[00:08:03] there's a real opportunity here.
[00:08:05] I agree, I agree and the starting point is to realise that any increase in African trade
[00:08:13] will be good because that has grown quite slowly just because of the pure mechanics of how
[00:08:20] Africa is.
[00:08:22] It is a continent of 54, 55 depends on who's counting countries.
[00:08:29] And intra-Africa trade is limited by the borders that exist within the continent in itself
[00:08:36] and just to give you a sense of how little it's grown.
[00:08:39] And 23rd revenue from this actor was at 98 billion, 2022 almost a decade later it's 102
[00:08:47] billion.
[00:08:48] This is despite the fact that you've had changes in innovation technology development increase
[00:08:55] in population increase in businesses but the continent is in trading with each other.
[00:09:01] And that's where the intra-Africa trade act comes in and the key thing that's been approached
[00:09:10] here is to look at ways to create a single economic market for goods and services and people
[00:09:19] within Africa and implement the African continental free trade area.
[00:09:26] The proposed projection means that we would like to increase intra-Africa trade by 81%
[00:09:34] by 2028.
[00:09:36] And that will turbocharge the growth that is needed in intra-Africa trade, it will improve
[00:09:42] the income that is earned by governments.
[00:09:44] And then again that will then add to the funding that is needed from a climate perspective.
[00:09:49] And so I think that's how the trade act will help.
[00:09:54] It will also then, I think there is also something that governments can look at and look into
[00:09:59] is whether they can establish climate linked trade facilities and guarantees as tools
[00:10:05] by which this can be facilitated and we can maximize the potential of intra-Africa
[00:10:10] trade because if you create an enabling environment and then you stimulate it by providing
[00:10:17] the funding that is needed or providing the encouragement that is needed, you are able
[00:10:22] to stimulate the sector in itself and facilitate the ability to maximize the potential that
[00:10:28] exists.
[00:10:29] And if we just zoom out just for a moment to understand the scale of the problem we're talking
[00:10:34] about here what would you say all the biggest financial and trade barriers currently hindering
[00:10:39] intra-Africa trade and also talking about the solution, how are you overcoming these obstacles
[00:10:45] to help facilitate that smoother transaction investment within the continent?
[00:10:50] Like I said previously Africa is a continent of many countries and this then means that it's
[00:10:58] a continent with a mismatch of regulation, some mismatch of currencies and ultimately
[00:11:05] different ways of doing business and so for one country doing business with another
[00:11:12] or conducting trade with another is pretty much the same as doing it with the UK or with
[00:11:19] China.
[00:11:20] So there's really no difference in some perspectives and that's what these barriers are, they're
[00:11:27] pretty much the same.
[00:11:28] Just think of it as existing in a place where you share the same landmass.
[00:11:35] You just have regulatory and physical borders which means added costs when it comes to
[00:11:41] taxes, levies, exchange controls, added costs when it comes to logistics and the movements
[00:11:48] of goods and services added cost when it comes to financing.
[00:11:52] And the African-Costental Financial Agreement like you mentioned is a way that they're
[00:11:57] looking to try to overcome these barriers to trade.
[00:12:01] But I think looking at this, there are a couple areas of improvement.
[00:12:06] We operate within this sector because we try to facilitate the movement of cross-border
[00:12:14] payments and so from that perspective we can see that these two areas are particularly
[00:12:20] key if you want to fuel trade.
[00:12:24] One is the digitization of payments period.
[00:12:27] A large way of African payments is still relatively cash-based and small and micro enterprises
[00:12:35] are the engine of most African economies.
[00:12:39] So the vast majority of that trade is conducted through informal, unconventional channels including
[00:12:45] physically traveling from one country across the border to buy something pay with cash
[00:12:52] and then carrying it back.
[00:12:55] And so if we can make it simpler and easier for the seamstress sitting in Lomé to sell
[00:13:02] how wares, to customers in Johannesburg and there is the ease of being able to make a
[00:13:10] payment across and then be able to send the things across because we have removed those
[00:13:16] barriers.
[00:13:17] We can bring that informal economy into the formal and begin to see the true figures
[00:13:25] of what the African, the various African country economies really are made up of.
[00:13:32] And then we can be into deliver added digitized financial services to these individuals
[00:13:39] and to these estimates and watch them grow.
[00:13:40] So digitization number one.
[00:13:43] And number two is, we've seen the exchange controls are a big thing when it comes to a trade
[00:13:51] international trade and central banks need to start speaking to each other more and coordinating
[00:13:57] more to address any trade hindering exchange controls and regulations so that they can put
[00:14:04] in place regulations that actually promote the use of direct trading of African currency
[00:14:11] pairs that are not pegged to the USD or there are no limitations on how their currencies
[00:14:18] interact because they've sat down to deliberately think about how their exchange control regulation
[00:14:27] can promote trade.
[00:14:29] So those are my two thoughts.
[00:14:32] And I'm curious from your perspective here, how critical is the role of government policy
[00:14:37] and fostering a conductive environment for digital financial services to thrive in?
[00:14:42] And it's specific policies that you'd recommend to maybe accelerate this fintech growth
[00:14:47] and its contribution to climate goals of course.
[00:14:50] Yeah, that's one that's near and dear to my heart.
[00:14:54] Regulation in policies are, government policies are central to developing a thriving digital
[00:15:02] financial services environment.
[00:15:05] They seem to significantly help drive innovation and they can stimulate growth and they can support
[00:15:11] companies in their quest to deliver innovative solutions.
[00:15:16] And so there has been a lot of growth I can say looking back over the years now there
[00:15:24] is much more dialogue with between regulators, governments and the fintech community.
[00:15:31] There is the beginnings and listen to the community when fintech was evolving.
[00:15:38] The view was you regulate them just as you regulate banks but then you begin to realize
[00:15:43] they're not quite the same and now they're putting in place regulation that's specific to
[00:15:48] the sector which is good.
[00:15:50] License regimes and sandboxes are being introduced to encourage new technology to come in
[00:15:58] and test things out and if it works you can then launch and they put in place a licensing
[00:16:03] regime and some kind of super visory regime that works.
[00:16:07] So lots of African countries are showing readiness to welcome innovation and that is at
[00:16:14] the core of what the fintech brings but then if we're looking at climate goals and making
[00:16:22] sure we can accelerate the growth I think unifying regulation means at the core so that's
[00:16:29] my number one ask.
[00:16:31] We still have we have improvements from individual regulators and individual countries and governments
[00:16:37] but the sooner we get to a point where we have regionalized regulation or at least continent
[00:16:46] wide regulation and regulatory approach to fintech licensing, fintech supervision across
[00:16:52] the continent it will accelerate the ability of fintech companies to actually grow innovator
[00:17:00] and contribute to our climate goals.
[00:17:03] And then secondly public and private partnerships and corporation is always instrumental in
[00:17:09] driving change and pushing for innovation and then so governments should look at how they
[00:17:16] can partner with fintechs to deliver climate focused solutions for their region for the
[00:17:24] continent as a whole just looking at how they can fund, how they can promote, how can
[00:17:28] they can champion these initiatives will be helpful.
[00:17:33] My big takeaway from our conversation today is that addressing exchange controls and
[00:17:38] simplifying cross border payments is essential for enhancing intra-African trade so with
[00:17:44] all that in mind what would you say the biggest challenges and also most importantly the
[00:17:49] opportunities in this area particularly in light of the work that you're doing and
[00:17:53] the mission that you're on here.
[00:17:55] I think but might have touched on this many times already, now conversation but I'll
[00:18:01] just say that I'll just repeat it again, it can only fuel the growth that is needed because
[00:18:09] what is missing is funding funding and if we can stimulate our own funding internally
[00:18:18] and not entirely depend on the developed world or depend on someone else outside of ourselves
[00:18:27] to help us we are going to make the changes we need to see quick or as quick as we would like
[00:18:35] but in particularly in light of what we are trying to do as on a freak you mentioned our mission
[00:18:41] our mission is very simple to make borders matter less and we believe that making our payments
[00:18:48] should be as easy as making our phone call. We don't think for a second when it pick up our mobile
[00:18:53] phone so put in a number that for some reason it's not going to go through your default position is
[00:19:00] you're going to get through and if you don't that is the anomaly because maybe somebody something
[00:19:05] is wrong somewhere or someone is not available but it's not that it can happen.
[00:19:10] In Africa the default position is that it's not easy we want to change the default position to
[00:19:16] it happens and the anomaly is that it made me doesn't and we want to have that in every
[00:19:23] single African country so we're right now in fish we are now in 40 we want to get to every
[00:19:28] every single African country and we want to be able to provide every single African access
[00:19:33] to digital financial services and for this to become a reality regulation needs to evolve regulators
[00:19:40] need to evolve we believe regulation and oversight and laws are good they are beneficial
[00:19:47] we encourage them and we regularly engage with our regulators on this but the ask is that they
[00:19:53] stop viewing exchange controls and regulation from a protectionist perspective but begin to look at
[00:19:59] it from an enabling perspective and look at how it can actually be a driver for growth
[00:20:05] and not just how it can protect they can protect their dollar reserves and that opportunity
[00:20:11] exists in digitizing payments and regulating from a growth. I just love how you're using technology
[00:20:17] leveraging technology to make borders less there and you've shared your grand vision but I'd
[00:20:24] love to hear more about what you think that will look like in the end they say we achieve everything
[00:20:30] that you're setting out to here what does that more climate resilient and economically integrated
[00:20:35] continent look like is anything you can share about that and on the work you're doing to make
[00:20:40] that happen I appreciate you you've told me many times here that what that grand vision is but
[00:20:45] I just want to help anyone listening around the world just to see that and what that will look like
[00:20:51] yeah I mean I think in my eyes what that looks like is just making this as simple as it is for
[00:21:02] anyone else elsewhere but if you if you haven't lived it you may not understand it but it might
[00:21:08] maybe want to take you back a couple of years before we had ATMs or before we had cards
[00:21:15] or before we had mobile phones and people were making calls from the landline and just think of
[00:21:20] that in a payment space and some people just not having a bank account and and for for us it's
[00:21:30] getting the continent to a place where we don't have people that can't have access to financial
[00:21:37] services and they can have them and if they don't have a bank account that's okay because they can
[00:21:43] they can do so from their mobile phones they can have mobile wallets they can make payments they
[00:21:50] can buy insurance they can pay for their school fees they can run a business from their phones
[00:21:57] from their cards from their PLS devices winter sale devices whatever it is that they have
[00:22:03] should be enough to give them the ability to be financially self-sufficient and we want to
[00:22:10] provide that financial payment infrastructure that makes it easier for everyone connected to our
[00:22:17] network whether it's companies governments development organizations to provide payment services to
[00:22:24] millions of Africans and facilitates the ease of moving funds whether it's for climate financing
[00:22:32] or just financing generally or for growing a business or funds for even climate relief however
[00:22:39] we can be that rail we want to be that rail so think of us like the swifto Africa but there's
[00:22:47] it provide payment services as easily as simply out possible and I think that's such a powerful
[00:22:53] moment to end on there'll be so many people listening around the world that take those things for
[00:22:57] granted having a bank account visiting an ATM managing their life and finances all from their
[00:23:04] smart phone incredible the work that you're doing here and I applaud you and honestly I would love
[00:23:10] to stay touch you don't keep you keep it up to speed with how things are evolving and get you back
[00:23:15] on later in the year or early next year and support you in any way I can but I cannot thank you enough
[00:23:20] for sharing your insights today but before I let you go I want you to leave everyone listening
[00:23:24] with one final gift and that is a book that has inspired you or made something to you but all
[00:23:30] you would recommend that we can add to our Amazon which list or I'm going to ask you what would you
[00:23:34] like to leave live with and why there is one book yeah and it's called the healer fraction world
[00:23:40] it's written by Jonathan Sachs and it's a book about reorienting your perspectives
[00:23:49] and helping you to be less preoccupied with itself getting out of your head and lean into
[00:23:56] the shared humanity that we all have and that we all understand that our purpose in life is to help
[00:24:03] others to bring solutions to solve problems and that is really what makes you truly human
[00:24:10] and that was a life changing book from your perspective changing book for me and I hope it
[00:24:17] helps others in in changing their perspectives or enhancing it in any way well I'll get that
[00:24:25] added straight to our Amazon wish list and we have only scratched the surface in the work that
[00:24:31] you're doing today so for anyone listening maybe they want to find out more information about you
[00:24:36] your work how they can help or just want to learn more or contact your team what is the best starting
[00:24:41] point for everything you can always reach out to me on LinkedIn I'm available on LinkedIn
[00:24:47] and we also check our website onafreek.com
[00:24:52] oh so well I like both links there to these show notes so people can find you in ice and easily
[00:24:57] and as we said we talked about everything from Omni Channel payment journey to open up Africa
[00:25:02] and and also how you're becoming the Swift of Africa and that grand vision that you've got
[00:25:06] even had time to live with that great book healing about healing a fractured world I'll get that
[00:25:11] added to our Amazon wish list and meanwhile I said I'd love to stay in touch with you and see how
[00:25:16] this evolves throughout the year but more than anything just thank you for your time and
[00:25:20] sharing this important story today thank you Neil it's been a pleasure being here with you as well
[00:25:26] wow what an incredible conversation now and I think that journey towards a resilient and
[00:25:32] economically integrated Africa is both challenging and filled with so many untapped opportunities
[00:25:39] and the insight shared today underscored the pivotal role of digital financial services
[00:25:44] government collaboration and innovative fintech solutions to navigate the complexities of
[00:25:50] intra-African trade climate resilience and financial inclusion they are three huge things
[00:25:57] that technology can tackle there and I think the vision set forth by today's guest is a real
[00:26:03] beacon of hope towards realizing an Africa where financial barriers are dismantled every individual
[00:26:09] has access to the tools needed to thrive in a digital economy and as I reflect on today's
[00:26:14] discussion I kind of out but wonder how can we further leverage technology and innovation to
[00:26:19] accelerate Africa's path towards economic prosperity and environmental sustainability
[00:26:26] and what role can each of us play in supporting this vision well I invite you to share your thoughts
[00:26:33] your ideas on how we can collectively contribute to shaping a bright future for Africa but it's time
[00:26:41] for me to sign off now but remember the dialogue doesn't end here email me tech blog right to out
[00:26:46] rook.com twitter linked in instagram just at nilscq's share your thoughts and join us in envisioning
[00:26:52] a connected resilient and thriving Africa or a big thank you for listening as always and
[00:26:59] hopefully you'll join me going tomorrow so until next time though don't be a stranger