Investors update: March 6 2023 - NGX, PAPSS partner

NGX, PAPSS partner to boost cross-border securities trading in Africa

Highlights

• The Nigerian Exchange (NGX) and Pan African Payments Settlement System (PAPSS) have signed a deal to integrate their payment systems in a bid to boost cross-border securities transactions across African capital markets.
• The integration of PAPSS into the cross-border capital market framework is expected to fix issues with currency convertibility, reduce costs, shorten processing and settlement times, and foster access to capital.
• With the latest development, investors should enjoy a more efficient and cost-effective way of investing in securities in other African markets.

Source: Nairametrics

Our Takeaway

Integrating payment systems across Africa’s stock exchanges offers significant benefits to the continent’s capital markets. Firstly, it can simplify the trading process by enabling investors to settle transactions seamlessly across multiple exchanges, increasing liquidity and trading volumes. This can also attract more foreign investment by reducing barriers to entry and providing greater transparency and confidence in the market. Furthermore, it can enhance regulatory oversight and monitoring of transactions, improving market integrity and reducing the risk of fraud. Ultimately, an integrated payment system can drive the growth of Africa’s capital markets.

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Visa provides funding to back African women entrepreneurs

Highlights

• Visa Foundation has provided a $1 million grant in partnership with two African organizations working on closing the funding gap for female entrepreneurs in Africa.
• The funding comes as part of Visa’s five-year, $200 million Equitable Access Initiative launched in April 2020, a strategic commitment to support gender-diverse and inclusive SMBs globally. 
• Visa will disburse the grants to AfriLabs and Graça Machel Trust, a women-founded and-led pan-African nonprofit.

Source: ABC

Our Takeaway

While Africa boasts of the highest growth rate of female-run businesses in the world, women only receive 1% of funding from VCs. Women business owners continue to face challenges that are unique to them—ranging from patriarchy, cultural norms, and unconscious bias that impacts women’s ability to access markets, finance, technology, and networks. The global pandemic further exacerbated these challenges as women-led SMBs were hardest hit. These underline the importance of setting up special financing vehicles specifically aimed at correcting the enduring gender gap in accessing finance for business growth.

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Artificial Intelligence could expand Africa’s economy by $1.5trn

Highlights

• Capturing only 10% of the fast-growing global Artificial Intelligence market could expand Africa’s economy by as much as $1.5 trillion by 2030—about 50% of its current gross domestic product (GDP).
• The African AI/Deep Tech sector is a cross-cutting industry segment that has experienced exponential growth in the last 5-10 years.
• South Africa, Nigeria, Egypt & Kenya are the dominant countries; they account for as much as 68% of the 2,400 Africa-based organizations that listed “artificial intelligence” as a specialty in a 2022 report.

Source: Daba AI in Africa report

Our Takeaway

Across Africa, a number of startups offer innovative AI-driven solutions and are increasingly attracting VC dollars to serve several industries, including financial services, logistics, healthcare, and consumer goods (FMCGs). Earlier this year, Germany’s BioNTech SE announced its acquisition of InstaDeep, a Tunis-born AI startup, for up to $680 million. Egypt-based Instabug and Synapse Analytics raised $46 million and $2 million respectively last year and with the InstaDeep acquisition, we anticipate even more investments in the fast-growing AI space going forward.