Investors update: Germany woos Africa as Europe wrestles with China for influence
3 min Read May 4, 2023 at 12:35 PM UTC
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Germany woos Africa as Europe wrestles with China for influence
Highlights
- German Chancellor Olaf Scholz is heading to Kenya and Ethiopia on Thursday as part of a European effort to make inroads with countries of the so-called Global South.
- The official will also push back against the influence of authoritarian nations such as Russia and China, Bloomberg reported.
- Berlin is convinced that Europe can make a better partner with Africa than can China, and Scholz will seek to advance talks on trade and cooperation agreements with the countries during his three-day trip.
Source: Bloomberg
Our Takeaway
Under Chinese President Xi Jinping’s Belt and Road Initiative, China has extended about $900 billion over the past decade in infrastructure and other projects around the world, including in Africa. With poorer borrowers struggling to manage their debt loads, however, Beijing has faced criticism over its role as the world’s largest government creditor to developing nations. If anything, the “scramble” for Africa shows that the region remains a major geopolitical player with an undeniably huge economic potential that can’t be ignored by the developed world and reflect an increasing realization that it will play an important role in the global economy over the next couple of decades.
Kenya launches QR code standard to facilitate digital payments
Highlights
- The Central Bank of Kenya (CBK) has launched the Kenya Quick Response Code Standard 2023, also shortened as KE-QR Code Standard 2023.
- The service seeks to boost digital payments, which are offered by multiple financial institutions in the country that usually have in-house payment solutions, meaning customers can only use a channel that has been implemented by a vendor.
- To this end, the CBK wants to eliminate that friction through this latest collaboration so merchants no longer need to install multiple pay bills or till number systems for their businesses.
Source: TechCabal
Our Takeaway
QR Codes are machine-readable codes consisting of an array of black and white squares containing information that provide an alternative option for initiating and accepting digital payments. The implementation of standardized QR Code-enabled payments should bring practical benefits to businesses and customers. And Kenya, arguably Africa’s most digitized financial market, now joins other emerging markets that have implemented the standardized approach to issuing QR codes for facilitating payments: including the Philippines, Jordan, South Africa, Singapore, Bahrain, Saudi Arabia, India, and China. Broadly, the future of financial services in Africa rests on interoperability across several players and services.
Flow Global raises funding to provide float to mobile money merchants
Highlights
- Flow Global, a Fintech company that provides capital solutions to merchants offering mobile money and agency banking services in Uganda and Rwanda, has raised bridge funding of an undisclosed amount.
- The startup provides merchants with customized digital loans with a reported 69% of those seeing an improvement in their revenue within the first month and growing by 40% over 6 months on average.
- The investment, from a DFI and a commercial Impact investment firm, sets Flow Global on a path to reach global profitability by mid-2023 as it continues to expand and scale rapidly within and across markets.
Source: ABC
Our Takeaway
Agency banking has grown by leaps and bounds in Africa, driven by a mix of fintech players and commercial banks. But for merchants to operate profitably, constant access to working capital is needed but most agents lack such and end up accruing 20–30% in expenses to rebalance and manage liquidity. Startups like Moni Africa (in Nigeria) and Flow aims to solve this through short-cycle working capital solutions: Flow’s current established markets (Uganda and Rwanda) are home to approximately 403,000 mobile money merchants servicing over 50 million users and the latter figure balloons to over 605 million in sub-Saharan Africa.
This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients. Daba is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.
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